CBO: ACA repeal without replacement will send premiums, uninsured rates soaring

If the Affordable Care Act (ACA) is repealed without being replaced, 18 million people would lose health insurance and non-group market premiums would increase by as much 25 percent in the first year, according to a Congressional Budget Office (CBO) analysis.

The CBO, a “strictly nonpartisan agency” that provides reports on budgetary and economic impacts of legislation to Congress, based this analysis on a 2015 bill that repealed much of the ACA through the process called budget reconciliation. That attempt was expected from the start to be vetoed by President Barack Obama. Since the new Congress was sworn in, Republican majorities in both houses have passed a resolution allowing the same process to be used to eliminate much of the law.

If that occurs, the CBO projects 18 million people would lose their health insurance a year after repeal, with the number increasing to 27 million if the Medicaid expansion is rolled back and subsidies for buying insurance are eliminated. By 2026, the report projects 32 million people will have lost their coverage.

“Most of those reductions in coverage would stem from repealing the penalties associated with the individual mandate,” the report said, adding that insurers in some areas would “leave the non-group market in the first new plan year following enactment. They would be leaving in anticipation of further reductions in enrollment and higher average health care costs among enrollees who remained after the subsidies for insurance purchased through the marketplaces were eliminated. As a consequence, roughly 10 percent of the population would be living in an area that had no insurer participating in the non-group market.”

Regarding premiums, the CBO report predicts they would double by 2026 as younger and healthier customers leave insurance risk pools and competition is decreased by the exit of insurers in many areas. Similar results were seen in states where regulations imposed minimum coverage standards without offering subsidies or requiring individuals to have health coverage.

The resulting risk pool would lead to a mass exodus of insurers, the CBO said, leaving more than half the U.S. population in areas with zero insurers participating in the individual market.

The analysis said the effects of repeal on hospitals and health systems are “difficult to predict.” A study from the Urban Institute analyzing the same 2015 legislation said the result would be a $1.1 trillion increase in uncompensated care costs.

CBO’s projections assume there won’t be any replacement for the ACA once it’s repealed. While Republicans in Congress have not put forward a comprehensive plan, President-elect Donald Trump has promised one is coming soon. For that reason, congressional Republicans argue the CBO report is “meaningless,” because neither they nor Trump are advocating repeal without a replacement.

"After years of devastating news about the consequences of Obamacare, I can see why Democrats would want to change the subject,” David Popp, a spokesman for Senate Majority Leader Mitch McConnell, said in a statement. “But Democrats face a choice now: Do they agree with their leader and refuse to work together on any reforms at all? Or do they agree with us that doing nothing is not an option and work with us on a series of step-by-step reforms to prevent the scenario envisioned by the CBO report?"