The Congressional Budget Office (CBO) analysis of the American Health Care Act (AHCA) estimates that relative to current law the House Republican health care plan will decrease spending by $1,219.1 billion and decrease revenue by $882.8 billion, leading to a total deficit reduction of $336.5 over the 10-year budget window from 2017 to 2026.
While it is important to consider the projected loss of health insurance for 24 million people, this post will look at the numerous fiscal risks of the legislation.
The biggest of these risks is also the AHCA’s biggest omission: the absence of any provisions to control overall health care costs, and not just federal payments for those costs.
Although the AHCA reduces federal spending on health care, it doesn’t necessarily reduce the “cost curve” of long-term health care inflation. Ultimately that is a problem because if health care inflation isn’t controlled, long-term health care spending growth will continue to drive up the cost of Medicare, make the Medicaid savings assumed in the legislation more difficult to achieve, and decrease the relative value of the tax credits meant to help people find affordable health care insurance in the non-group market.
The AHCA potentially makes long-term cost...