PBPC on CBO Score for GOP Healthcare Plan

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Marc Stier, Director of the Pennsylvania Budget and Policy Center, made the following statement following the release of the Congressional Budget Office (CBO) scoring for the "American Health Care Act," the GOP House healthcare proposal:

The Congressional Budget Office released its evaluation of the Republican replacement for the Affordable Act (ACA), the American Health Care Act (AHCA) today and, not surprisingly, the news is grim for the nation, and by extrapolation, for Pennsylvania.

The most disturbing information in the new report is the prediction that 24 million Americans will lose health insurance by 2026. That high number reinforces our tentative estimate that at least 1.1 million Pennsylvanians, and probably more, will lose health care coverage when the AHCA goes fully into effect. It also lends support to our view that 4,000 Pennsylvanians will die prematurely because a lack of insurance will make it impossible for them to get the health care they need.

The CBO report does predict that health insurance premiums in the individual market will grow more slowly under the AHCA than currently projected. Yet, the reason for that slower growth is troubling: The repeal of the actual value requirements of the ACA will mean that health insurance typically covers less of the cost of health care, leading to higher out of pocket costs. And while the CBO predicts that premiums will be 20% lower for a 20 year old, and 8-10% percent lower for a 40-year old, they will be 20-25% higher for a 60 year old. This is bad news for Pennsylvanians, in part because, as we pointed out last week, the tax credits for purchasing health insurance on the exchanges in the AHCA are far less generous than those in the ACA and do not grow with the cost of health insurance. We now estimate that the average person receiving tax credit in Pennsylvania will see their credit reduced by 43% or $2,188. The tax credit reduction will be far higher for people who are older—precisely the group whose premiums will increase as a result of the AHCA. For example:

  • In Philadelphia, a 60 year old with an income of $40,000 will see a decline in their tax credit from $8,470 to $4,000.
  • In Centre County, a 60 year old with an income of $40,000 will see their tax credit decline form $10,700 to $4,000.

Finally, the CBO predicts that, once the incentives in the ACA for businesses to insure their employers are eliminated, seven million people who now get employer-based insurance in the country will lose it. This will be especially problematic in Pennsylvania, which has the 9th highest rate of employer-based insurance of all 50 states. Our rough estimate is that 300,000 people will lose employer based insurance in our state.

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