CBO: Repealing Obamacare Would Leave 19 Million Uninsured; Raise Federal Deficit

The Congressional Budget Office released a new estimate on the effects of repealing the Affordable Care Act.

Sisters and Tea Party members of Atlanta, Georgia, Judy Burel (L) and Janis Haddon (R), protest the Obamacare in front of the U.S. Supreme Court March 27, 2012 in Washington, DC. 
National Journal
Dylan Scott
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Dylan Scott
June 19, 2015, 7:43 a.m.

Re­peal­ing the Af­ford­able Care Act would in­crease the fed­er­al de­fi­cit by $137 bil­lion or more over the next 10 years and would in­crease the num­ber of un­in­sured Amer­ic­ans by 19 mil­lion in 2016, ac­cord­ing to a new re­port from the Con­gres­sion­al Budget Of­fice.

The pro­jec­tions are the first of­fi­cial score of full Obama­care re­peal since 2012 and come as the Su­preme Court weighs the King v. Bur­well case, which could sub­stan­tially hinder the health care law by lim­it­ing fed­er­al sub­sidies in 34 states. Some con­gres­sion­al Re­pub­lic­ans have ad­voc­ated re­peal­ing the law if the Court rules as they hope it does; such a de­cision would in­val­id­ate the law’s sub­sidies for more than 6 mil­lion people, put­ting their health in­sur­ance at risk.

Should Obama­care be re­pealed, CBO es­tim­ates that 20 mil­lion would lose in­sur­ance when Obama­care’s ex­changes close and 8 mil­lion would lose Medi­caid cov­er­age. But about 6 mil­lion people would pick up em­ploy­er cov­er­age and 4 mil­lion would buy in­di­vidu­al plans, leav­ing a net ef­fect of 19 mil­lion people los­ing in­sur­ance.

The im­pact in­creases in later years, with about 50 mil­lion noneld­erly Amer­ic­ans be­ing un­in­sured start­ing in 2020 and on­ward. CBO es­tim­ated earli­er this year that there are 35 mil­lion un­in­sured Amer­ic­ans in 2015 and the num­ber would drop to 24 mil­lion by 2020 un­der the ACA.

The new CBO score as­sumes that the ACA’s re­peal would take ef­fect on Janu­ary 1, 2016, but does not ac­count for any al­tern­at­ive health care policy be­ing passed in its place. The es­tim­ates are also the first since Re­pub­lic­ans took over Con­gress and in­stalled a new CBO dir­ect­or, Keith Hall, a vet­er­an of the George W. Bush ad­min­is­tra­tion. The CBO has also be­gun to in­cor­por­ate so-called “dy­nam­ic scor­ing,” which tries to meas­ure the lar­ger eco­nom­ic ef­fects of the policy changes the agency is eval­u­at­ing.

Us­ing dy­nam­ic scor­ing, CBO es­tim­ated that the fed­er­al de­fi­cit would in­crease by $137 bil­lion over the next 10 years. The agency pro­jec­ted that the largest eco­nom­ic ef­fect would be more people work­ing and there­fore more tax­able in­come, which would help off­set the in­crease to the de­fi­cit. Re­peal­ing some of the law’s taxes would also in­crease in­cent­ives to save and in­vest, CBO said, which would lead to a great­er eco­nom­ic out­put.

The agency did ac­know­ledge that dy­nam­ic scor­ing is highly un­cer­tain. Without it, the es­tim­ate de­fi­cit in­crease would be $353 bil­lion. In both cases, the de­fi­cit would ini­tially dip after re­peal be­fore in­creas­ing in the later years.

Those are both high­er num­bers than the 2012 es­tim­ate, which pro­jec­ted a $109 bil­lion rise in the de­fi­cit from 2013 to 2022.

“Most of the dif­fer­ence between that earli­er es­tim­ate and the cur­rent one stems from a shift in the budget win­dow to en­com­pass later years—in which re­peal­ing the ACA is es­tim­ated to in­crease budget de­fi­cits sharply,” the CBO ex­plained.

The agency also em­phas­ized that the over­all ef­fect is dif­fi­cult to pro­ject, giv­ing the com­plex­ity of the law and the dif­fi­culty pro­ject­ing eco­nom­ic ef­fects so far in­to the fu­ture.

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