The CBO Score and the American Health Care Act

At no point should the discussion of health care and relevant legislation be relegated to a small, elite group of people; it belongs to the public, a principle which is often (and unfortunately) offset by the complicated language it is typically composed of. In the interest of deconstructing latest developments in the health care arena, this article will see a simplified summary of the recently released CBO score and how it affects the American Health Care Act.

First off, what is a CBO score and how much stock should we place in it?

  • Perhaps we should begin with what the CBO is in the first place. The Congressional Budget Office is a federal agency that provides nonpartisan, budgetary analysis for the U.S. Congress. (Nonpartisan is the key word here.)
  • It was signed into effect through the Budget Act of 1974 with the purpose of producing "independent analyses of budgetary and economic issues to support the Congressional budget process” (CBO).
  • Each year, the CBO releases a score of proposed legislation which estimates the budgetary impact of said legislation. If the legislation is relevant to issues of health, the report often provides supplementary information on premiums and policies.
  • However, the CBO score is adamant about staying away from policy recommendations so as to maintain its status as being independent of politics and focused solely on budgetary concerns.
  • Thusly, the CBO supplies its estimates based on the structural components of states, as opposed to their political composition, which is a difficult line to skate around. Predicting what states will do apart from their political standings is extremely difficult, especially when it comes to trying to decide which states will apply for waivers and which will not.
  • The CBO estimates are not necessarily accurate—as they will attest to in their reports—but they are consistent. They provide nonpartisan frameworks for both politicians and the public to consult to when it comes to complex, highly polarizing legislation, such as the AHCA.
  • Economist David Autor said of the agency, “CBO has a good track record with a very difficult assignment. It errs, but not systematically or with partisan intent.” This seems to be a reasonable conclusion of the CBO and its affairs.

On May 24, 2017, the CBO released its score on the American Health Care Act (AHCA). What did it say?
Many, many things, the most important of which are these items:

  • The AHCA would reduce the federal deficit by $119 billion over the period 2018-2026. An earlier estimate by the CBO suggested that the AHCA would save as much as $150 billion. An earlier estimate than that pitched a number of $337 billion.
  • In comparison with previous versions of the act, the number of people with health care would be higher and premiums, for a percentage of Americans, would be lower.
  • Savings would be effected through the cutting of Medicaid, as well as significant subsidies from the Affordable Care Act (ACA). These actions would be offset by repealing tax provisions in the ACA that are not directly related to health care coverage.
  • If this bill is passed into law, approximately 23 million more people will be uninsured in 2026 than they are under the current law.
  • Under the legislation, millions of people would buy policies that would not cover major medical risks.
  • Due to states being able to apply for waivers that modify the governance of essential health benefits which must be covered by health insurance, clients with pre-existing conditions could find themselves paying more for coverage than healthier counterparts.

Due to the AHCA’s sizable reduction of the federal deficit, the bill will be passed on to the Senate for further modification and voting. Until then, it is critical that we, as an invested people, take the time to consider all of the processes that have led us up to this crucial point and beyond. More importantly, it is necessary—and even just—to remember that health care is a conversation that everyone should have the tools to partake in.