Congressional Budget Report could upset GOP efforts to repeal Obamacare

House Republicans passed their health care bill in early May. Now, they get to find out what's in it.

In a highly unusual move, House leaders brought the American Health Care Act to a vote three weeks ago without waiting for the Congressional Budget Office, the nonpartisan agency responsible for scrutinizing legislation, to evaluate its effects.

The agency is scheduled to release its report on the AHCA on Wednesday afternoon. The CBO previously weighed in on a version of the AHCA that the House was set to vote on in March before Republican leaders withdrew the bill due to lack of support.

The bill that passed in May included major changes to satisfy conservative members, however, including a provision allowing states to waive key protections for people with pre-existing conditions. The new report will provide the most detailed nonpartisan analysis yet of the bill's potential impact and its findings will be dissected by critics and supporters of the bill for weeks to come.

The story so far

The first CBO report landed like a bombshell in the middle of the health care debate in March. Their analysis concluded that the plan would leave 24 million more people without insurance after a decade in comparison to current law.

RELATED: A look at the battle over the American Health Care Act

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WASHINGTON, DC - MAY 04: Republican House members join U.S. President Donald Trump on stage as he speaks during a Rose Garden event May 4, 2017 at the White House in Washington, DC. The House has passed the American Health Care Act that will replace the Obama era� Affordable Healthcare Act with a vote of 217-213. (Photo by Alex Wong/Getty Images)
WASHINGTON, DC - MAY 04: U.S. Sen. Bernie Sanders (I-VT) speaks during a Stop 'Trumpcare' rally May 4, 2017 in front of the Capitol in Washington, DC. Congressional Democrats joined activists for a rally to urge not to replace Obamacare, also known as the Affordable Care Act. (Photo by Alex Wong/Getty Images)
WASHINGTON, DC - MAY 04: U.S. Senate Minority Leader Sen. Charles Schumer (D-NY) (R) greets House Minority Leader Rep. Nancy Pelosi (D-CA) (L) during a Stop 'Trumpcare' rally May 4, 2017 in front of the Capitol in Washington, DC. Congressional Democrats joined activists for a rally to urge not to replace Obamacare, also known as the Affordable Care Act. (Photo by Alex Wong/Getty Images)
WASHINGTON, DC - MAY 04: U.S. President Donald Trump shares a moment with Speaker of the House Rep. Paul Ryan (R-WI) during a Rose Garden event May 4, 2017 at the White House in Washington, DC. The House has passed the American Health Care Act that will replace the Obama era� Affordable Healthcare Act with a vote of 217-213. (Photo by Alex Wong/Getty Images)
WASHINGTON, DC - MAY 04: U.S. House Minority Leader Rep. Nancy Pelosi (D-CA) (L) gestures as Sen. Patty Murray (D-WA) and Sen. Bernie Sanders (I-VT) wait for their turns to speak during a Stop 'Trumpcare' rally May 4, 2017 in front of the Capitol in Washington, DC. Congressional Democrats joined activists for a rally to urge not to replace Obamacare, also known as the Affordable Care Act. (Photo by Alex Wong/Getty Images)
UNITED STATES - MAY 4: Charlie Wood, 4, of Charlottesville, Va., plays with bubbles during rally on the East Front lawn of the Capitol to oppose the House Republicans' bill to repeal and replace the Affordable Care Act on May 4, 2017. She was born 3 1/2 months earlier and her mother Rebecca, at left, holding a picture of Charlie in the hospital, fears changes to the ACA will negatively effect her care. (Photo By Tom Williams/CQ Roll Call)
Health and Human Services Secretary Tom Price speaks in the Rose Garden of the White House following the House of Representative vote on the health care bill on May 4, 2017 in Washington, DC. Following weeks of in-party feuding and mounting pressure from the White House, lawmakers voted 217 to 213 to pass a bill dismantling much of Barack Obama's Affordable Care Act and allowing US states to opt out of many of the law's key health benefit guarantees / AFP PHOTO / Mandel NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
