Nearly three weeks after the House of Representatives narrowly passed the American Health Care Act — a budget resolution intended to repeal and replace much of the Affordable Care Act — the nonpartisan Congressional Budget Office is estimating that this latest version of the GOP plan will still leave 23 million additional people without insurance, and result in policies that will drive up your out-of-pocket expenses.

The CBO report [PDF] estimates that the House-passed version of the AHCA will reduce the federal deficit, but only by $119 billion over a ten-year period. That’s $32 billion less than the previous version of the bill, and nearly one-third the predicted savings of the original AHCA proposal.

In terms of the expected effect on the level of uninsured, CBO estimates that 14 million Americans who have coverage under the Affordable Care Act would be without insurance within the first year of repeal; 19 million by 2020 and 23 million in 2026. This is nearly identical to the previous estimate, which calculated that 24 million people would be without insurance that they would have under current law.

Lower Premiums (Maybe), But Less Coverage

What about the cost? Once again, CBO predicts that policies on the individual market will increase in price sharply in the years immediately following repeal, by about 20% in 2018 then another 5% in 2019. What happens after that will largely depend on how many states apply for waivers to various coverage requirements in the Affordable Care Act, and how those states implement the waivers.

For its estimate, CBO figured that about half of the country’s population lives in states that are unlikely to opt out of any of the ACA requirements; about one-third of the population lives in states that would make moderate changes to these requirements; and about one-sixth of Americans would be in states that would fully waive ACA mandates, giving insurance providers the ability to charge people with pre-existing conditions more for coverage.

In states that don’t opt out of any ACA mandates for insurance coverage, CBO estimates that average premiums would in the individual insurance market would be about 4% lower in 2026 than under current law, but that’s mostly because a younger portion of the population would be purchasing insurance. Starting in 2019, insurers would be able to charge older Americans up to five times as much as their younger counterparts.

For those people living in the states making moderate tweaks to the Obamacare rules, CBO says that insurance rates could drop as much as 20% by 2026, but with the huge caveat that this price drop comes “primarily because, on average, insurance policies would provide fewer benefits.” And once again, the expected price reductions for younger people would be substantially larger than the ones seen by older Americans.

Then there are those states that would likely waive all the possible ACA requirements for coverage. CBO does not forecast a specific percentage — or even a range of percentages — for the rate changes in these states. The report acknowledges that average premiums would be lower because waiving the requirements for quality coverage “would cause plans to a cover a smaller percentage of expected health care costs.” Additionally, one’s actual cost for insurance in these states is going to “vary significantly according to health status and the types of benefits provided, and less healthy people would face extremely high premiums, despite the additional funding” added by the House.

“Over time, it would become more difficult for less healthy people (including people with preexisting medical conditions) in those states to purchase insurance because their premiums would continue to increase rapidly,” continues the report.

Higher Out-Of-Pocket Costs

So while one’s insurance premium might go down, their out-of-pocket healthcare expenses could increase, particularly for the ACA’s “Essential Health Benefits” (EHBs) which include maternity care, mental health and substance abuse benefits, rehabilitative and habilitative services, and pediatric dental benefits.

“In particular, out-of-pocket spending on maternity care and mental health and substance abuse services could increase by thousands of dollars in a given year for the nongroup enrollees who would use those services,” explains the report.

Also, if a state waives an EHB, then it is also waiving the current ban on lifetime and annual coverage limits on that benefit. So even if a plan includes maternity care, it could put an annual or lifetime cap on that benefit, meaning you’d have to go out of pocket once you cross that limit.

“That could happen, for example, to some people who use expensive prescription drugs,” notes the CBO report. “Out-of-pocket payments for people who have relatively high health care spending would increase most in the states that obtained waivers from the requirements for both the EHBs and community rating.”

Instability On The Horizon

Rather than stabilize the individual insurance market, CBO forecasts that allowing states to fully opt out of Affordable Care Act requirements could further destabilize the industry.

By allowing people to cherry-pick the types of coverage they want, a large number of people getting insurance will be younger and healthier because they will have the lowest premiums. That would drive up the cost for the smaller number of high-risk individuals, says the CBO, and they may “ultimately be unable to purchase comprehensive nongroup health insurance at premiums comparable to those under current law, if they could purchase it at all.”

As a result, says the report, the individual insurance markets in waiver states would “become unstable for people with higher-than-average expected health care costs. That instability would cause some people who would have been insured in the nongroup market under current law to be uninsured.”

Betsy Imholz, Special Projects Director for our colleagues at Consumers Union notes that the promise of the AHCA was to cover more people with better insurance that cost less, which she contends is a far cry from what the CBO score shows.

“While 23 million Americans will lose coverage, those who are able to find coverage will see rising out-of-pocket costs from plans that may offer little, if any, meaningful coverage,” says Imholtz. “And the devastating cuts to Medicaid will threaten those most in need and could ultimately endanger the financial well-being of the entire healthcare system. Every element of this legislation is a broken promise.”