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Evan Horowitz | Quick Study

CBO says Senate health bill picks your pocket

Senate Republicans’ health care bill would cause an estimated 22 million more Americans to be uninsured by the end of the coming decade, according to the Congressional Budget Office.Melina Mara/Washington Post

Under the Senate Republicans’ health care bill, the number of uninsured Americans would rise by 22 million. And for those who stay insured, out-of-pocket spending could rise dramatically.

Those are two of the headline conclusions in Monday’s analysis from the nonpartisan Congressional Budget Office, which provides official estimates of the cost and impact of proposed legislation.

For Republicans, the best bit of news was that their bill would ultimately save the government about $321 billion over 10 years. That’s particularly important as grease for last-minute deals. It means Republican leaders have dollars they can use to sweeten the bill for wavering members, without ending up in the red.

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Vulnerable Americans, however, may miss the billions that used to support their health care.

As was true with the House Republicans’ bill — which was estimated to save $119 billion and create 23 million newly uninsured Americans — the biggest changes in the Senate version relate to Medicaid, the government-run health insurance program most associated with the poor but which also provides coverage for people with disabilities and elderly Americans in need of nursing care.

Senate Republicans would cut Medicaid by nearly $800 billion between now and 2026, leaving 15 million fewer people covered by the program.

And the losses would only continue to accumulate after that. The CBO can’t say exactly how thin Medicaid will become, because it lacks a methodology for estimating effects beyond 2026. But it expects further enrollment reductions, which is not surprising given that Senate spending cuts are designed to increase with every passing year.

Moreover, the CBO is clear that for low-income people who lose access to Medicaid, there aren’t a lot of good options. True, the Senate bill makes low-income Americans newly eligible for subsidies, to help them purchase individual insurance. But in many cases, those subsidies will be grossly inadequate.

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As an example, the agency cites the case of a hypothetical person earning $11,400 in 2026. Their deductible would be half their annual income, meaning that even if they purchase a subsidized insurance policy, they’d have to spend half their earnings before it even kicked in.

Nor is it just the poor who can expect to pay more under the Senate bill. The CBO says that “most people” purchasing individual insurance would have higher out-of-pocket costs.

Even those with employer-provided insurance could see big jumps in personal outlays, depending on where they live. In some states, insurers will be given the right to offer “skinny” plans, without coverage for prescription drugs, mental health care, or other areas. Which would leave employees with little choice but to buy expensive add-on policies or pay for care themselves.

To some conservative health care analysts, this bump in out-of-pocket costs counts as a virtue of the Senate bill. It changes incentives, ensuring that people will only visit the doctor when it’s truly necessary — lest they waste their own money. And that can bring down overall health care spending.

However, this theory has only weak real-world support. People aren’t always in the best position to determine what’s serious and what’s trivial, which means they sometimes wait too long, miss out on the chance to get preventive care, and end up needing more expensive interventions. Also, this approach doesn’t work well for lower-income Americans, who can’t afford high deductibles in the first place and thus end up neglecting their own care.

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Perhaps the apogee of this move toward higher out-of-pocket spending in the Senate bill is the return of lifetime limits. President Obama’s signature health plan did away with these, forcing insurance companies to continue covering the chronically ill no matter how expensive their lifetime needs (think of people with hemophilia, who require regular, expensive care.) But the Senate bill brings back lifetime limits — at least in states that allow for skinny plans. And that means some people, the sickest people, could end up in a position where all their health care is out-of-pocket.

This, then, is the awkward choice many people will face under the Senate bill. Either you buy insurance with huge out-of-pocket costs; or you take the slight penalty that comes with being uninsured, a six-month waiting period before you can rejoin the insurance market.

And faced with such options, lots of people won’t bother with insurance. That’ll be fine for some, but anyone who gets hit with an unexpected illness will face massive personal costs. And those brought low by high medical expenses will have a harder time getting Medicaid, which is set to get smaller and smaller every year.

At least, that’s the CBO projection if the Senate bill becomes law. We’ll know soon enough. With Republican leaders still pushing for a quick vote, the next act in the ongoing drama that is US health care may begin this very week.

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Evan Horowitz digs through data to find information that illuminates the policy issues facing Massachusetts and the United States. He can be reached at evan.horowitz@globe.com. Follow him on Twitter @GlobeHorowitz.