A much-anticipated analysis of GOP plans to overhaul the Affordable Care Act (ACA) makes it clear that health insurance could change drastically for most people, especially older ones, the sick, and the poor. And the precise effect will likely differ depending on where you live.

The analysis of the House Republican’s American Health Care Act (AHCA) comes from the nonpartisan Congressional Budget Office. The new CBO report was needed because its previous calculations, in March, were done before amendments were tacked onto the bill that the House passed in early May.

House Speaker Paul Ryan said in a statement, “This CBO report again confirms that the American Health Care Act achieves our mission: lowering premiums and lowering the deficit.”

And indeed the CBO report does project that the AHCA would save the government about $119 billion by 2026 and over time slightly lower average premiums.

But it also makes it clear those savings would come at the expense of 23 million people losing insurance than if the Affordable Care Act remained in place. And premiums would decline, according to the CBO report, “in part because the insurance, on average, would pay for a smaller proportion of health care costs."

In other words, because insurance would be skimpier, and people would have to pay for more of their healthcare out of their own pocket, says Betsy Imholz, director of special projects for Consumers Union, the policy and mobilization arm of Consumer Reports. “Those who are able to find coverage will see rising out-of-pocket costs from plans that may offer little, if any, meaningful coverage," she says.

Moreover, those changes will likely vary substantially depending on your age, your health, and where you live. In some states, the CBO report says that people with pre-existing health problems may not be able to buy insurance at all.

The 3 Takeaways

1. The number of people without insurance would nearly double.

The CBO estimates that 23 million fewer people will have health insurance by 2026 under the latest version of the AHCA, slightly less than the 24 million that the CBO first projected.

The CBO chalks up the difference mainly to fewer people losing employer health insurance. Employers would be less likely to drop coverage if they knew their workers wouldn't get adequate coverage in the individual insurance market and would choose to offer insurance to attract workers, says Sara Collins, vice president of health care coverage and access at the Commonwealth Fund, a nonpartisan foundation that does independent research on health and social issues.

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But that would do little to offset other changes proposed by the AHCA that would cause many more people to become uninsured. Over half of the 23 million people expected to lose their insurance would come from the proposed $834 billion in cuts to Medicaid, the health insurance program for low-income Americans. Other drops in coverage would come from the AHCA’s plan to eliminate the individual mandate, which requires most people to buy health insurance or pay a fine.

In total, according to the CBO, the number of people under 65 who are uninsured would reach 51 million in 10 years, compared with 28 million under the ACA.

2. Your premiums may go down, but your insurance could be skimpier and you'd pay more out of pocket.

Under the AHCA, premiums will be sharply higher initially, rising 20 percent in 2018 and 5 percent in 2019, according to the CBO. By 2026 though, premiums will be 4 percent lower on average for about half the population. That's because the AHCA provides more generous tax credits to younger people than under the ACA.

That gives younger and healthier people more incentive to buy insurance and reduces the cost for insurers to provide coverage. While younger people could see substantially lower premiums, older people will face higher premiums. The AHCA allows insurers to charge older people up to five times more than younger people. Under the ACA, insurers can only charge three times as much.

About one-third of people in the U.S. will see premiums drop more substantially, on average by 20 percent in 10 years. But that's mainly because they live in states that choose to waive a current ACA requirement that insurers offer a package of 10 "essential" health benefits.

While premiums would be lower because people are buying less comprehensive insurance, your out of pocket spending costs could be substantially higher because you'd need to pay directly for care not covered under your insurance policy. According to the CBO, those services likely not to be covered include maternity care, mental health, and substance abuse.

In those states, you'd also lose a critical ACA financial protection: The ACA bans limiting annual out-of-pocket spending and lifetime limits on coverage. But those caps only applied to covered benefits and wouldn't apply to health benefits no longer deemed essential in a state.


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3. People with pre-existing conditions could pay a lot more depending on where they live.

The AHCA also allows states to apply for waivers that would enable insurers to charge people with pre-existing health conditions higher rates if they have a break in health insurance coverage. 

The CBO projects that about one-sixth of people—about 54 million Americans—live in states that would likely choose to waive both essential health benefit requirements and protections for people with pre-existing health conditions. In those states premiums would vary significantly based on your health and the types of benefits provided, leaving less healthy people with extremely high premiums.

In those states, the CBO's forecast is grim: "People who are less healthy (including those with preexisting or newly acquired medical conditions) would ultimately be unable to purchase comprehensive nongroup health insurance at premiums comparable to those under current law, if they could purchase it at all."