The New Score of the AHCA

Policy Memo
Thursday, May 25, 2017

The Congressional Budget Office (CBO) has released its cost estimate for the American Health Care Act (AHCA) as passed in the House of Representatives on May 4. The estimate is that relative to current law the bill will decrease spending by $1,111.1 billion and decrease revenue by $992.4 billion, leading to a total deficit reduction of $118.7 billion over the 10-year budget window from 2017 to 2026. This is lower than the preliminary deficit reduction estimate of $336.5 billion from prior to last-minute amendments and the House vote.

The budget office also estimates that the legislation would increase the number of people who are uninsured by 23 million in 2026 relative to current law -- about a million less than the CBO estimate for the earlier version of the bill.

The small amount of deficit reduction in the legislation isn’t as important as the fiscal risks we have pointed out are inherent in the plan, from its lack of provisions to control health care cost growth, to the magnitude and rapidity of the Medicaid reductions, to the possibility that insurance subsidies prove inadequate, and finally to the likelihood that some insurance markets will collapse entirely. These risks could all lead to political pressure to increase spending down the road, yet without the framework or time to produce more sensible policy discussions and an adequate balancing of trade-offs.

That is why we hope the Senate will take the time to think carefully about what needs to be fixed in the insurance market and make it better. They should utilize the expertise of the CBO throughout the process. We also hope senators redirect the focus of health care legislation to long-term cost control. That is ultimately the best and most lasting way to lower the costs of health care for individuals, states and the federal government.