Ivanka Trump and Jared Kushner listen to US President Donald Trump speak in the Rose Garden of the White House following the House of Representative vote on the health care bill on May 4, 2017 in Washington, D Following weeks of in-party feuding and mounting pressure from the White House, lawmakers voted 217 to 213 to pass a bill dismantling much of Barack Obama's Affordable Care Act and allowing US states to opt out of many of the law's key health benefit guarantees / AFP PHOTO / Mandel NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
UNITED STATES - MARCH 9: Speaker of the House Paul Ryan, R-Wis., conducts a presentation in the House studio of the American Health Care Act, the GOP's plan to repeal and replace the Affordable Care Act, March 9, 2017. (Photo By Tom Williams/CQ Roll Call)
WASHINGTON, DC - MARCH 07: U.S. Secretary of Health and Human Services Tom Price compares a copy of the Affordable Care Act (R) and a copy of the new House Republican health care bill (L) during the White House daily press briefing March 7, 2017 at the White House in Washington, DC. Secretary Price answered questions on the new healthcare bill during the briefing. (Photo by Alex Wong/Getty Images)
U.S. Speaker of the House Paul Ryan speaks to the media about the American Health Care Act at the Capitol in Washington, D.C., U.S. March 15, 2017. REUTERS/Aaron P. Bernstein
WASHINGTON, DC - MARCH 13: U.S. Health and Human Services Secretary Tom Price (L) and Office of Management and Budget Director Mick Mulvaney talk to reporters following the release of the Congressional Budget Office report on the proposed American Health Care Act outside the White House West Wing March 13, 2017 in Washington, DC. Price said 'We disagree strenuously' with the findings of the CBO report about the Republican's attempt to repeal and replace the Affordable Care Act, or Obamacare. (Photo by Chip Somodevilla/Getty Images)
Speaker of the House Paul Ryan speaks at a news conference about Congressional efforts to repeal and replace Obamacare, on Capitol Hill in Washington, U.S. March 9, 2017. REUTERS/Aaron P. Bernstein
WASHINGTON, DC - MARCH 10: U.S. Vice President Mike Pence (4th L) delivers remarks at the beginning of a meeting with representatives of conservative political organizations to discuss the American Health Care Act in the Indian Treaty Room in the Eisenhower Executive Office Building March 10, 2017 in Washington, DC. Pence and Health and Human Services Secretary Tom Price led the meeting that included representatives from the Cato Institute, Tea Party Patriots, the American Conservative Union, Freedom Works, the American Legislative Exchange Council and other conservative groups. (Photo by Chip Somodevilla/Getty Images)
U.S. Speaker of the House Paul Ryan speaks to the media about the American Health Care Act at the Capitol in Washington, D.C., U.S. March 15, 2017. REUTERS/Aaron P. Bernstein
WASHINGTON, DC - MARCH 10: (L-R) U.S. Vice President Mike Pence and President Donald Trump greet House of Representatives committee leaders (L-R) House Budget Committee Chairwoman Diane Black (R-TN), Energy and Commerce Committee Chairman Greg Walden (R-WA) and Education and Workforce Committee Chairwoman Virginia Foxx (R-NC) before a meeting to discuss the American Health Care Act in the Roosevelt Room at the White House March 10, 2017 in Washington, DC. The proposed legislation is the Republican attempt to repeal and replace Obamacare. (Photo by Chip Somodevilla/Getty Images)
U.S. Speaker of the House Paul Ryan speaks to the media about the American Health Care Act at the Capitol in Washington, D.C., U.S. March 15, 2017. REUTERS/Aaron P. Bernstein
U.S. Health and Human Services Secretary Tom Price speaks about efforts to repeal and replace Obamacare and the advancement of the American Health Care Act on Capitol Hill in Washington, U.S., March 17, 2017. REUTERS/Joshua Roberts
A copy of Obamacare repeal and replace recommendations (L) produced by Republicans in the U.S. House of Representatives sit next to a copy of the Affordable Care Act known as Obamacare as U.S. Health and Human Services Secretary Tom Price addresses the daily press briefing at the White House in Washington, U.S. March 7, 2017. REUTERS/Carlos Barria
