Column: Government actuaries say you’ll pay a whole lot more for health insurance if the GOP repeals Obamacare

Here are some findings about Obamacare repeal that congressional Republicans and Health and Human Services Secretary Tom Price will have trouble explaining away: Under the GOP’s Affordable Care Act repeal bill, individuals will be paying an average 27% more for their insurance by 2026 than under current law. That’s $162 per month more, on average.

Stunningly, cost-sharing — that is, co-pays and deductibles — would rise by an average 61% compared to current law. Gross premiums would be lower than under the current law, in part because insurance would offer fewer benefits, but net premiums — after subsidies — would be higher.

The new estimate was released Tuesday by the chief actuary of the Centers for Medicare and Medicaid Services. The CMS is nominally under Price’s jurisdiction, but he may not have been paying attention to their work on the estimated financial effect of the American Health Care Act, the House Republican repeal bill. The results give the lie to Price’s assertion just one day ago that repeal will relieve Americans of rising insurance premiums.

The results also come as Senate Republicans are trying to cobble together their own version of the repeal bill passed by the House in early May. The Senate effort is being conducted behind closed doors by a small cadre of Republicans — so secretive that not even other Republican senators, much less members of the general public, have seen their work.

For all the pain of higher individual costs, the report finds that the repeal measure would have a negligible effect on overall healthcare spending in the U.S. — a reduction of a mere $258 billion, or 0.2% of gross domestic product, over 10 years. U.S. GDP is currently about $18 trillion.

The new report can be read as a supplement and complement to analyses of the repeal measure by the Congressional Budget Office. The CBO projected that the repeal bill would drive about 23 million Americans out of the insurance market by 2026. The CMS actuaries project that there will be about 13 million more uninsureds by that point.

The reason for the discrepancy isn’t entirely clear, though the actuaries project that the repeal will drive 8 million Americans off Medicaid, and the CBO says the loss would be 14 million, or 17% of enrollment. The Republican bill eviscerates Medicaid by repealing the Affordable Care Act’s Medicaid expansion after 2020, and cutting more than $830 billion out of the program’s spending over 10 years.

The actuaries focus more than the CBO on dollar costs at the household level. Their findings are shocking. They project that households would face nearly $221 billion more in medical expenses in 2017-2026 under the repeal bill, largely because subsidies would be skimpier and some states would take advantage of the repeal measure’s provisions allowing them to waive “community rating,” which mandates that premiums be the same for everyone regardless of medical condition.

The total burden on households would be lower — only $21 billion — but that’s mostly because the repeal measure eliminates a Medicare tax paid now by high-income taxpayers, as well as a tax on health insurance premiums scheduled to go into effect next year. In other words, a good portion of the netting out goes only to high-income households. Everyone else pays more.

Costs would also rise for state and local governments, which would be saddled with an increase of $253 billion, or 1.9%, in comparison to existing law. Obviously, this would translate into a cost for taxpaying households, too.

Medicare would do poorly, with its deficit increased and its trust fund depleted in 2026, two years earlier than under current law. That’s mostly because of repeal of the Medicare tax.

The actuaries point out that the effect of repeal would vary widely by age. Put simply, older Americans would be stomped. That’s because the repeal measure changes the premium differential from the ACA’s three-to-one (older insurance buyers can be charged no more than three times the premium of younger buyers) to five-to-one, while changing the ACA’s premium subsidies from one based on income to one based on age. But the subsidy differential would only be two-to-one, so older buyers would get much less assistance than their younger cohorts.

As a result, the actuaries estimate that by 2026, enrollments in the 18-29 age range would be 10% higher than under current law, but for those 50-59 enrollments would plummet by more than 12% and for those over 60 they’d be lower by 16%. That foretells a major public health crisis, because older Americans tend to be sicker and need more medical services.

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