Summary of the Congressional Budget Office Analysis of the House Republican Bill

Summary of the Congressional Budget Office Analysis of the House Republican Bill


The Congressional Budget Office made several key findings in their analysis of the Republican “repeal and replace” legislation today: 1) the numbers of uninsured Americans will increase by 24 million by 2026-- i.e. that many people will lose coverage due to the House Republican plan, 2) the deficit will be reduced by $337 billion by 2026, 3) private individual insurance premiums would rise by 15-20% over the next two years then fall by 10% by 2026.

The biggest losers will be older, rural and lower income individuals purchasing on the Exchanges and Medicaid patients. The average 64 year old with an income of $26,500 (175% of FPL) would lose $8700 in refundable tax credits towards the cost of their coverage; a forty year old with the same income would lose about $1200 and a twenty one year old would lose $1,000. The losses occur for two reasons: 1) the House Republican measure changes the tax credits to a flat rate from an income adjusted rate, and 2) they increase the age rate band on premiums from 3/1 to 5/1.

Medicaid beneficiaries would lose $880 billion in coverage and individuals using the refundable tax credits in the Exchanges would lose $673 billion. Medicaid takes a double whammy: 1) a per capita cap so that federal Medicaid spending cannot increase more than the medical CPI, and 2) a reduction in the federal matching rate for the new eligibility categories (in California, this means a reduction from a 90/10 match to a 50/50 match). People with Exchange subsidies take a double whammy as well: 1) large reductions in the refundable tax credits for premium assistance and 2) elimination of the federal tax credits for cost sharing (i.e. copays and deductibles).

The biggest gainers will be very high-income individuals who otherwise pay a Medicare surcharge on their unearned income; their taxes would be cut by $275 billion.

Individuals with incomes of $68,200 (450% of FPL) buying private individual coverage would now qualify for refundable tax credits towards the costs of their coverage: $2450 for the twenty one year old, $3650 for the 40 year old and $4900 for the 64 year old. These gains occur because the Republican proposal would provide a flat rate refundable tax credit (2/1 age rate adjustment) to individuals with incomes up to 600% of FPL then phasing down and out in 10% increments. This is an improvement for the higher income in the individual market while causing financial havoc for the lower and moderate income Americans. Net cost is $361 billion.

The initial responses of the Trump Administration and the House Republican leadership has been denial.

Prepared by: Lucien Wulsin


Dated: 3/13/17


More Detailed Summary of the CBO Analysis of the House Republican’s Repeal and Replace Proposal

House Republicans Repeal and Replace Proposal