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We still don't know how much Trumpcare will cost

Demonstrators protest over the repeal and replacement of Obamacare outside the offices of Republican congressman Darryl Issa in Vista, California, U.S., March 7, 2017. REUTERS/Mike Blake

House Republicans this week unveiled their repeal of the Affordable Care Act, or Obamacare, killing a key mandate that most Americans buy health insurance or pay a penalty.

The bill, called the “American Health Care Act,” has President Donald Trump’s support but has been dubbed “Obamacare lite” by Republicans who are upset that it retains several of the Affordable Care Act’s popular provisions.

However, there’s no way to know how Trumpcare, as it will inevitably be called, will compare to Obamacare in terms of cost. That’s because the Congressional Budget Office hasn’t scored the bill, and GOP aides involved in drafting the legislation told the Washington Post that two committees that oversee the bill are ready to advance it without a CBO score.

Whether that will be necessary is unclear. On Monday, Bloomberg reported that the CBO Director Keith Hall said the Office had begun analysis though it’s not clear when the analysis will be released. In the meantime, the bill’s backers are supporting it without looking at the price tag or knowing how many people will be covered.

On Twitter, Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, argued that lawmakers should not support a bill without knowing its cost: “Need to see CBO score. Lawmakers should not support a bill without seeing the score.”

House Ways and Means Chairman Kevin Brady (L) holds a copy of the newly written American Health Care Act while answering questions during a news conference at the U.S. Capitol March 7, 2017 in Washington, DC. Photo by Win McNamee/Getty Images

Here’s what we do know about costs

Still, some idea of cost is possible to ascertain indirectly, especially considering the bill would repeal taxes imposed by the ACA such as a 3.8% tax on capital gains and a 0.9% tax on income for Medicare. Just repealing these and other ACA taxes would cost $600 billion through 2026, according to an estimate from Congress’ Joint Committee on Taxation.

Looking at these numbers, Committee for a Responsible Federal Budget noted that the Joint Committee on Taxation’s cost numbers will depress the Medicare trust fund and likely leave far fewer funds to handle coverage.

With the revenue-generating portions killed, looking at the other side—the expenditures—helps shed light on the monetary costs.

The mandate that requires most Americans to be insured or face a tax penalty is gone, but still exists more or less under another name. To encourage coverage to get insurance, the ACHA would let insurers increase premiums up to 30% if people let their insurance lapse.

It also allows for people with preexisting conditions to get insurance. This may lead to premium spikes, since the pools will be needier as healthy people have less incentive to sign up. To stabilize these pools, the AHCA allocates $110 billion to states; $15 billion will be injected in 2018 and 2019, and $10 billion each year until 2026. But this allocation could fall far short of what’s needed to stabilize high risk pools. According to the Commonwealth fund, stabilizing high-risk pools would cost $178 billion each year.

Other things may make the AHCA more expensive. Though people under 26 can stay on their parents’ health insurance plans, employers will not have to provide health insurance to employees, pushing more people toward the ACHA system.

Health insurance subsidies will continue, despite the lack of taxes, and will be based on age instead of income, effective in 2020. They will increase with age, but the program would benefit younger and healthier people as older people will be able to be charged five times more than younger people. Individuals making over $75,000 would see phaseouts of credits. According to the Kaiser Family Foundation, the average credit would fall 36% from $4,615 to $2,957.

How Trumpcare might lower costs

On the cost-lowering side, the new law would curb Medicaid expansion and expire expansion altogether by 2020. The program would also cap funding to states for Medicare, a process known as “block granting,” which differs from its current policy of providing the states what they need. Funds paid to Planned Parenthood would stop, as the new law would ban federal funds for public health organizations that provide abortions.

In terms of the amount of people who would lose insurance, the Commonwealth Fund has some analysis based on its biennial survey in lieu of CBO numbers. Millions of people attained coverage through Medicaid, but would likely be locked out in greater amounts by AHCA. If a worker’s wages were under the income threshold of about $14,600, they would be eligible for Medicare. But if they made more than that, they would lose their health insurance. And by having a continuous coverage provision, getting it back would be more expensive, the Fund notes. This disincentive works. With so many people churning in and out of Medicaid, the uninsured numbers would be in the millions.

Currently, not all Republican senators are on board, giving the bill a high chance of failure against a unified Democratic opposition. While Ted Cruz (TX) and Rand Paul (KY) view the bill like a mini-Obamacare, others such as Rob Portman (OH), Shelley Moore Capito (WV), Cory Gardner (CO), and Lisa Murkowski (AK) have protested that repealing the Medicaid expansion would not help their constituencies.

Moreover, the bill is subject to special fiscal requirements because it’s being introduced under the reconciliation process, which lets Congress consider budget resolutions without the threat of a filibuster. Reconciliation bills are subject to the “Byrd rule,” which would block them if they contribute to the deficit beyond a 10-year period.

All these headwinds may push Republicans into waiting until CBO numbers are released. And if those numbers are large in terms of cost and number of uninsured people, those headwinds will intensify.

Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, tech, and personal finance. Follow him on Twitter @ewolffmann. Got a tip? Send it to tips@yahoo-inc.com.

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