Voting on Health Care Bill Without CBO Score is Highly Problematic

Policy Memo
Monday, September 18, 2017

Republican lawmakers are trying to rapidly pass a bill to repeal the Affordable Care Act (ACA) through the Senate prior to the end of the fiscal year (Sept. 30) so that it can still enjoy budget reconciliation protections and avoid a filibuster.

The “Graham-Cassidy” bill would convert the current health care subsidies from the federal government for the ACA and the ACA’s Medicaid expansion into block grants and would require states to create rules for distributing the subsidies.

The states would gain a large degree of flexibility over how to do so and to whom, including altering the insurance rules allowing for things like the ability to charge more based on age or the existence of pre-existing conditions.

The block grants would be set to grow significantly more slowly than medical costs. The grants would then disappear entirely by the year 2027. In 2020, the traditional Medicaid program would be placed under a per-capita cap that reduces Medicaid spending by also growing much more slowly than expected costs for the Medicaid population.

Unfortunately, Republican senators appear willing to take up the legislation without a Congressional Budget Office (CBO) analysis of the specific deficit effects of the legislation and its impact on premiums and insurance coverage. The CBO said Monday that it would only be able to release a limited analysis on whether the legislation would meet the criteria needed to pass through the reconciliation process. Passing such a consequential piece of legislation without a full CBO analysis is highly problematic.

As we have written before, the prior attempts at repealing the ACA have involved numerous fiscal risks. The latest iteration is no different -- primarily in that it offers no policy that would attempt to control the growth trajectory of health care system costs. While federal spending on health care would surely go down under the bill, the “cost curve” of long-term health care inflation would remain untouched.

Ultimately that is a problem because as costs increase, states will be forced to cut people and/or services from Medicaid and the relative value of tax credits meant to help people find affordable insurance in the non-group market will decrease -- to say nothing of what happens when states and individuals are left to fund programs on their own after 2027.

Meanwhile, the latest drive for repeal is jeopardizing what was a fledgling opportunity to take swift bipartisan action to stabilize insurance markets and control health care cost growth.

As the legislative process moves forward, lawmakers should assess the realistic trade-offs of costs, access to care, and quality of care. Legislation that moves too quickly without such a thorough consideration risks massive insurance coverage loss, public frustration, uncertainty for providers, gyrating insurance premiums and repeated overhauls with each new Congress and each new president.