Repealing the Affordable Care Act would increase the federal deficit by at least $137 billion over the next decade and swell the ranks of the uninsured by an additional 19 million in 2016, according to a report from the Congressional Budget Office (CBO) released on Friday.
The CBO’s new estimates are noteworthy for a couple of different reasons. First of all, it’s the first time the nonpartisan agency has attempted to estimate the cost of repealing Obamacare since its major coverage provisions took effect in 2014, after which millions of Americans gained coverage under the law. On top of that, it’s the best evidence yet that — even when all of the elements are stacked in favor of Obamacare opponents — there still isn’t any proof that the economy would be dramatically better off without the landmark health care reform policy.
According to CBO researchers, repealing the law in its entirety would generate some cost savings. Specifically, the government would no longer have to pay for the expansion of Medicaid to additional low-income Americans or the cost of tax subsidies to help Americans purchase plans on the state-level marketplaces, which would save an estimated $1.66 trillion over the next decade. Removing insurance subsidies may also spur some low-wage workers to take on additional hours, which CBO estimates could boost national output by 0.7 percent between 2012 and 2025.
But the agency still considers repeal to be a “net negative” for the federal deficit, because — in addition to significantly increasing the number of uninsured Americans — it would eliminate the law’s taxes and cuts to the Medicare program.
CBO’s conclusion is likely not quite what GOP lawmakers were hoping for, particularly after taking several steps to nudge the research in their favor. Significantly, the new CBO report is the first major policy analysis released under Keith Hall, a former staff economist under George W. Bush who was selected by Congressional Republicans to lead the agency.
Last summer, the CBO announced it would stop scoring Obamacare; at that point, multiple CBO reports had turned up similar findings, and it was getting too hard to accurately assess a law that had largely taken effect and had already reshaped the insurance market in significant ways. But Republicans didn’t want to let it drop. In February, Republicans ousted Douglas Elmendorf, the sitting director of the CBO — a controversial move that came after many GOP lawmakers complained about how Elmendorf was assessing the economic impact of the health law.
Republicans wanted the CBO to use what’s known as “dynamic scoring” to calculate the effect of repealing the ACA. “Dynamic scoring” is the idea that assessing policy changes should include a broader look at macroeconomic consequences. Critics of this approach say that dynamic scoring produces uncertain estimates that can easily be manipulated to support the Republican Party’s goals of cutting taxes for the rich. Democratic lawmakers have complained that scoring policies in this way amounts to “smoke-and-mirrors budget gimmicks.”
Shortly before tapping Hall to lead the budget agency, the GOP-controlled Congress mandated that all major legislation should be assessed with dynamic scoring.
So Friday’s report — which was requested by Senate Budget Chair Mike Enzi (R-WY) — represents a GOP-commissioned analysis that was overseen by GOP-appointed economist who was employing GOP-endorsed math. Nonetheless, it still found that repealing Obamacare would add a hefty $137 billion to the budget over the next ten years. Without using dynamic scoring, meanwhile, that number rises to $353 billion over the same time period.
Still, Obamacare opponents are highlighting the aspects of the report that suggest low-wage workers would work additional hours if the law’s subsidies were repealed. “CBO has determined what many in Congress have known all along,” Enzi said in a statement. “This law acts as an anchor on our economy by dragging down employment and reducing labor-force participation.”