CBO estimate now available (please stay on topic)

[bamsphd]

The Congressional Budget Office Cost Estimate (March 13, 2017) of the American Health Care Act is now available.

https://www.cbo.gov/sites/default/f...2018/costestimate/americanhealthcareact_0.pdf

Reminder: A generally useful and enjoyable "Nice Summary..." thread on the AHCA bill was recently closed. Instead of posting about what would happen because of the bill, the thread degenerated into arguments about the definition of compensation and the responsibilities of government. Please try to avoid that for as long as possible with this thread.

As the moderator's final post said:

We understand that the Affordable Care Act and the proposed American Health Care Act are important topics of discussion for early retirees. In future ACA and AHCA threads, please keep the discussion to aspects of the acts. Please refrain from personal opinions of individual rights and similar political statements.

Personally, I also find Horse Race (will it pass or not) comments less than useful.

 

[bamsphd]

I found the CBO's insurance premium projections especially interesting, emphasis mine.

From pages 21 and 22 of the CBO report.

The legislation would tend to increase average premiums in the nongroup market prior to
2020 and lower average premiums thereafter, relative to the outcomes under current law.
(This discussion is focused on premiums before any applicable tax credits and before any
surcharges for not maintaining continuous coverage.)

In 2018 and 2019, according to CBO and JCT’s estimates, average premiums for single
policyholders in the nongroup market would be 15 percent to 20 percent higher than under
current law mainly because of the elimination of the individual mandate penalties.

Starting in 2020, the increase in average premiums from repealing the individual mandate
penalties would be more than offset by the combination of three main factors. First, the mix
of people enrolled in coverage obtained in the nongroup market is anticipated to be
younger, on average, than the mix under current law. Second, premiums, on average, are
estimated to fall because of the elimination of actuarial value requirements, which would
result in plans that cover a lower share of health care costs, on average. Third, reinsurance
programs supported by the Patient and State Stability Fund are estimated to reduce
premiums. If those funds were devoted to other purposes, then premium reductions would
be smaller. By 2026, average premiums for single policyholders in the nongroup market
under the legislation would be roughly 10 percent lower than the estimates under current
law.

The changes in premiums would vary for people of different ages. The change in age-rating
rules, effective in 2019, would directly change the premiums faced by different age groups,
substantially reducing premiums for young adults and raising premiums for older people.
By 2026, CBO and JCT project, premiums in the nongroup market would be 20 percent to
25 percent lower for a 21-year-old and 8 percent to 10 percent lower for a 40-year-old—but
20 percent to 25 percent higher for a 64-year-old.

 

[bamsphd]

I don't find comparing plans easy now. CBO projects that comparing plans is going to become even more difficult once the actuarial value requirements (metal levels) are repealed. From page 15 of the CBO report.

Changes in the Ways the Nongroup Market Would Function. Under the legislation, some of
the ways that the nongroup market functions would change for consumers. The current
actuarial value requirements help people compare different insurance plans, because all
plans in a tier cover the same share of costs, on average. CBO and JCT expect that, under
the legislation, plans would be harder to compare, making shopping for a plan on the basis
of price more difficult.

 

[bamsphd]

From page 19 it looks like Medicare spending would increase by $43 billion.

Other Budgetary Effects of Health Insurance Coverage Provisions. Because the insurance coverage provisions of the legislation would increase the number of uninsured people and decrease the number of people with Medicaid coverage relative to the numbers under current law, CBO estimates that Medicare spending would increase by $43 billion over the 2018-2026 period.

 

[Hamlet]

The sticker shock is going to be dramatic for some older folks with modest incomes. The increase in the allowable age spread, the removal of any income adjustment for the subsidies, and the removal of any link to local prices is going to make for some extreme increases for millions of people.

The 64 year old guy from Alaska making 35k/year will not be buying insurance under this plan unless he is in serious medical trouble currently.

On the plus side, the CBO doesn't expect it to cause a general death spiral. Of course, that is a wash with the ACA, which they feel is generally stable as well.

 

[brewer12345]

Another hog calling contest, eh?

 

[samclem]

I don't find comparing plans easy now. CBO projects that comparing plans is going to become even more difficult once the actuarial value requirements (metal levels) are repealed. From page 15 of the CBO report.

Changes in the Ways the Nongroup Market Would Function. Under the legislation, some of
the ways that the nongroup market functions would change for consumers. The current
actuarial value requirements help people compare different insurance plans, because all
plans in a tier cover the same share of costs, on average. CBO and JCT expect that, under
the legislation, plans would be harder to compare, making shopping for a plan on the basis
of price more difficult.

Did you find the actuarial value ("metal levels") to be much use when shopping for a policy? I did not. I thought that even the crummy tool offered on the ACA marketplace site which allowed you to estimate how much care you'd likely use and then gave you anticipated cost was far better. It could be improved a lot (i.e. allow shoppers to put in a high and low number for each type of use, etc), and doing this would allow the shoppers on the ACHA individual market to get a good view of their likely costs under various policies. If people have this then the "metal levels" are not needed (IMO).

Soooo-EEEEEE!

 

[travelover]

Does the AHCA proposal allow for yearly / lifetime caps?

 

[jdmorton]

Unfortunately, the report is sparse on specific data which makes the estimates uncertain. There are significant assumptions made that may or may not turn out to be accurate.

The red font is mine.

Uncertainty Surrounding the Estimates

The ways in which federal agencies, states, insurers, employers, individuals, doctors, hospitals, and other affected parties would respond to the changes made by the legislation are all difficult to predict, so the estimates in this report are uncertain. But CBO and JCT have endeavored to develop estimates that are in the middle of the distribution of potential outcomes.

Macroeconomic Effects

Because of the magnitude of its budgetary effects, this legislation is “major legislation,” as defined in the rules of the House of Representatives.1 Hence, it triggers the requirement that the cost estimate, to the greatest extent practicable, include the budgetary impact of its macroeconomic effects. However, because of the very short time available to prepare this cost estimate, quantifying and incorporating those macroeconomic effects have not been practicable.

 

[jdmorton]

Another hog calling contest, eh?

Unfortunately it appears that way.

 

[samclem]

Does the AHCA proposal allow for yearly / lifetime caps?

Under the AHCA, no annual or lifetime caps are allowed.

I found this chart/snippet to be a helpful comparison of the major aspects of the ACA and AHCA.

 

[Pilot2013]

Reminder: A generally useful and enjoyable "Nice Summary..." thread on the AHCA bill was recently closed. Instead of posting about what would happen because of the bill, the thread degenerated into arguments about the definition of compensation and the responsibilities of government. Please try to avoid that for as long as possible with this thread.

Or at least stick to the "side" seemingly more prevalent on this site.

Don't worry, my last comment on this thread. Have fun with the bashing.

 

[imoldernu]

Re: CBO estimates....

https://www.cbo.gov/publication/51050

https://www.navytimes.com/articles/report-308-ship-navy-to-cost-566-billion

 

[Fedup]

I don't understand the stuff on post #4, I can't quote it because it doesn't show up. How can Medicare increase unless these uninsured people are at least 65. It doesn't make sense. Maybe I'm not reading it right.

 

[rodi]

Thanks for the interesting discussion.