The report was sharply critical of the idea that sicker patients could be protected in a system that allowed insurers to charge them higher premiums. In the minority of states it predicted would pursue broad waivers of Obamacare’s insurance regulations, the office said that sick customers would face far higher prices and many would be priced out of the market altogether.
“Over time, less healthy individuals (including those with pre-existing or newly acquired medical conditions) would be unable to purchase comprehensive coverage with premiums close to those under current law and might not be able to purchase coverage at all,” the report said.
Republicans have argued that the bill’s waivers would not hurt insurance access for people with pre-existing health conditions, thanks to state funding devoted to high-risk pools subsidizing their coverage. The C.B.O. essentially dismissed that idea, saying that the state funds would not be enough to protect sick customers from huge bills.
Premiums for healthier customers would go down in those states, though some people might end up buying plans so flimsy that the budget office said they didn’t count as insurance. A second set of states that pursued more limited waivers of insurance rules could enjoy premiums some 20 percent lower than expected under the Affordable Care Act in exchange for more limited benefits, it said.
Republicans have argued that letting states waive the insurance rules would lead to a more robust and attractive insurance market. The C.B.O. disagreed with that argument, too. It said that markets in the states with waivers would become smaller than under an earlier version of the bill that did not include the waivers. In response, more employers would offer workers coverage, it said, since they would see individual coverage as an unattractive alternative.
Over all, the budget office found that the law would mean 23 million more people would lack insurance than under current law, a slight decrease from its assessment of an earlier draft that did not include the waivers. But it noted that the group without insurance would not be precisely the same as it would under the earlier bill. The uninsured would be more likely to be the kind of patients who rely on health insurance most.
The Medicaid changes make up the bulk of the coverage reductions in the estimate. The bill reduces funding for a new group of poor adults who were covered by most states under the Affordable Care Act, but it also reduces funding to states for children, disabled adults, poor elderly Americans and parents of young children, who have long been covered by Medicaid as well.
For those who buy their own insurance, the bill’s changes to government subsidies would mean huge price increases for many older people, particularly those with low incomes living in expensive markets.
The budget office’s hardest task was estimating how many states would waive their insurance rules and in what ways. Such judgments take guesswork about the choices state officials will make, and they almost certainly involve some degree of error. So it’s reasonable to see its one-sixth estimate as fuzzy. But the budget office, which consults with state governments in preparing its estimates, was certain that at least some states would pursue such waivers. And in the states that did, the market would become inhospitable to the sick.
Senate leaders, aware of the criticism already leveled at the House bill, say they are writing their own bill. This analysis is likely to offer guidance in where they will and won’t want to go.