Last week, the Congressional Budget Office (CBO) released an updated analysis of the American Health Care Act (AHCA). As mentioned in my previous health care updates, my staff and I remain plugged into this debate. We will continue to deliver a fact-based analysis of any new information we receive and break down the specific impact it will have for us here in Nevada.
In regards to the AHCA, I hear from many of you on a daily basis who have raised concerns about the recent House-passed legislation, so I wanted to take a moment to address some of those concerns. Below is information pulled directly from the CBO’s latest analysis of the AHCA in regards to insurance rates and premiums.
Insurance Rates & Premiums
1. Increase in Employer-Based Coverage
Since the implementation of the Affordable Care Act (ACA), signed into law by President Obama in 2009, many Nevada employers have decreased their employees’ work weeks to 30 hours or less. As a result, employer-based coverage has dropped approximately 3% and enrollment on the ACA Exchanges (private market) in Nevada has increased 3%.
In regards to coverage offered on the ACA Exchanges, it’s important to note that most counties in CD-2 only have one insurance provider to choose from, and most of these folks are at risk of losing that one provider. If residents in these counties do not purchase coverage from the sole provider in their area – under the ACA, they are forced to pay a penalty.
CBO ANALYSIS: By repealing a multitude of ACA mandates, the House-enacted AHCA seeks to increase consumers’ choices as opposed to inflicting penalties. Therefore, the CBO concludes, the AHCA would result in 4 million more individuals nationwide being covered by their employer.
2. Healthy People Will Join the Market
One of the ACA’s primary failures was the fact that dramatic increases in premiums and deductibles discouraged young and healthy individuals away from the health care Exchanges (individual marketplace). If our goal is to lower premiums for everyone in the individual marketplace, the last thing we want to do is push healthy individuals out of this space since their participation is directly associated with lower costs.
CBO ANALYSIS: The CBO estimates that the AHCA will attract enough healthy individuals to “sufficiently stabilize” a market which is now on the brink of collapse.
3. Premiums Will Go Down
Under the AHCA, the CBO expects premium costs to sharply decrease from current levels after a two-year period.
CBO ANALYSIS: In 2018, the CBO expects premiums to increase by 20% percent (keep in mind, under the ACA, premiums have increased by 86% in Nevada and they continue to climb). We will continue to see an increase in premiums and deductibles because the implementation of the new bill will not have an impact on the markets in its first year. However, if we continue under the existing health care law without implementing new legislation, we can expect to see indefinite hikes in costs.
In 2019, if legislation is enacted, we expect to see a sharp decline in premium increases at 5%. Again, if new legislation is passed, in the coming two-year period, costs are estimated to go down, subsequently lowering by 4% in states like Nevada where no changes to Essential Health Benefits are expected to be requested by waivers.
4. The AHCA Lowers the Cost of Health Care
CBO ANALYSIS: The CBO estimates the AHCA will deliver a $1 trillion tax relief to consumers through the removal of certain taxes we’ve been forced to pay under the ACA. This includes present taxes on: eye glasses, oxygen tanks, glucose monitors, prescription drugs, and health insurance (that’s right – we’re presently forced to buy health insurance, and then are taxed on that purchase). We are also expected to see a reduction in the annual federal deficit by $119 billion over the next 10 years.
As promised, my staff and I will continue examining all new information related to the AHCA and clarify what it means for folks in Nevada. I ask that you please take a moment to review the CBO’s analysis if you have not already, and let me know what you think through my website. Stay tuned for the next health care update in which we plan to examine: the uninsured population and keeping your current coverage. In the coming weeks, we will also be discussing: Medicaid, Community Health Centers, women’s health services, pre-existing conditions, and the single payer system.
