Analysis: Don't Look For The CBO Scoring To Keep AHCA Bill Off Trump's Desk

Height Securities released its latest analysis of the American Health Care Act Friday following the Congressional Budget Office’s scoring report.

Height analyst Stefanie Miller believes the CBO’s scoring will not hinder Republican efforts to move the bill through to the President’s desk.

Updates To The Bill

Since the last version of the bill scored by the CBO on March 23, the following major changes have been made:

• The creation of a $15 billion high risk pool.
• The allocation of $15 billion in new funding for maternity and newborn care, mental health services and substance abuse services.
• States would be allowed to waive the 10 federally-defined Essential Health Benefits put in place by the Affordable Care Act.
• States would be allowed to waive federal preexisting condition protections for individuals whose coverage lapses for over 30 days; these states would have access to an additional $8 billion in high-risk pool funding.
• The repeal of the ACA’s payroll tax would be delayed until 2023.

CBO Scoring Breakdown

The newest rendition of the AHCA would save the federal government $119 billion over 10 years, a reduction from the $150 million savings cited in the previous version of the bill.

The AHCA would also leave 23 million Americans without healthcare insurance over the same period. Initial projections estimated 24 million, but the newest figure is still 3 million more than earlier versions.

About 1/6 of the population dependent on the healthcare exchanges would experience “instability” due to the Essential Health Benefits and preexisting condition provisions detailed above. The CBO expects the exchanges to return to stability by 2019.

The CBO also projects the cost of care for many conditions would increase substantially in those states that choose to waive the federal Essential Health Benefits, including maternity care, mental health and substance abuse services.

Premiums would rise by 20 percent in 2018 and 5 percent in 2019 for individuals using the exchanges.

Height’s 4 Major Takeaways

1. Senators will be limited to making adjustments to various provisions of the bill — as opposed to wholly rewriting them as they had hoped — due to the requirement that their version retain at least $119 billion in savings.
2. Miller expects the Senate will work to reduce the number of people left without healthcare by 4 million–5 million people, bringing it below 19 million.
3. “The worst news for Republicans in our view is the fact that premiums are projected to increase over the first two years for exchange participants,” wrote Miller. This will hinder conservatives’ goal of large and fast premium reductions.
4. Despite large challenges, Height doubts that anything in the CBO scoring will prove impossible to resolve by Congress’ August recess.

Healthcare Stocks

Following the CBO's report Wednesday, healthcare-related stocks were up for the most part at Thursday's close, including Health Care SPDR (ETF) XLV, Molina Healthcare, Inc. MOH, Aetna Inc AET and UnitedHealth Group Inc UNH.