Republican healthcare plan will cost 23 million people their coverage, CBO says

The hastily redrawn Republican plan to overhaul Obamacare would leave an extra 23 million people without health insurance over the next decade, the first official independent analysis of the plan has found.

The health reforms, forced through the House earlier this month and exuberantly celebrated by Donald Trump and scores of Republicans in the White House rose garden, would reduce the federal budget deficit by $119bn over the same period, according to an estimate by the nonpartisan Congressional Budget Office on Wednesday.

The new bill would cut premiums for the healthy but leave vulnerable people facing notable cost increases, if they can find insurance at all. “Premiums would vary significantly according to health status and the types of benefits provided, and less healthy people would face extremely high premiums,” the CBO concluded.

The analysis comes almost three weeks after House Republicans took the unusual step of passing their healthcare plan before the agency had time to estimate how much it would cost and how many people would be affected.

The bill – which some Republicans admitted they had not read – was pushed through after a first attempt was cancelled at the last moment when it became clear that Republicans could not muster enough support in their own ranks to pass it.

An analysis of the first attempt at a healthcare overhaul estimated that the bill would throw 24 million people off their insurance over the next decade while reducing the deficit by $337bn in the same period.

Republicans have faced a tremendous backlash at town hall meetings in their districts as it became clear that the poor and sickest people would either lose insurance or see premiums rise.

The report out Wednesday makes clear that the revised bill, which passed the House on 4 May, would be better value in terms of reducing the deficit, but is barely improved, with 23 million people forecast to lose coverage instead of 24 million.

For those who retain insurance, while premiums would decline on average, people living in states that allow insurers to drop so-called essential health benefits would face hikes of “thousands of dollars” a year for services including “maternity care, mental health and substance abuse benefits, rehabilitative and habilitative services, and pediatric dental benefits”.

The CBO estimates that one-sixth of the US population (about 51.3m people) live in states that are likely to drop requirements for essential health benefits and that in these states unhealthy people may well find insurance unaffordable under the new bill.

Trump’s changes to the Affordable Care Act (ACA) would also mean that “people who are less healthy (including those with pre-existing 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”, the CBO found.

Republicans failed to gain enough support on their first attempt to overhaul the healthcare system in March, when the House speaker, Paul Ryan declared the ACA, popularly known as Obamacare, would remain law for “the foreseeable future”. Weeks later, under mounting pressure from a White House in search of a legislative victory ahead of Trump’s 100th day in office, talks between moderate and conservative House Republicans gave way to a compromise proposal.

The amendment would allow states to opt out of coverage for pre-existing conditions, a move conservatives argue would lower overall premiums by removing sick people from the market. An estimated 27% of Americans under 65 have pre-existing conditions, including cancer, heart disease and diabetes, that were not covered prior to the ACA.

To attract support from moderate Republicans who balked at the plan, an additional $8bn was included over five years to fund so-called high-risk pools that would help subsidize costs for people with pre-existing conditions. Some health experts have argued that this is insufficient.

The bill is expected to undergo significant changes in the Senate, where it has already received a cool reception. A working group of 13 Republican senators – which has drawn criticism for being entirely male and conservative – has already set about adjusting the Republican plan. If the Senate approves a plan that differs significantly from the House bill, the legislation will go to a conference committee, where representatives from both chambers will iron out the differences.

The House speaker, Paul Ryan, welcomed the assessment’s finding that the plan would lower premiums on average, although he did not acknowledge that they would go up for millions of vulnerable Americans.

“This CBO report again confirms that the American Health Care Act achieves our mission: lowering premiums and lowering the deficit. It is another positive step toward keeping our promise to repeal and replace Obamacare,” Ryan said in a statement.

In a statement, the health and human services secretary, Tom Price, dismissed the analysis in the report and questioned the budget agency’s ability to forecast the impact of the healthcare plan.

“The CBO was wrong when they analyzed Obamacare’s effect on cost and coverage, and they are wrong again,” Price said. “In reality, Americans are paying more for fewer healthcare choices because of Obamacare, and that’s why the Trump administration is committed to reforming healthcare.”

Democrats denounced the bill as a “humanitarian catastrophe” and a “moral monstrosity”.

“For the good of the country, Republicans in the Senate should reject this path and work with Democrats to fix our healthcare system instead of pulling the plug on it,” the Senate minority leader, Chuck Schumer, said at a press conference with fellow Democratic senators after the report was published.

Senator Bernie Sanders raised the possibility that the bill may not comply with the Senate’s guidelines on budget reconciliation, a special process that would allow Republicans to pass the plan with a simple majority.

“On the reconciliation, the Help committee is required to save at least $1bn,” Sanders, the ranking member of the Senate budget committee, said at the press conference. “It is very possible that the new bill does not meet that basic requirement because of the high risk-pool and stabilization amendments that were added to the bill ... and if that is the case, reconciliation is not a process they can use.”

Schumer added: “If that’s true, we don’t know yet, but there’s a real possibility that it just doesn’t meet reconciliation. That means that the House has to come back with a new bill and vote again – it just doesn’t work.”

Before the report’s release, Senate Democrats held a press conference with the parents of children who spent their earliest years in the hospital fighting cancer and other people with a history of illness who may have to pay more for coverage as a result of their conditions, under the Republican plan.

Christine Remy of Virginia, whose young daughter, Sabrina, survived neuroblastoma, an aggressive type of childhood cancer, said: “If the AHCA becomes law, Sabrina and millions of other children and families may face a future where they cannot obtain quality health insurance and where they will constantly have to worry about whether they will be denied insurance if they change jobs or move to another state.”