A report from the Congressional Budget Office released on Friday states that repealing 2010’s Affordable Care Act would add $137 billion to the U.S. budget deficit throughout 2025, while also leaving more than 24 million Americans with no health insurance by 2020.
This announcement comes as the push for repeal in Congress becomes more and more intense, with many republican congressmen backing such a measure. The budget office is an independent office which provides estimates and projections of the financial impact of proposed laws.
The deficit will happen even though this time the measurement was done using a method backed by many republicans called dynamic scoring, which attempts to estimate the secondary effects which a certain law would have on the country’s economy, besides direct funding. Though criticized for providing uncertain results, many republicans pushed for an analysis with this method in hopes that it would prove a repeal act to be viable.
However, the budget office report states that despite the money saved by terminating federal funding for insurance of low-income citizens, the losses from the additional taxes and Medicare-related cuts which would also be negated by a repeal would prove to be a bigger hit to the budget.
The direct impact of a repeal would actually have the deficit grow up to more than $350 billion in 2025, but secondary effects – such as the fact eliminating federal assistance would make more Americans remain or join the workforce to pay for their insurance, which would bring in more taxes – would level it to about $137 billion. This would also boost the economy by 0.7 percent yearly for a period, due to the same rise in workforce and working hours factors.
Unfortunately for repeal enthusiasts, this would not be enough to offset the budget deficit, with lawmakers now forced to find other possible sources of income to cover it. Particularly, the excise tax for high-cost insurance plans would be hard to replace in the funds it brings.
The budget office’s conclusion in the report was that Obamacare has become too embellished into the medical and health care systems for it to be repealed without negative consequences. This is because most of the provisions of the 2010 act have already taken full effect and eliminating them would complicate matters even more. However, it is unlikely that Republicans will abandon plans for repealing the act, as they consider that it actively affects the U.S. economy by slowing down employment and labor force participation.
Image Source: The Yucatan Times
