22 million. That’s the headline takeaway and number that is being etched into the collective consciousness of Americans as the increased number of people who would be uninsured under the Better Care Reconciliation Act of 2017 (BRCA) relative to current law (i.e., the Affordable Care Act) in 2026, according to the Congressional Budget Office’s 49-page cost estimate of the BRCA released on June 26.
Obviously, hospitals should be rightly concerned about the 22 million, as it would likely lead to significant increases in uncompensated care.
However, the year is 2017, and 2026 is nine years away, and it is said that the devil is in the details, so let’s take a closer look at some of the assumptions the CBO made to generate its projection.
The 22 million figure is composed of: 1) 15 million people who are projected to be on Medicaid in 2026 under the ACA and who would not qualify for Medicaid under the BRCA; and 2) 7 million people projected to be participating in the individual insurance market in 2026 under the ACA who would not be able to afford or choose to not obtain coverage in the individual insurance market in 2026 under the BRCA. The CBO makes questionable assumptions about both of these components.
Future Medicaid Expansion Under the ACA
Not mentioned in the CBO’s summary, but buried deep in the actual score is an unsupported assertion that under the ACA “additional states will expand their Medicaid programs... [so] that, by 2026, roughly 80 percent of newly eligible people will reside in states that have done so” (p. 31). Five million of the aforementioned 15 million projected to be on Medicaid in 2026 because of the ACA’s Medicaid expansion are assumed to be in currently non-Medicaid expansion states. The CBO assumes that a majority of the 19 non-expansion states—at a bare minimum all 11 of the most populous of the 19 states—will reverse their longstanding opposition to the ACA’s Medicaid expansion and expand Medicaid sometime between now and 2026.
That is a highly dubious assumption, since 17 of the 19 non-expansion states have Republican governors, and likewise, 17 of these 19 states voted for Donald Trump over Hillary Clinton in the 2016 presidential election. The most populous state of the 19, Texas, Trump won by nine points, and four of the six most populous states Trump won by an average of over 12 points on a population-weighted basis. Unless the CBO knows something about the future that the governors and voters of those states don’t know, such as a massive shift in the governorships from Republican to Democrat in coming years, the 15 million estimate is overstated significantly.
The Stability of the ACA Health Insurance Marketplaces
The CBO’s estimate that 7 million people will be participating in the individual insurance market in 2026 under the ACA who would not be able to afford or choose to not obtain coverage in the individual insurance market in 2026 under the BRCA assumes that the ACA’s health insurance marketplaces will be stable.
However, this optimistic view is at odds with the Centers for Medicare and Medicaid Services’ June 13 release of its county by county analysis of current projected insurer participation in the marketplaces, which presented a “failing report card for the Exchanges,” stating that in 2018:
• As many as 1,200 counties—nearly 40 percent of counties nationwide—could have only one issuer.
• Roughly 2.4 million Exchange participants (20 percent) will have one issuer.
• 26 states will have at least one county with just one or no individual market insurance carrier.
The CBO score tries to minimize the problem of the marketplaces’ rapidly rising premiums—up an average of 105 percent from 2013 to 2017 for the 39 states operating thru healthcare.gov (20 times the growth in the Consumer Price Index during this period)—by pointing out that “most subsidized enrollees purchasing health insurance coverage in the nongroup [i.e., individual] market are largely insulated from increases in premiums because their out-of-pocket payments for premiums are based on a percentage of their income: the [federal] government pays the difference between that percentage and the premiums for a reference plan...” (pg. 6).
While largely shielding insured individuals from premium hikes, the increasing subsidies must ultimately be paid for by somebody (taxpayers), and they misleadingly mask the arguable unsustainability of many of the ACA health insurance marketplaces, as pointed out by several health insurance executives, including former Aetna CEO Ronald Williams and as indicated by the departures of 80 health plans from the marketplaces between 2016 and 2017.
To be clear, in contrast with the view of the CMS, the CBO sees the ACA health insurance marketplaces as generally stable, though it implicitly assumes a future contraction in the individual market population versus today and admits that the absence of any insurers in an exchange would be problematic! Bear in mind that CBO projections regarding marketplace participation have badly missed the mark—in March 2015, the CBO projected 2016 enrollment in the marketplaces of 24 million, and in January 2016, it slashed its projection to 13 million.
Conclusion
Predicting the future is a tough task, and predicting two alternative futures is even more challenging. In its score of the BCRA, the CBO has forecast a significant increase in the number of people who would be uninsured in 2026 relative to an optimistic future state under the ACA, but much of the CBO projection is based on some debatable, arguably flawed, assumptions.
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