(L-R) U.S. House Speaker Paul Ryan, U.S. House Majority Leader Kevin McCarthy, and U.S. Representative Greg Walden hold a news conference on the American Health Care Act on Capitol Hill in Washington, U.S. March 7, 2017. REUTERS/Eric Thayer
UNITED STATES - MARCH 14: House Minority Leader Nancy Pelosi, D-Calif., and Senate Minority Leader Charles Schumer, D-N.Y., attend a news conference in the Capitol Visitor Center to voice opposition to House Republican's health care plan, the American Health Care Act, March 14, 2017. The event featured testimony from patients and doctors who benefit from the Affordable Care Act. (Photo By Tom Williams/CQ Roll Call)
UNITED STATES - MARCH 14: From left, Dr. Alice T. Chen, Senate Minority Leader Charles Schumer, D-N.Y., Sen. Maggie Hassn, D-N.H., and House Minority Leader Nancy Pelosi, D-Calif., attend a news conference in the Capitol Visitor Center to voice opposition to House Republican's health care plan, the American Health Care Act, March 14, 2017. The event featured testimony from patients and doctors who benefit from the Affordable Care Act. (Photo By Tom Williams/CQ Roll Call)
Speaker of the House Paul Ryan speaks at a news conference about Congressional efforts to repeal and replace Obamacare, on Capitol Hill in Washington, U.S. March 9, 2017. REUTERS/Aaron P. Bernstein
WASHINGTON, DC - MARCH 08: House Energy and Commerce Committee staff members work during a markup hearing on the proposed American Health Care Act, the Republican attempt to repeal and replace Obamacare, in the Rayburn House Office Building on Capitol Hill March 8, 2017 in Washington, DC. House Republicans were rushing the legislation through the powerful Energy and Commerce, and Ways and Means committees, aiming for a full House vote next week. (Photo by Chip Somodevilla/Getty Images)
WASHINGTON, DC - MARCH 07: House Energy and Commerce Chairman Greg Walden (R-OR) (R) and House Ways and Means Chairman Kevin Brady (R-TX) (L) arrive for a news conference on the newly announced American Health Care Act at the U.S. Capitol March 7, 2017 in Washington, DC. House Republicans yesterday released details on their plan to replace the Affordable Care Act, or Obamacare, with a more conservative agenda that includes individual tax credits and grants for states replacing federal insurance subsidies. (Photo by Win McNamee/Getty Images)
White House Press Secretary Sean Spicer (L) looks on as US Secretary of Health and Human Service Tom Price (R) points to a print-out of the Affordable Care Act (ACA) and a copy of the new plan introduced to repeal and replace the ACA during the daily briefing at the White House in Washington, DC on March 7, 2017. / AFP PHOTO / JIM WATSON (Photo credit should read JIM WATSON/AFP/Getty Images)
WASHINGTON, DC - MARCH 07: House Ways and Means Chairman Kevin Brady (R-TX) (L) and House Energy and Commerce Chairman Greg Walden (R-OR) (R) answer questions during a news conference on the newly announced American Health Care Act at the U.S. Capitol March 7, 2017 in Washington, DC. House Republicans yesterday released details on their plan to replace the Affordable Care Act, or Obamacare, with a more conservative agenda that includes individual tax credits and grants for states replacing federal insurance subsidies. (Photo by Win McNamee/Getty Images)
UNITED STATES - MAY 4: Protesters yell 'shame'' to members of Congress on the East Front of the Capitol after the House passed the Republicans' bill to repeal and replace the Affordable Care Act on May 4, 2017. The protesters support the ACA. (Photo By Tom Williams/CQ Roll Call)
WASHINGTON, DC - MAY 04: U.S. Sen. Bernie Sanders (I-VT) speaks during a Stop 'Trumpcare' rally May 4, 2017 in front of the Capitol in Washington, DC. Congressional Democrats joined activists for a rally to urge not to replace Obamacare, also known as the Affordable Care Act. (Photo by Alex Wong/Getty Images)
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The hardest hit would be older low-income Americans, especially in rural areas with more expensive health care costs, who would receive fewer subsidies to buy insurance on the individual market and who would be subject to higher premiums and out-of-pocket costs by insurers.

