June 2017

Last week, the Centers for Medicare and Medicaid Services (CMS) chief actuary released a report estimating the cost and health insurance impacts of the recent House-passed American Health Care Act, a bill to repeal and replace key parts of the Affordable Care Act. Key findings of the report include:

• An increase of 4 million uninsured Americans in 2018 and an increase of 13 million uninsured Americans in 10 years compared to current law.
• Federal expenditures will be reduced by $328 billion primarily because of lower Medicaid spending.
• On the individual insurance market, by 2026, gross costs of health insurance premiums will decrease by 13 percent compared to current law, but the net cost to consumers will increase by 5 percent due to reduced premium subsidies.  Further, by 2026, cost sharing copays and deductibles are expected to increase by 61 percent compared to current law, though wide variation is expected depending on state policy.
• The assets of the Medicare Hospital Insurance trust fund are estimated to be depleted in 2026, two years earlier than under current law.

  While covering similar ground the CMS actuarial report differs from the earlier Congressional Budget Office (CBO) in several ways.  First, compared to the CBO score, the CMS actuarial report estimated more federal costs savings ($328 vs $133 billion), fewer additional uninsured (13 million vs 23 million) and more net consumer cost increases on the private insurance market.