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Price: We disagree strenuously with CBO report

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Lanhee Chen: CBO score provides an opportunity for GOP bill's sponsors to bolster support amongst conservatives

Trump, GOP must win over moderates who will want changes to the law that boost coverage, Chen writes

Editor’s Note: Lanhee J. Chen is the David and Diane Steffy Research Fellow at the Hoover Institution at Stanford University. He served as the policy director for Mitt Romney’s 2012 presidential campaign and was a senior aide at the US Department of Health and Human Services during the George W. Bush administration. The views expressed in this commentary are his.

CNN  — 

The Congressional Budget Office has released its estimate of House Republican legislation to repeal and replace Obamacare, and it highlights the tricky balance that President Donald Trump, Speaker Paul Ryan and other supporters of the proposed American Health Care Act have to strike.

Lanhee J. Chen

On the one hand, the CBO score provides an opportunity for the bill’s sponsors to bolster support amongst conservatives, some of whom have been critical of the congressional leadership’s approach – but whose backing will likely be needed if the bill is to pass the GOP-controlled House.

This conservative support may come, however, at the expense of moderates, who will be vocal when debate over the bill reaches the Senate. They might only support the legislation with changes that will improve upon CBO estimates of how many people it will leave uninsured.

For starters, the American Health Care Act (AHCA) is estimated to reduce deficits by $337 billion over the next 10 years – an important selling point for fiscal conservatives and those concerned about the sustainability of the health care system (and particularly Medicaid) going forward.

Furthermore, the legislation includes almost $600 billion in tax cuts over the next ten years by repealing many of Obamacare’s taxes.

Finally, the AHCA is expected, after an initial increase in premiums in 2018 and 2019, to lower premiums in the individual market beginning in 2020, and to contribute to a more stable marketplace for health insurance. This is because of the legislation’s “Patient and State Stability Fund,” which gives states assistance and flexibility to help cover those with higher health expenses and pre-existing conditions, in particular.

All in all, these facts should help counter the narrative that the bill is insufficiently conservative. It engages in the fundamental reforms that will lower federal health spending and eventually premiums and health costs for individuals purchasing coverage. The reforms will also expand choices in insurance marketplaces in the long-run. These are goals that opponents of Obamacare have long sought and should help bolster the conservative case for the AHCA.

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    The Trump administration and congressional Republican leaders will need to balance these benefits against the reality that some moderates cannot be won over without changes to the law designed to boost coverage. That may mean increased funding for the Medicaid program to create an even more gentle transition for states that elected to take the Medicaid expansion, such as Ohio and New Jersey – or more generous tax credits to help those who are older or who are poorer, for example, afford private coverage.

    Or perhaps provisions that require states to automatically enroll the uninsured in default, no-premium private insurance plans. Any or all of these reforms will likely boost coverage numbers. But they will cost money, eat into the budget savings currently generated by the bill, and may be viewed suspiciously by some conservatives.

    The CBO estimates illustrate the difficult choices that lie ahead for supporters of the AHCA: The law puts in place a number of important structural reforms that will eventually lower costs and place federal health spending on a more sustainable pathway.

    But these benefits are easily overlooked, given negative coverage around the CBO’s conclusions about the effects on coverage with the GOP plan, and continued conservative criticism of it. Whatever path they choose, President Trump and congressional leaders should not squander this unique opportunity to change the American health system for the better.