Perhaps the most widely shared detail in the report was an estimate that the average 64-year-old making $26,500 would pay an additional $12,900 in premiums every year to purchase insurance that would provide fewer benefits than under Obamacare.

Of the coverage losses, 14 million would have come from Medicaid: The bill would have restructured the program to cap the amount states can get per beneficiary and reduced its funding by $839 billion. These cuts are still in the new version.

The CBO findings became a key driver of opposition to the bill, both from advocacy groups representing patients, seniors, and the medical industry, and from lawmakers across the political spectrum. Conservatives complained the bill didn't lower premiums enough because it left too many Obamacare rules in place. Moderate Republicans complained it kicked millions off insurance and didn't provide enough federal aid to low-income Americans.

What the CBO is looking at now

After the first bill went nowhere, House Republicans and the White House negotiated a new one and passed it in May. While it shares much in common with the first version, there are some major changes that the CBO has to consider.

The biggest shift was a series of provisions backed by the conservative House Freedom Caucus that allow states to opt out of Obamacare regulations on insurance.

Under current law, insurers can only sell plans that cover certain "essential health benefits," such as prescription drugs and maternity care. The new bill would allow states to opt out of these requirements, which would mean insurers could sell less comprehensive care.

RELATED: A look at the Senate's all-male health care working group

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U.S. Senator Tom Cotton (R-AR) (L) and Senator David Perdue (R-GA) (R) unveil legislation aimed at curbing legal immigration by halving the number of legal immigrants admitted into the United States, at the U.S. Capitol in Washington, U.S. February 7, 2017. REUTERS/Jonathan Ernst
U.S. Senator Cory Gardner (R-CO) smiles after he was ceremonially sworn-in by Vice President Joseph Biden in the Old Senate Chamber on Capitol Hill in Washington January 6, 2015. REUTERS/Larry Downing (UNITED STATES - Tags: POLITICS HEADSHOT)
U.S. Senate Majority Leader Mitch McConnell (R-KY) speaks during a media briefing on Capitol Hill in Washington, U.S. April 25, 2017. REUTERS/Joshua Roberts
U.S. Senator Rob Portman (R-OH) speaks during a session called "The New Congress" at the Wall Street Journal's CEO Council meeting in Washington December 2, 2014. REUTERS/Kevin Lamarque/File Photo
U.S. Senator Pat Toomey (R-PA) speaks to the 38th annual Conservative Political Action Conference meeting in Washington DC, U.S. February 10, 2011. REUTERS/Larry Downing/File Photo
U.S. Senator John Thune addresses the media during the 2017 "Congress of Tomorrow" Joint Republican Issues Conference in Philadelphia, Pennsylvania, U.S. January 25, 2017. REUTERS/Mark Makela
U.S. Senator John Cornyn (R-TX)questions Supreme Court nominee judge Neil Gorsuch during a Senate Judiciary Committee confirmation hearing on Capitol Hill in Washington March 21, 2017. REUTERS/Joshua Roberts
Senator Ted Cruz (R-TX) questions Supreme Court nominee judge Neil Gorsuch during his Senate Judiciary Committee confirmation hearing on Capitol Hill in Washington March 21, 2017. REUTERS/Joshua Roberts
Chairman of the Senate Health, Education, Labor and Pensions Committee Lamar Alexander speaks during Rep. Tom Price's (R-GA) nomination hearing to be Health and Human Services secretary in Washington, U.S., January 18, 2017. REUTERS/Joshua Roberts
Senator Orrin Hatch (R-UT) during the second day of confirmation hearings on Senator Jeff Sessions (R-AL) nomination to be U.S. attorney general in Washington, U.S. January 11, 2017. REUTERS/Joshua Roberts
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The bill, backed by House Speaker Paul Ryan, also does away with certain protections for consumers with pre-existing conditions. Under current law, insurance companies are not allowed to charge sick people more than healthy people for the same coverage. The new version would allow states to opt out of that requirement as well, while providing funding for "high risk pools" to cover people whose conditions make their premiums unaffordable.

Conservatives hailed the moves as a way to bring down premiums by allowing insurers to sell less generous plans. But the changes also prompted fierce criticism from health advocacy groups, who warned they would allow insurers to cherry-pick healthy customers into cheap plans while older and sicker customers would be unable to find affordable coverage. Health policy experts also argue that the funding for high risk pools is well below the levels they would need to function.

The CBO report will provide the most rigorous estimate yet as to how these complicated and contrasting effects might play out.

An analysis that finds the bill would raise health care costs or eliminate coverage for millions of Americans, as the previous report did, would give major ammunition to efforts by Democrats and advocacy groups to derail the already-struggling health care plans being pushed by the White House and Republicans in Congress.

Procedural drama

There's another reason the CBO score is so important. Depending on their conclusions, House Republicans might have to revisit the bill and vote a second time on changes before the Senate can take it up.

The reason for this gets into arcane procedure. Republicans are trying to advance their bill through the budget "reconciliation" process, which allows them to pass legislation with a simple majority in the Senate — meaning, they wouldn't need any Democratic votes.

But there are rules tied to reconciliation, and one of them is that any legislation passed this way has to reduce the deficit. The first version of the AHCA that the CBO scored saved $150 billion over 10 years. House Republican leaders say they're confident the new one will pass the test, but they've held off on formally sending it to the Senate just in case.

There is a plausible case the CBO might determine that the bill increases the deficit. If CBO finds that millions of more Americans are able to obtain coverage, even if a plan that covers only limited medical expenses, then that would raise the cost of the bill because these customers would use federal tax credits to help pay their premiums.

That puts the House in an odd position. If their bill succeeds in covering significantly more people than the first one, then that means it will save less and potentially need revisions. If it fails to meaningfully expand coverage, then the CBO score will fuel the same attacks that the previous version faced after its own analysis.

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