Ahead of a much-anticipated Supreme Court ruling and just as the 2016 presidential race is kicking into gear, the Congressional Budget Office has weighed in on the costs and/or benefits of repealing Obamacare.
The CBO released on Friday its report on the budgetary and fiscal impact of repealing the Affordable Care Act of 2010, shorthanded as Obamacare. It determined that on balance, getting rid of Obamacare would raise budget deficits from 2016 to 2025 by $353 billion under traditional measurement, and $137 billion by a measure that presumes economic benefits.
Congressional Republicans that seek to repeal the sweeping revamp of healthcare viewed the second number as a victory. That’s because the more traditional read of budget impact that excludes any estimate of economic effects puts the repeal costs at $353 billion over the 10-year period.
The CBO report offered a separate analysis that includes what economists called “macroeconomic feedback.” It’s a fancy way of saying that when the presumed economic effects are calculated, the repeal would actually increase annual growth to gross domestic product, the sum of U.S. goods and services, by 0.7 percent.
The bump in growth would come from boosting the supply of labor, on the assumption that some employers may be holding off on hiring because they don’t want to provide insurance. And the presumed resulting tax revenue from more hiring would shave the $353 billion in additional deficits by $216 billion, for the smaller total of $137 billion over 10 years.
“This law acts as an anchor on our economy by dragging down employment and reducing labor force participation,” Senate Budget Committee Chairman Mike Enzi, R-Wyoming, said in a statement.
The CBO, with its new Republican-appointed director Keith Hall, was far more cautious about jumping to those kinds of conclusions.
“For many reasons, the budgetary and economic effects or repealing ACA could differ substantially in either direction from the central estimates presented in this report,” the report cautioned, adding that uncertainty is “sufficiently great” and that repeal could even “increase deficits by a substantially larger margin” than anticipated.
Democrats pointed to the 16 million people who now have insurance who might otherwise be uninsured, and suggested there are other ways to view success.
“Insurance companies can no longer deny coverage or discriminate against individuals based on pre-existing health conditions,” Rep. Chris Van Hollen, D-Md., the top Democrat on the House Budget Committee, said in a statement. “According to CBO’s analysis, repealing the law would add 19 million people in America to the ranks of the uninsured in 2016, rising to 24 million by 2021.”
The detailed report from the nonpartisan CBO was requested by Enzi. It came days before the Supreme Court is expected to decide whether the Obama administration has violated the law by giving healthcare subsidies to residents of 34 states that never set up their own health insurance marketplaces, or, as the administration insists, the law’s intent was to provide subsidies in all 50 states.
Comments