(UPDATE: DEAD BILL WALKING) CBO releases projections for Alexander-Collins ACA stabilization bill

Hat Tip To: 
Gordon I. Herz

Feast your eyes on the fallout...

The Bipartisan Health Care Stabilization Act of 2018 (BHCSA) would make several changes to health care laws. It would:

  • Change the state innovation waiver process established by the Affordable Care Act (ACA),
  • Appropriate a total of $30.5 billion for reinsurance programs or invisible high-risk pools in the nongroup insurance market,
  • Appropriate funds for the direct payment for cost-sharing reductions (CSRs) through 2021,
  • Allow any enrollee in the nongroup market to purchase a catastrophic plan, and
  • Require some existing funding for operations in the health insurance marketplaces to be used specifically for outreach and enrollment activities in 2019 and 2020.

On net, CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting the legislation would increase the deficit by $19.1 billion over the 2018-2027 period relative to CBO’s baseline. The agencies estimate that the legislation would increase the number of people with health insurance coverage, on net, by fewer than 500,000 people in each year from 2019 through 2022, compared with the baseline projection. Because enacting the legislation would affect direct spending and revenues, pay-as-you-go procedures apply.

CBO and JCT estimate that enacting the legislation would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2028.

The BHCSA would impose intergovernmental and private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). CBO estimates that the costs of those mandates would fall below the annual thresholds established in UMRA for intergovernmental and private-sector mandates ($78 million and $156 million in 2017, respectively, adjusted annually for inflation).

Here's the direct link to the CBO report itself.

Unfortunately I don't have time to do a proper write-up/analysis until later tonight, but I'm sure every other healthcare wonk in the country will have a blast...

UPDATE 11:15pm: Welp. First of all, it turns out the main report was only half the story...the CBO also issued a supplementary letter which took the limited upside of the main report and stomped on it like a bug:

On March 19, 2018, the Congressional Budget Office and the staff of the Joint Committee on Taxation (JCT) produced a cost estimate for the Bipartisan Health Care Stabilization Act of 2018 (BHCSA). The agencies estimated that enacting the BHCSA would increase the deficit by $19 billion over the 2018-2027 period relative to CBO’s baseline, primarily because of the cost of subsidizing reinsurance or invisible high-risk pool programs in the nongroup health insurance market. The reduction in premiums associated with those programs would primarily benefit people with income greater than 400 percent of the federal poverty level (FPL).1 This letter responds to your request for additional information about that estimate.

You requested an alternative estimate of section 602(b) of the bill, which would appropriate such sums as may be necessary for payments for cost sharing reductions (CSRs) authorized by section 1402 of the AffordableCare Act (ACA). Specifically, you asked that CBO and JCT provide an alternative estimate that reflects the fact that insurers are not being separately reimbursed through an appropriation for the costs of CSRs….

CBO and JCT estimate that appropriating CSR payments for 2019 through 2021 would, on net, reduce the deficit by $32 billion over the 2019-2027 period relative to the alternative benchmark. In addition, CBO and JCT project that the number of uninsured people would increase by less than 500,000 in 2019 and by between 500,000 and 1 million in 2020 and 2021. Most of those uninsured people would have incomes between 200 percent and 400 percent of the FPL…

Just as Dave Anderson did the heavy lifting for me this morning, Aviva Aron-Dine from the Center for Budget Policy Priorities (CBPP) broke out the CBO's double-header analysis this evening...and it's pretty much exactly what I (and other healthcare wonks) have been saying for almost a year now:

  • First, CBO finds the legislation would result in net coverage losses, w/larger losses for moderate-income consumers than gains for middle-/upper-income consumers.
  • Assessing the package relative to a baseline where CSRs are paid – so looking at the effects of reinsurance & other provisions, CBO finds coverage gains < 500k.
  • Comparing restoring CSR payments to the status quo, CBO finds coverage losses of 500k-1 million.

Yup...if CSRs had never been cut off, there might be a net gain of perhaps half a million enrollees (not terribly impressive anyway)...but that's not the world we live in. We live in a world where CSRs have been cut off...and in that scenario, restoring them would cause a net loss of between half a million and a million enrollees.

