CBO: Revised Obamacare Replacement Would Cost Government More, Still Leave 52 Million Without Insurance By 2026

When the nonpartisan Congressional Budget Office first looked at the GOP legislation to repeal and replace the Affordable Care Act, it predicted that changes would cut more than $300 billion from the federal deficit over the next decade, but at the cost of 52 million Americans going without health care coverage. Republicans have continued to tinker with the bill and even canceled today’s scheduled vote in order to keep tweaking, but the latest numbers from CBO say that the revised legislation could result in fewer savings for the Treasury and no real change to the number of uninsured.

Rather than the $337 billion deficit reduction estimated earlier this month, the CBO now says [PDF] that less than half that amount ($150 billion) would ultimately be saved by the revised plan it reviewed.

The new estimate sees no real change in the number of Americans who would lose or drop coverage over the next decade. It still predicts that 14 million additional people would be without insurance in the first year, 21 million by 2020, and 24 million people by 2026. Remember, this is on top of those that would expect to be without insurance under “Obamacare,” so that means 52 million Americans without coverage by the end of the first ten years.

Likewise, CBO still predicts that insurance premiums will rise for the first few years and then — on average — decline after 2021.

So why would this version result in a smaller cut to the deficit? One reason, says the CBO, is a proposed reduction in the threshold for the medical care deduction on income taxes for older Americans. Right now, if you or your spouse is over the age of 65, you can deduct medical expenses that are greater than 7.5% of your adjusted gross income. A proposed revision would drop that threshold to 5.8%, meaning more tax deductions for older Americans with health care expenses. It also means fewer income taxes collected by the Treasury. CBO estimates around $90 billion in tax revenue would be lost by 2026.

Developing story. More to come…

by Chris Morran via Consumerist