/ News & Insights / CBO: Bipartisan Alexander-Murray Bill Would Save $3.8 Billion

CBO: Bipartisan Alexander-Murray Bill Would Save $3.8 Billion

6922094 - capitol hill building in the morning with colorful cloud , washington dc.
healthcare on October 25, 2017 - 4:36 pm in News & Insights

The Congressional Budget Office (CBO) released a score on Wednesday for last week’s bipartisan Alexander-Murray bill that seeks to stabilize the insurance marketplaces created by the Affordable Care Act for two years. The proposal, as it stands right now without the addition of clauses and negotiations sure to come as the bill moves forward, could lower the federal deficit by approximately $3.8 billion over the next decade but would not affect the number of insured Americans.

The bill was negotiated between Senators Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) and sees support from both sides of the aisle in the Senate, but is looked on less favorably by House Republicans and President Donald Trump. This tepid reception will likely cause the bill to progress slowly, most likely by the end of the year. According to the CBO, it is already too late to affect 2018 premiums.

According to Wednesday’s CBO Report, the savings generated come from allowing states to offer “copper plans,” lower cost insurance policies that offer less protection and appeal to healthier individuals in the marketplaces. These plans would start to enter the market in 2019 and could cause insurers to lower their rates, saving the government almost $1 billion in subsidies over the next 10 years.

The bipartisan bill would also generate savings by preserving the controversial cost-sharing subsidies eliminated two weeks ago by President Donald Trump. The return of CSR payments prevents the government paying insurers more money from separate subsidies that are tied to raising premiums.

“This nonpartisan analysis shows that our bill provides savings and ensures that funding two years of cost-sharing payments will benefit taxpayers and low-income Americans, not insurance companies,” Senators Alexander and Murray said in a joint statement.

Critics of the bill, including President Donald Trump and Speaker of the House Paul Ryan, judge the bill as a bailout for insurance companies for its inclusion of CSR payments.

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