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White House may tweak health bill after damning report that repealing Obamacare would leave millions uninsured

Members of the House Energy and Commerce Committee begin work on the proposed American Health Care Act, on Capitol Hill on March 8. Photograph: (AFP)

Reuters Washington, DC, United States Mar 14, 2017, 08.26 PM (IST)

A nonpartisan Congressional research report which states that 14 million Americans would lose medical insurance by next year under a Republican plan to dismantle Obamacare has forced President Donald Trump and Republicans to reconsider whether they could modify the plan.

Press Secretary Sean Spicer said that White House officials and leaders in the Republican-controlled US House of Representatives were considering whether they could tweak the plan, which has Trump's own party divided.

Republican senators held a lunch on Capitol Hill with Vice President Mike Pence and Health and Human Services Secretary Tom Price to discuss possible changes, Reuters reported.

Senate Majority Leader Mitch McConnell said the bill could be amended in the Republican-controlled Senate.

“The first step is in the House. We're hopeful and optimistic they're going to send us over something. It will be open for amendment,” he said.

The US Congressional Budget Office (CBO) forecast on Monday that 14 million Americans would lose health insurance by 2018 and 24 million more people would be uninsured in 2026 if the legislation to replace Obamacare were to go through.

It added that 52 million people would be uninsured by 2026 if the bill became a law, compared with 28 million who would not have coverage that year if the law remained unchanged.

The CBO, however, said that budget deficit would be reduced by $337 billion between 2017 and 2026 if the plan to replace the 2010 Affordable Care Act was adopted.

Obamacare, as President Barack Obama's signature piece of domestic policy is commonly called, expanded insurance to about 20 million Americans. 

Republicans' plan to replace Obamacare would repeal a requirement that every American have health insurance and will slash spending on the Medicaid program for the poor and disabled. It will also replace Obamacare's income-based subsidies with fixed tax credits for the purchase of private insurance.

The bill will revamp the tax subsidies that help people buy insurance if they do not get it from work. The amounts would be based on age, not income.

The new health bill is currently being considered by the House of Representatives. Two House of Representatives committees have approved the legislation to dismantle Obamacare that was unveiled by Republican leaders a week ago, but it faces opposition from not only Democrats but also medical providers including doctors and hospitals and many conservatives. 

Hours after the CBO report was released, the House Budget Committee postponed its consideration of the Republican bill to Thursday from Wednesday. 

Prior to the report, Republicans had been planning to vote soon on the bill in the House, where it is likely to pass, and send it to the Senate, where its outlook is uncertain. 

Details of the Congressional Research report

The CBO estimated that insurance premiums would rise 15 per cent to 20 per cent in both 2018 and 2019 because fewer healthy people would sign up after the repeal of the Obamacare penalty for declining to obtain insurance. But it said the hikes would be offset after 2020 by a $100 billion fund allocated to states in the bill and deregulation in the insurance market. 

By 2026, average premiums for single policyholders in the nongroup market under the legislation would be roughly 10 per cent lower than the estimates under current law, in part because insurers will be able to offer plans that cover a lower share of healthcare costs.

While the federal government would lose revenues through the repeal of Obamacare’s individual and employer mandates’ tax penalties, CBO said the loss would be surpassed by savings on insurance subsidies and Medicaid payments that Washington would no longer have to provide for people who lost coverage. 

At the same time, CBO said the repeal of the individual mandate’s tax penalties would mean higher health insurance premiums for those who retained coverage, because insurers would still have to cover any applicant without being free to raise premiums for older, sicker people, despite lower numbers of younger, healthier customers who are cheaper to insure.

The nonpartisan Tax Policy Center on Monday said the Republican plan would benefit the wealthiest US households far more than middle-income families. A family making $51,600 to $89,400 a year, including fringe benefits like employer-provided health insurance, would get a tax cut averaging $300. The top 0.1 percent of earners with incomes of at least $3.9 million would get a tax cut of about $207,000, the study said.

Implications of the report for Trump

The CBO report's findings could make the Republican plan a harder sell for lawmakers, particularly in the US Senate.

Democratic leaders in Congress said the bill could result in elderly people being kicked out of nursing homes as it simultaneously gives tax cuts for the richest Americans.

"How can they look their constituents in the eye when they say 24 million of you no longer have coverage and those of you who do have it, will have less coverage at more cost to you," House Democratic leader Nancy Pelosi said.

Doctors groups and patient advocates have for long been saying that the bill must be abandoned.

Democrats say the Republican plan would hurt the elderly, the poor and working families but give tax cuts to the rich. 

Trump's own party has been divided. Moderates, particularly in the Senate, worry about causing people to lose coverage, while conservatives do not think the bill goes far enough in undoing Obamacare.

Some Republicans worry a misfire on the Republican healthcare legislation could hobble Trump's presidency and set the stage for losses for the party in the 2018 congressional elections. 

Trump administration defends healthcare plan

While Trump himself made no comment on the report, his administration defended the healthcare plan, which they say will have a second and third phase that will entice consumers. Health and Human Services Secretary Tom Price said at the White House that Trump's plan would cover more individuals at a lower cost and it was "virtually impossible" to envision that 14 million people would lose insurance coverage by next year.

House of Representatives Speaker Paul Ryan, a key backer of the plan called the American Health Care Act, said the CBO estimates showed it would ultimately lower premiums.
 
"Our plan is not about forcing people to buy expensive, one-size-fits-all coverage. It is about giving people more choices and better access to a plan they want and can afford. When people have more choices, costs go down," Ryan said.

Shares fall

Shares of hospitals and health insurers slipped, partly on worries the plan would mean fewer insured patients.

(WION with inputs from Reuters)

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