Health Care Industry Anticipates CBO Score For House-Approved Bill

NPR's Audie Cornish speaks with Caroline Pearson, senior vice president of Avalere Health, about what the new CBO score for the American Health Care Act means for reconciliation with the Senate.

AUDIE CORNISH, HOST:

Three weeks ago, Republicans in Congress passed the American Health Care Act. Today the nonpartisan Congressional Budget Office released its analysis of the bill. The report, referred to as the score, evaluates how the legislation could affect the deficit, the number of Americans insured and the cost of premiums. Here to break all that down is Caroline Pearson. She's a senior vice president for Avalere, a health care consulting group. Welcome to the program.

CAROLINE PEARSON: Thanks for having me, Audie.

CORNISH: So the last time around, the CBO determined that the GOP proposal would save $150 billion over the next decade while at the same time leave 24 million people uninsured. And that really hurt that bill's chances. So now that the House has passed something, what does the CBO score say about it?

PEARSON: Well, not significant changes. The CBO now says that the bill will save $119 billion over 10 years and reduce the number of uninsured - of insured people by 23 million.

CORNISH: By what year? Help us understand their forecast.

PEARSON: Yeah, by 2026. So they're looking about 10 years into the future for those estimates.

CORNISH: Now, this bill, as we said, did earn a yes vote from the House. And it made changes that allow states to make some key decisions that could affect the price of health insurance. Does that complicate things for the CBO? I mean aren't they effectively guessing how states will behave?

PEARSON: They absolutely are guessing how states will behave and how insurers will behave as a result of new rules. Insurance markets are inherently local, but what the bill does is really give states even more flexibility to change the rules of the game in their insurance markets. So CBO had to predict how states would react. And what they said is we're going to see a real divergence of experience where in some states, costs will go down for people buying insurance in the individual market. In others, folks may not even be able to buy insurance because the market won't be viable.

CORNISH: What does this report say in terms of premiums? Are premiums going to go up under what the House has passed, or will they change over time?

PEARSON: You know, on average, we think premiums will go down a little bit. What CBO says is that about half of people reside in states where things will be pretty consistent. Premiums will decrease by about 4 percent over 10 years. By contrast, about a third of the country resides in states where benefits are going to be skinnied (ph), and premiums will come down by about 20 percent. And then that remaining sixth of the country, that's where CBO is really guessing. But for people with pre-existing conditions, they may, in fact, not be able to afford insurance at all.

CORNISH: Let's dig into that a little more because we know this has been a sticking point in negotiations over the bill, and the bill does still have to go to the Senate. What does the CBO say is going to happen to people who have so-called pre-existing conditions?

PEARSON: Sure. So if a state decides to allow insurers to adjust premiums based on pre-existing conditions, based on people's medical conditions, then what that means is that premiums are going to skyrocket for anybody who has a chronic condition when they're trying to buy insurance. So in those states, we'll see premiums probably completely unaffordable, potentially up by about 800 percent for people with pre-existing conditions, and then premiums coming way down for people who are relatively young and healthy.

CORNISH: Did you just say 800 percent? Is that what's in this report?

PEARSON: I did indeed. That is a true fact within the score.

CORNISH: Now, you advise health care companies. What were they looking for? And do you think that this is going to be a surprise to them - a pleasant one, an unpleasant one?

PEARSON: I think this is generally consistent with what most people expected. We expected the coverage numbers and the budget numbers to stay relatively consistent, so this is not a big surprise. Ultimately we expect it to change a lot in the Senate, and so all eyes turn to the Senate at this point, who presumably will be working to try to bring those numbers of uninsured down in their next version.

CORNISH: And when it comes to the Senate, how much of an impact could something like the CBO report have?

PEARSON: The CBO report has a considerable impact on the politics of getting senators to sign on as well as the sheer rules about what they are allowed to pass under the budget rules that - within which they're operating. So it's critically important moving forward.

CORNISH: Caroline Pearson is a senior vice president of policy and strategy at Avalere, a strategic advisory firm consulting with health care companies. Thanks so much.

PEARSON: Thank you.

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