By the numbers: Senate health care proposal

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The proposed plan would leave more people without insurance.
The proposed plan would leave more people without insurance.
What will happen if the U.S. Senate approves the Better Care Reconciliation Act of 2017?

     President Donald Trump has touted the proposal aimed at replacing the Affordable Care Act, which became law under President Barack Obama.
      The new plan would reduce federal spending by $321 billion, but by 2026 the number of Americans uninsured would increase by 22 million, according to the Congressional Budget Office, which on Monday released an estimate of the direct spending and revenue effects of the bill. With the Senate divided over the proposal, CNN reports that Senate Majority Leader Mitch McConnell has announced he will delay a vote on the bill until after the July 4 recess. 
     Here is the rundown:

The bill will increase the number of Americans without insurance: There will be an additional 22 million uninsured Americans by 2026 if the legislation is enacted. By that time, “an estimated 49 million people would be uninsured, compared with 28 million who would lack insurance that year under current law (Obamacare),” the report says.
     It would be as though the residents of both Virginia and California lost health insurance.

It will reduce direct spending -- but provide a tax cut on investment income: The legislation “would reduce direct spending by $1,022 billion and reduce revenues by $701 billion, for a net reduction of $321 billion in the deficit over that period,” the report says.
     “The largest savings would come from reductions in outlays for Medicaid—spending on the program would decline in 2026 by 26 percent in comparison with what CBO (Congressional Budget Office) projects under current law,” the report said.
     But the largest increases in the deficit ($541 billion) "would come from repealing or modifying tax provisions in the ACA (Obamacare) that are not directly related to health insurance coverage, including repealing a surtax on net investment income and repealing annual fees imposed on health insurers." 

Premiums: The legislation “would increase average premiums in the non-group market prior to 2020 and lower average premiums thereafter,” the report predicts. It makes reference to "benchmark" plans, which refers either to the second lowest-costing plan under Obamacare or a plan which provides specific essential health benefits, such as hospitalization or emergency services.
     “Under the Senate bill, average premiums for benchmark plans for single individuals would be about 20 percent higher in 2018 than under current law, mainly because the penalty for not having insurance would be eliminated, inducing fewer comparatively healthy people to sign up. Those premiums would be about 10 percent higher than under current law in 2019—less than in 2018 in part because funding provided by the bill to reduce premiums would affect pricing and because changes in the limits on how premiums can vary by age would result in a larger number of younger people paying lower premiums to purchase policies.”
      The report says that in 2020, "average premiums for benchmark plans for single individuals would be about 30 percent lower than under current law. A combination of factors would lead to that decrease—most important, the smaller share of benefits paid for by the benchmark plans and federal funds provided to directly reduce premiums.”
      But under the new legislation, starting in 2020, the premium for a plan with benchmark coverage would "typically be a relatively high percentage of income for low-income people. ... As a result, despite being eligible for premium tax credits, few low-income people would purchase any plan.”

More out-of-pocket spending: The report sums up: “Some people enrolled in non-group insurance would experience substantial increases in what they would spend on health care even though benchmark premiums would decline, on average, in 2020 and later years. Because non-group insurance would pay for a smaller average share of benefits under this legislation, most people purchasing it would have higher out-of-pocket spending on health care than under current law."
      Those who used essential health benefit plans would see “substantial increases in supplemental premiums or out-of-pocket spending on health care, or would choose to forgo the services. Moreover, the ACA’s (Obamacare) ban on annual and lifetime limits on covered benefits would no longer apply to health benefits not defined as essential in a state.”
      That means some benefits could be removed from the state’s definition of an essential health benefit. “Some enrollees could see large increases in out-of-pocket spending because annual or lifetime limits would be allowed.”

 

     Related:

     How affordable is Obamacare?

     The new health care proposal's impact

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