On Tuesday, the Congressional Budget Office (CBO) released findings indicating that the House Republican health care reform plan, set for a vote on Wednesday, could reduce premiums by 11% and save $35.6 billion.
Speaker Mike Johnson (R-Louisiana) and House Republicans introduced the Lower Health Care Premiums for All Americans Act last week, which features:
- Increased transparency for pharmacy benefit managers (PBMs)
- Cost Relief Payments (CSR) to help lower premiums
- Expanded access to Association Health Plans (AHPs), enabling self-employed individuals and organizations like Costco, Amazon, and Sam’s Club to create their own health insurance pools.
- Protections for small business employers against catastrophic liability claims
- Codification of a Trump-era rule permitting employers to offer defined contributions for employees to purchase their own health insurance.
The CBO, along with the Joint Committee on Taxation, reported that this plan would lead to an 11% drop in baseline health insurance premiums and save $35.6 billion by 2035. However, it also predicted a decrease of 100,000 people enrolled in health insurance over the same period.
This analysis reflects findings from a Paragon Health Institute report, which estimated that the Republican bill would save $30 billion and cut premiums by 12%. The overall reduction in premiums largely stems from allocated funds to alleviate costs.
Association Health Plans are noted to have significantly lower premiums compared to those under Obamacare.
According to the Washington Post, savings from these new AHPs ranged from 23% to 29%, depending on whether the plans are commercial or self-funded. A review of more than 20 health plans indicated that they “offer more generous benefits and lower premiums than those found in the Obamacare marketplace.” The rule would allow groups like the Southern Arizona Chamber of Commerce to extend affordable insurance options to small businesses in several southern Arizona counties. Despite these positive developments, 11 states have successfully initiated lawsuits to block the rule, removing these coverage options from the market.
The House plans to vote on the bill on Wednesday. However, moderate House Republicans, like Rep. Mike Lawler (R-N.Y.), may find it challenging since an amendment to extend the expiring enhanced subsidies from Obamacare will not come to a vote.
