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CBO: Repealing Health Reform Would Increase Deficit

A new report from the Congressional Budget Office (CBO) confirms that repealing health reform would increase the deficit.  Here are the highlights:

  • Repealing health reform (that is, the Affordable Care Act, or ACA) would increase the federal deficit by $353 billion over 2016-2025 using CBO’s traditional estimating approach, which assumes that the economy remains unchanged.
  • Using “dynamic scoring,” which incorporates estimates of how legislation would affect the size of the economy and, in turn, federal revenues and spending, repealing health reform would also increase the deficit, but by a lesser amount — $137 billion over ten years.  One reason for the smaller estimate is that repeal would somewhat increase the supply of labor (and hence tax revenue), since it would effectively force some people to work, or work more, to obtain health insurance coverage.
  • Repealing health reform would increase the deficit by larger amounts in later decades.  From 2026 to 2035, repeal would increase budget deficits by around 1 percent of gross domestic product, whether or not economic effects are included.  That’s about another $3 ½ trillion added to the debt.
  • If health reform were repealed, 19 million Americans would lose health insurance coverage in 2016.  By 2020, 24 million more people would be uninsured than under current law.
  • CBO’s estimates don’t reflect health reform’s likely contribution to the ongoing slowdown in health care spending, since that effect cannot yet be quantified.  “But to the extent that such an effect has occurred and would continue under current law,” writes CBO, “repealing the ACA would generate a larger increase in federal deficits than is estimated here.”  It also would produce benefits for the economy that the CBO report doesn’t reflect.