People who are pregnant, have a mental illness, or have pre-existing health conditions could face skyrocketing premiums under the Republican health care plan, according to a new Congressional Budget Office report.
The CBO projects that several states will use the bill's waivers to bypass the Obamacare rules that prevent insurers from raising prices on people due to their individual health circumstances. That, in turn, will lead to rapid cost increases for people facing health problems.
The CBO report released on Wednesday found that the American Health Care Act will save $119 billion over the next decade at a cost of 23 million more uninsured people than under Obamacare.
Those becoming uninsured will be disproportionately older — particularly between 50 and 64 years old — and poorer.
The bill passed the House earlier this month, but still needs to be approved by the Senate. Senate Republicans have indicated that they will work on their own bill and are in the process of making major changes to the House proposal.
House Republicans were hoping for a boost in the CBO's projection of insured people on Wednesday. They did not get it.
The CBO projected the original AHCA would cause 24 million more uninsured people over the next decade. For the amended bill, that number drops by just 1 million to 23 million new uninsured.
The AHCA's state waivers allow insurers to offer bare-bones insurance plans and charge higher rates to people with pre-existing conditions, all in the hopes of slashing premium costs for everyone else.
But the CBO expects sick people to face "extremely high premiums" in states that exercise those waivers.
"Over time, it would become more difficult for less healthy people (including people with preexisting medical conditions) in those states to purchase insurance because their premiums would continue to increase rapidly," says the report.
The CBO projects that about one-sixth of the American public live in states that will take the waivers. The result, the CBO projects, will be that insurers will drop several benefits that currently are mandated to be part of all insurance plans in those states. These include maternity care, mental health services, substance abuse treatment, and pediatric dental benefits.
"In particular, out-of-pocket spending on maternity care and mental health and substance abuse services could increase by thousands of dollars in a given year," says the report.
The CBO says the AHCA will lower premium costs on average, but this is tied to plans covering a smaller percentage of total health care costs.
Premiums will rise for plans that do not discriminate against people with pre-existing conditions in states that adopt the waivers, according to the report. The theory is that healthier people, who are less expensive to cover, will move into the cheaper health plans that only they are eligible for. This will raise costs on everyone, sick or healthy, in other plans.
The CBO also projects the amended AHCA to cut $834 billion from Medicaid over the next decade, most of which is redirected into tax cuts. The CBO projects Medicaid rolls will shrink by 14 million people over the next decade as Obamacare's Medicaid expansion is rolled back.
Women who purchase insurance on the individual market are expected to face significantly higher costs if they get pregnant in a state that waives maternity care as an essential health benefit. The CBO expects extra insurance riders that cover maternity to cost about $1,000 per month.
Overall, the report projects premiums will stay the same or drop for young people, but rise — sometimes dramatically — for older people. Premiums are projected to be lower for most wealthier people and higher for some poorer people.
The AHCA replaces the means-tested support payments under Obamacare with tax credits that are based solely on age. The AHCA allows older people to be charged five times more than younger people, but the tax credits are worth only twice as much.
This means people who are older and poorer will face the steepest premium hikes. The average 64-year-old making $26,500 pays $1,700 in premiums per year once Obamacare subsidies are factored in, according to the CBO. Under the AHCA that would jump to between $13,600 and $16,100 per year depending on whether state waivers are exercised.
Rep. Tom MacArthur, the New Jersey Republican who wrote the amendment creating the waivers, told reporters Wednesday that he doesn't buy the CBO's analysis. MacArthur, who worked in the insurance industry before entering Congress, noted that states that take the waivers will have to create high-risk pools to help keep costs down for those with pre-existing conditions.
"I'll put my knowledge of the insurance market against CBO's knowledge of the insurance market," MacArthur said. "I spent 30 years there and I don't agree with them that waivers will destabilize [the individual insurance market]. I think waivers will cover people with pre-existing conditions because they'll have to create risk pools, and that is what's driving everyone else's premiums down."
"I'm not a prophet, and let's remember, neither are they. They're predicting how states are going to act," MacArthur said, arguing that the CBO has no way of knowing how many states will take the waivers.
Texas Rep. Pete Sessions told reporters what several House Republicans have been arguing for months: They don't expect many states to take the waivers. "I've talked to people in Texas, among other places — I don't think it's a deal worthy of a state doing that. I don't think [states] are wild about trying to do [that]," he said.
Ema O'Connor contributed to this story.