The Congressional Budget Office has some bad news for Obamacare repealers

The Congressional Budget Office has stepped into the Obamacare repeal fight, issuing a fierce warning to Republicans in the form of … a sternly worded blog post.

CBO is the government’s nonpartisan scorekeeper, the agency that tells Congress how much new programs cost and who they’ll cover. Their analysts will estimate how many people get insurance under any Republican replacement plan.

And CBO, in its new blog post, says it won’t let Republicans count especially skimpy coverage as health insurance. They argue that health insurance needs to provide “financial protection against high medical costs” for CBO to count the people who buy it as covered.

This is important, because in principle you could provide insurance coverage to everyone while spending practically nothing if you were willing to make the insurance totally worthless. Imagine a government program offering everyone a government-run insurance plan with a $1 million deductible, 85 percent copays, and no coverage of preventative care. You could say that’s a health insurance plan — just a really terrible one.

That’s an extreme example, of course, but one frequent Republican complaint about the Affordable Care Act is that the law mandates an excessively generous benefits package. This drives up premiums, they argue, and scares off some healthy and young enrollees who want to buy a skimpier plan.

Most Republican replacement plans aim to change this by repealing the Obamacare’s “essential health benefits” provision, which mandates that all insurers cover a set of 10 different types of care including maternity services and pediatric care. The House GOP’s “Better Way” plan would allow insurers to cut whatever benefits they no longer want to cover — a move that will likely benefit healthy people, who generally want less robust coverage.

Most Republican plans also allow insurance plans to set annual and lifetime limits on how much they’ll pay out for medical care, a practice that the Affordable Care Act outlawed. Before the health care law, there were some “mini-med” plans that would cap annual health benefits at $5,000 — an amount you can easily blow through after a few days in the hospital.

These changes, taken together, get rid of a lot of definitions Obamacare set up for health insurance. They will near certainly drive down the cost of insurance, but it’s important to keep in mind: These are not the same plans currently offered under Obamacare. Enrollees will pay less but also get fewer benefits. Comparing premiums for the two is a bit like comparing the coach seats on an airplane to first class ones — or, for especially skimpy plans, getting strapped to the plane’s wing.

CBO says, in this memo, that it’s not going to consider these things to be the same: It won’t count a plan that doesn’t really insure against the high cost of medical bills as health insurance. This is the key sentence:

If there were no clear definition of what type of insurance product people could use their tax credit to purchase, everyone who received the tax credit would have access to some limited set of health care services, at a minimum, but not everyone would have insurance coverage that offered financial protection against a high-cost or catastrophic medical event; CBO and JCT would not count those people with limited health benefits as having coverage.

CBO doesn’t go as far in its blog post to outline what does count as “financial protection.” Mini-med plans with annual limits of $5,000 likely would not fit the CBO’s definition, but what about a plan that sets a higher annual limit, above $100,000 or so? Is that enough financial protection? Will plans that offer fewer benefits, those that decide to exclude maternity care, for example, count?

We don’t quite know yet. But we do know that CBO is kicking off this discussion, and telling Republicans that some plans that could be offered under their proposals might not count as coverage in their eyes.

Asked to comment on the CBO blog post, AshLee Strong, a spokeswoman for House Speaker Paul Ryan (R-WI) said “Congressional leaders are working hand-in-glove with the incoming administration to lower health care costs and put families back in charge of choosing what kind of coverage best fits their needs. We will share more on our plans in the near future.”