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CBO report: Obamacare repeal would lead to 32 million more uninsured by 2026

And it would double insurance premiums in the individual market, a new report says.

NICHOLAS KAMM/AFP/Getty

Republicans have been getting more and more nervous about repealing Obamacare without having a replacement ready — and a new report from the Congressional Budget Office could worsen those fears.

The report estimates what would likely happen if the partial repeal bill Republicans passed in 2015, but which was vetoed by President Barack Obama, actually became law without any replacement.

Its findings aren’t pretty. CBO estimates that, compared to what’s already projected to happen under current law:

  • 18 million more people would become uninsured in the first full year after the bill’s enactment — rising to 32 million more people by 2026;
  • premiums in the individual insurance marketplaces would soar — they’d go up 20 to 25 percent above currently projected increases in the first full year after repeal, and “would about double by 2026”;
  • and access to coverage on the individual markets would plummet — about half of the US population would live in areas “that would have no insurer participating” in the individual market, CBO projects.

AshLee Strong, a spokesperson for Speaker Paul Ryan, said that the CBO report was “meaningless” because it didn’t score any replacement efforts or executive actions the new Trump administration could take. And House Ways and Means chair Kevin Brady released a statement saying that the GOP’s replacement efforts would “establish a robust health care marketplace based on innovation, competition, and choice.”

But the projections could add to pressure from both rank-and-file Republicans and President-elect Donald Trump that GOP leaders shouldn’t advance Obamacare repeal without having a fully fleshed out replacement ready — especially because, if the replacement is advanced separately, there’s no guarantee it would pass.

They’re also a reminder that when these detailed replacement plans do come out, CBO will be waiting to issue its projections on how they’d actually work — projections that have been taken very seriously in Washington.

Why CBO thinks the GOP repeal plan would be such a disaster

This CBO report scores a partial Obamacare repeal plan that was passed by Congress in 2015 (and quickly vetoed by President Obama). Importantly, it was not a full repeal of the law — it was specifically written so it could be passed via the Senate’s special budget reconciliation process with just 51 votes, rather than being blocked by a Democratic filibuster.

So since there are strict Senate rules about what sorts of provisions can be included in a budget reconciliation bill (basically, they have to affect federal spending or revenues), this plan couldn’t fully repeal Obamacare, and as written, it left many regulatory changes to health insurance markets — such as the ban on denying coverage for people with preexisting conditions — in place.

But the bill would effectively gut Obamacare by making two key changes. First, it would effectively repeal the individual mandate (which fines people who don’t get health insurance) and the employer mandate (which fines large employers who don’t offer coverage meeting various requirements to their employees). And second, it would eliminate spending on both the Medicaid expansion and on subsidies that help people purchase insurance on the individual marketplaces.

Without the mandates, CBO estimates, millions of people, particularly younger and healthier people, will drop coverage, and those who hold on to it will generally be older and sicker. Costs therefore would rise, and insurers would be more likely to pull out of various individual marketplaces (further limiting options).

Without the subsidies and Medicaid expansion, meanwhile, tens of millions more would drop coverage, likely because they can no longer afford it. Once again, this would lead to an older and sicker population holding on to insurance, driving up overall costs and incentivizing insurers to pull out of more marketplaces.

CBO will have a hugely important role this year

President-elect Donald Trump promised this weekend that his yet-to-be-unveiled health plan would provide “insurance for everybody,” even people who couldn’t afford it. Yet no major Republican plan we’ve seen so far comes close to meeting that promise. And if their plans do fall short, CBO will be there to point that out in a very high-profile way.

The Congressional Budget Office is of course not perfect, but it’s widely respected in Washington, DC, as a nonpartisan budget scorekeeper. Back in 2009, its scores threw Democrats’ plans for Obamacare into disarray, and the party crafted its revisions to its various bills specifically in hopes that they would result in better CBO scores.

Still, CBO has no actual institutional power to block anything. Its projections are taken seriously in large part because moderates in both parties have generally taken them seriously. It would theoretically be possible for Republicans to simply ignore CBO, and offer their own alternative projections that would be rosier.

But many Republicans in Congress do seem to be growing more concerned about the practical consequences of repeal, as Sarah Kliff wrote recently. Depriving people of health insurance coverage isn’t popular. GOP senators with second thoughts about what repeal might mean could well latch on to CBO scores to decide just what they’re comfortable supporting.


Watch: Repealing Obamacare could change millions of lives

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