Regulations

ACA Repeal Would Cost $353 Billion, Says CBO

By Robert Sheen | June 24, 2015

A repeal of the Affordable Care Act would increase the federal deficit by $353 billionbudget_deficit-150x100-1.jpg over the next 10 years, according to a report by the Congressional Budget Office and the staff of the Joint Committee on Taxation .

Repealing the ACA would also increase the number of people without health insurance by about 19 million in 2016, rising to about 24 million in 2020 and afterward, according to the CBO. It that about 8 million more people would have employment-based insurance, while those with individual policies would decline by up to 32 million.

Including the budgetary effects of “macroeconomic feedback,” such as the increased supply of labor in the economy, the increase in the deficit resulting from repeal of the ACA would be $137 billion over the 10-year period , the CBO and JCT estimate.

“For many reasons, the budgetary and economic effects of repealing the ACA could differ substantially in either direction,” the report acknowledges. These uncertainties are so great that repeal could actually reduce deficits, or increase it much more than the report predicts.

Repeal would end ACA’s subsidies for health insurance , saving the government $1.66 trillion over the decade. These savings would be partially offset by eliminating some provisions in the law that are projected to reduce deficits, including the employer and individual mandate and the “Cadillac” tax on high-premium plans .

The ACA also includes provisions that reduce federal spending on Medicare and hospital payments; repeal would increase federal spending by $879 billion over the next decade. Ending the ’s HospitalInsurance payroll tax on high-income taxpayers would reduce revenues by $631 billion over the period.

The macroeconomic effects of repeal include a slight increase in labor supply, as those unable to obtain individual insurance would return to work in order to gain employer-supplied coverage. But “the effects would be muted” because the labor supply is already adequate for the state of the economy.

Forecasting the effects of repeal is uncertain, the report noted, because “the ways in which individuals, employers, states, insurers, doctors, hospitals, and other affected parties will respond to the changes made by the ACA— and the ways in which those same people and organizations would respond to its repeal — are all difficult to predict."

Posted in Regulations

Topics

Popular Posts