Donald Trump, the CBO Score and the Real Impact of the Senate's Republican Health Care Plan

626_McConnell Health Care
Senator Majority Leader Mitch McConnell is trailed by reporters as he walks to the Senate floor of the U.S. Capitol after unveiling a draft bill on healthcare in Washington, U.S. June 22, 2017. The CBO released its score of the bill on June 26. Kevin Lamarque/REUTERS

The Congressional Budget Office (CBO) "score" of Senate Republican's health care overhaul is bad news for the legislation's supporters, but not as bad as it could be.

The CBO, a nonpartisan agency that analyzes the impact of proposed legislation, estimates that the Senate's proposal to repeal and replace Obamacare would leave 22 million more Americans without health insurance. That's 1 million less than the 23 million the CBO estimated would be uninsured under the House health care bill passed in May—not exactly the softer, kinder approach President Donald Trump and Senate Republicans had promised. What's more, it may only be the beginning when it comes to coverage losses, if the Senate version of the bill becomes law.

Related: The agency that could derail Republicans' Obamacare repeal

That's because the CBO uses a 10-year window to assess the impact of legislation. So the CBO's estimate of coverage losses run through 2026. Roughly 15 million of the people projected to lose insurance are those who currently rely on Medicaid, the government-run insurance program for the poor, disabled and elderly. The CBO concludes that "spending on the program would decline in 2026 by 26 percent" compared to current law. The heaviest cuts to federal Medicaid funding, however, will just be kicking in then, and the CBO score doesn't capture most of that impact.

Under current law, the federal government matches state spending on Medicaid on an open-ended basis. As part of its fundamental restructuring of the 50-year-old health safety net, the Senate legislation would cap how much the federal government chips in, which experts say would dramatically reduce the amount of money going into the program. But the Senate bill saves its most significant cuts to Medicaid spending until 2025. That's when law switches how it calculates the cap it would place on federal Medicaid funding—from the consumer price index for health care to the general consumer price index, which rises more slowly. As the Urban Institute noted in recent analysis, that change is significant—the former is projected to grow at a rate of about 3.7 percent over the next decade, but the latter would only grow at about 2.4 percent (the CBO affirms that rate in its report).

The Urban Institute study estimates if the Senate bill becomes law, the federal government would spend far less on Medicaid between 2019 and 2028 than even the House proposes—to the tune of nearly $500 billion. And it would amount to a whopping $841 billion less than what federal Medicaid spending would be under current law. As the Urban Institute puts it, "This change would ensure a shortfall between federal Medicaid payments and projected Medicaid costs that will grow over time." The CBO score, however, only captures the first two years of that shift.

Democratic critics of the Senate proposal have accused Republicans of "budgetary gaming" to obscure just how big an impact their bill will have on Medicaid. In a June 23 letter to the CBO and its counterpart, the Joint Committee on Taxation, Illinois Senator Tammy Duckworth asked the agencies to conduct a 20-year analysis, rather than the traditional 10-year period. "The people of Illinois could be forced to live with the consequences of the Senate Republican-authored BCRA long past 2026," she wrote, using the acronym for the legislation's title, the Better Care Reconciliation Act. "As their United States Senator, I need to understand how this proposal may impact their lives as they age over decades, not just the next 10 years."

Duckworth's appeal appears to have gone unheeded at the CBO. But Democrats will certainly be hammering on this point to voters in states with large Medicaid rolls like Ohio, West Virginia and Nevada, whose Republican senators now face a tough choice between party loyalty and home state interests.