Republican health care plan would reduce premiums by 11%, CBO says

U.S. House Republicans' five-point health care plan could reduce premiums by 11%, but could also increase the number of people without health insurance by 300,000 annually, according to a new Congressional Budget Office analysis.

House lawmakers will vote on the Lower Health Care Premiums for All Americans Act on Wednesday, which Republican leaders have been touting as an alternative to renewing the pandemic-era enhancements to the Obamacare Premium Tax Credit.

Congress temporarily expanded the PTC during the COVID-19 pandemic, and its reversion to original pre-pandemic levels after Dec. 31 will partially contribute to premium hikes for millions of Americans in 2026.

Extending the tax credit, a subsidy which goes directly to insurance companies, for the next 10 years would cost an estimated $350 billion. Republicans' bill, by contrast, would reduce the federal deficit by $35.6 billion by 2035, per CBO's report.

Key reforms in the bill include increasing oversight and transparency requirements for pharmacy benefit managers, reforming health reimbursement arrangements, and excluding stop-loss policies from the definition of health insurance coverage.

Most notably, the bill would finally appropriate funding for cost-sharing reduction payments, as well as loosen restrictions on which employers can form association health plans.

CBO projects that unlocking CSR payments would lower gross benchmark premiums for all Americans by 11%, though 300,000 people annually could lose their existing health insurance between 2027 and 2035.

The new rules for health association plans, however, would provide insurance to 200,000 people who currently have none.

Allowing small business owners and independent workers to band together across industries to form association health plans would increase the total number of people on those plans by an estimated 700,000.

The Lower Health Care Premiums for All Americans Act will likely pass the House, given Republicans' majority. But it will likely die in the Senate, given that 60 votes are needed for it to pass and Democrats staunchly oppose it.

"Over the next two weeks, millions will see skyrocketing premium amounts deducted from their bank account," Senate Majority Leader Chuck Schumer, D-N.Y., posted on social media Tuesday. "All thanks to Donald Trump and Republicans who are refusing to extend the ACA tax credits."