  • Second, CBO confirms that the federal savings from restoring CSRs come from coverage losses, higher premiums, & higher out-of-pocket costs for people w/incomes below 400% of the poverty line.
  • Restoring CSRs results in worse coverage options for consumers with incomes between 200 and 400% of the poverty line.
  • Higher costs lead some of these consumers to drop coverage, accounting for the majority of the savings.
  • The rest of the savings from restoring CSRs come from people who keep their coverage paying more.

Yup. The Silver Load/Silver Switcharoo would be reversed, so everyone who saw their tax credits shoot up this year would see them drop back off again next year.

  • Third, the savings from higher costs, reduced coverage from restoring CSRs exceed the total premium reductions that would result from the bill’s reinsurance funding.
  • The federal savings from restoring CSR payments equal $29B.
  • Net federal spending on reinsurance would equal $19.6B. (That’s less than the $30B up front $ mostly because CBO expects states won’t take full advantage of the money.)
  • Premium savings for consumers would be < $19.6b, because the reinsurance $ wouldn’t be fully passed through to consumers by insurers.

Yes, it's easy to "save" money when you don't actually spend the money you're supposed to be spending.

  • Fourth, many people would see higher costs or no benefits from the proposal.
  • Restoring CSRs raises premiums/out-of-pocket costs for many people with incomes between 200-400 percent FPL, who won’t benefit from reinsurance.
  • 40% of consumers in 2020 (and 20% in 2021) will live in states without federally-funded reinsurance programs, so even many unsubsidized consumers won’t benefit.

Gee, I wonder which states those would be?

  • Finally, here are a few of the claims from the sponsors’ press release (http://bit.ly/2FVF1bs ) that are refuted by CBO.
  • Press release repeats Oliver Wyman estimate that premiums would fall 40%. CBO finds 10% reduction in 2019, 20% in 2020-2021 in states with reinsurance programs, 0% in states without.

Yup. And remember, as I've noted before, even that pie-in-the-sky "40% lower" wouldn't be 40% less than premiums are today, it's 40% lower than they would otherwise be in 2019-2021, which is really more like 27%, 17% and 5% lower respectively.

  • Restoring CSRs would add to sticker price premium reductions, but will largely increase rather than reduce costs for consumers.)
  • Press release repeats Oliver Wyman estimate that package would increase coverage by 3.2 million. CBO finds package would reduce coverage on net.
  • Press release implies all unsubsidized consumers will benefit. CBO finds many unsubsidized consumers will live in states without reinsurance programs in 2020-2021; this group mostly won’t benefit.
  • Finally, press release asserts package will benefit consumers below 250% of the poverty line by restoring CSRs. CBO makes clear these consumers are still getting cost sharing assistance; some will see higher costs w/CSRs restored.

Then again, all of this fuss and bother may be for nothing anyway, because...

Obamacare stability payments are NOT in House omnibus lawmakers say. Senate could try to add but not looking good for the effort

— Peter Sullivan (@PeterSullivan4) March 19, 2018

Yup, as Peter Sullivan of The Hill reports:

ObamaCare payments aimed at lowering premiums will not be included in the House’s government funding bill, in a significant defeat for backers of the effort.

Multiple GOP lawmakers leaving a conference meeting held Monday evening to discuss the ominibus funding bill said the payments are not being included, in large part because of a dispute with Democrats over abortion restrictions known as the Hyde Amendment.

Republicans need Democratic votes to pass the funding bill, so with firm Democratic opposition to the abortion restriction on the ObamaCare funds, the provisions were dropped.

Yeah, that's not gonna happen, guys.

It was Republicans who filed the lawsuit over CSR reimbursement payments instead of appropriating them 4 years ago in the first place.

It was a Republican, Donald Trump, who made the decision to cut off CSR reimbursement payments last fall in a deliberate attempt to (his words) "blow up the exchanges".

It was Republicans who decided to repeal the Individual Mandate starting with the 2019 Open Enrollment Period.

It was a Republican who decided to slash the marketing budget by 90% and the outreach budget by 40%.

And it was Republicans who insisted on adding the #ShortAssPlan expansion and abortion coverage elimination language to the bill.

In short: The ball is in your court now, guys. You're breaking it, you own it this November.