CBO: ACA Repeal Would Raise Federal Deficit by $137B Over a Decade
For the report, CBO analyzed the economic effects repealing the ACA could have on federal spending revenues.
CBO projected that repealing the ACA would increase the federal budget deficit by $137 billion from 2016 to 2025 (Pear, New York Times, 6/19). According to Kaiser Health News, that figure is up from CBO's 2012 estimate of $109 billion (Galewitz, Kaiser Health News, 6/19).
Further, the report noted repealing the ACA would have a larger effect in the decade following 2025. Loren Adler, research director at the Committee for a Responsible Federal Budget, said a repeal would contribute about $3.5 trillion to the federal deficit over the decade beginning in 2025 (Timiraos/Radnofsky, Wall Street Journal, 6/19).
In addition, repealing the law would increase the number of uninsured U.S. residents from 35 million to 59 million people, according to the report. Specifically:
- 18 million fewer people would have private coverage; and
- 14 million fewer people would be enrolled in Medicaid.
Meanwhile, the report predicted repealing the ACA would cause Medicare spending to increase more quickly, following a period of slow spending growth. According to the report, Medicare spending would increase by about $800 billion over the next decade if the ACA is repealed (New York Times, 6/19). However, some Republican lawmakers have indicated support for keeping the ACA's Medicare spending reductions in place even if the law is repealed (Wall Street Journal, 6/19).
Repeal Could Bolster Economy, Employer-Sponsored Coverage Numbers
Meanwhile, the report also noted that repealing the ACA would increase economic output in the country because it would provide incentives for some people to seek employment, the Times reports.
The report stated the ACA "reduce[s] the supply of labor by reducing some people's incentives to work" because the law's subsidies and Medicaid expansions "generally make it easier for some people to work less or to stop working without losing health insurance coverage." According to the report, repealing the law would reverse those factors and help to increase output of goods and services in the country, raising the U.S. gross domestic product by 0.7%.
In addition, repealing the law could lead to eight million more people having employer-sponsored health plans, according to the report (New York Times, 6/19).
ACA Repeal Would Be 'Complicated'
Overall, CBO wrote in the report that repealing "the ACA would present major challenges" since it is now enmeshed in the U.S. health care system. The report stated, "In the five years since its enactment, nearly every key provision of the law has taken effect and has been incorporated into final rules and other administrative actions. Undoing the ACA would thus be quite complicated" (AP/Modern Healthcare, 6/19).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.