The CBO just torpedoed the replacement of the Affordable Care Act today. The reason we care as stock traders is that the Trump Administration feels it can't pass tax reform until it deals with healthcare first. The torpedo from the CBO today means that lower taxes and an infrastructure spending bill just got delayed again.
The Senate bill to repeal the Affordable Care Act was edging toward complete failure on Monday following the nonpartisan Congressional Budget Office (CBO) stating that it would increase the number of people without health insurance by 22 million by 2026.
Insurer Blue Cross and Blue Shield said it was encouraged by the addition of incentives for continued coverage. Molina Healthcare said it preferred the Obamacare mandate, stated the Senate bill, even after revised, would only delay care.
But after the CBO's statement today, congressmen are running away from the Senate bill as fast as they can.
Senator Ron Johnson of Wisconsin hinted that he would likely oppose taking up the bill on a procedural vote expected as early as Tuesday, meaning that the fall of the Senate bill is likely imminent.
“On the present bill I am not voting to get on it unless it changes,” said Senator Rand Paul (R-Ky.) Asked if that meant he'd vote “no” on the first motion to proceed, the Kentucky Republican said “absolutely” and argued that leadership does not currently have the votes it needs.
Ms. Collins wrote on Twitter on Monday evening that she wanted to work with her colleagues from both parties to correct flaws in the Affordable Care Act, but that the budget office's report revealed that the “Senate bill won't do it.”
The report left Senator Mitch McConnell of Kentucky two options: pulling the bill from consideration while he renegotiates, or allowing it to go down in defeat.
The vote could come as soon as Tuesday, or maybe Wednesday.
The Senate bill would decrease federal deficits by a total of $321 billion within a decade, the budget office said.
Mr. McConnell, who's the chief author of the bill, wanted the Senate to approve it prior to a planned recess for the Fourth of July, but that seems increasingly doubtful. Misgivings in the Republican bill extend beyond some of the moderate and conservative members and Mr. McConnell can lose only two Republicans.
Johnson and Paul, as well as GOP Sens. Ted Cruz (Texas) and Mike Lee (Utah), announced last week that they couldn't support the bill in its present form.
Under the bill, the budget office said, subsidies to help people buy health insurance could be “considerably smaller than under present law.” Beginning in 2020, the budget office said, deductibles and premiums would be so onerous that few low-income individuals would buy any plan.
For instance, it said, for a 64-year-old having an annual income of $26,500, the net premium in 2026 to get a midlevel silver program, after subsidies, would average $6,500, compared with $1,700 under the Affordable Care Act.
The report stated, for a 64-year-old having an annual income of $56,800, the premium in 2026 would average $20,500 a year, or three times the number expected under the Affordable Care Act.
The budget office report was a significant setback to Senate Republican leaders.
The White House discounted the report, saying that the CBO had “consistently proven it cannot accurately predict the way that healthcare laws will affect insurance coverage.”
The 15 million people the CBO estimates will be uninsured in 2018 is mainly because of the repeal of the penalty associated with being uninsured. The CBO didn't consider the revised version that included the new waiting period.