Health-Law Repeal Would Deepen Deficit, CBO Estimates

Health-Law Repeal Would Deepen Deficit, CBO Estimates
House Speaker John Boehner swears in the 112th session of Congress Jan. 5. Photographer: Joshua Roberts/Bloomberg

A repeal of the U.S. health-care law would deepen the federal budget deficit by $145 billion from 2012 to 2019, according to Congressional Budget Office estimates that Republicans immediately challenged.

Individual insurance premiums would be “somewhat lower” than under the current law, while coverage obtained through large employers would cost “slightly” more should the law be scrapped, the CBO, the accounting arm of Congress, said in a preliminary analysis released today.

The Republican-controlled U.S. House has scheduled a Jan. 12 vote to repeal the measure President Barack Obama signed last March, and members of the Democrat-controlled Senate haven’t indicated a repeal would pass that chamber. Republican leaders have criticized the CBO for failing to work in a non-partisan manner and disputed that a repeal would deepen the deficit.

“CBO is entitled to their opinion,” House Speaker John Boehner, an Ohio Republican, told reporters. The health-care law “will not save the kind of money that was predicted.”

The overhaul is projected to cost $938 billion during 10 years while resulting in a reduction in the annual budget deficit by slowing the growth in spending on health care, according to the CBO. Repealing the legislation would deepen the deficit by $230 billion through 2021, two years beyond the original estimate of the health law, the CBO found.

Other Republicans challenged projections that the overhaul will lower health costs and shrink the deficit.

Projections Challenges

“Washington, D.C., may be the only place in the country where people believe that not spending a trillion dollars and not massively expanding the size and scope of government health care will increase the deficit,” said Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell, a Kentucky Republican.

While repealing the health law would result in reduced insurance premiums on average in the individual market, “many people would end up paying more for health insurance,” according to the CBO. The overhaul provides subsidies to help consumers in the individual market buy coverage, a benefit that repealing the law would eliminate, the office said.

The CBO said it’s unsure whether premiums for coverage obtained through small employers would cost slightly more or less because of uncertainty about the effects of the health law on that market.

‘Republican NoCare Agenda’

A repeal would also eliminate the expansion nationwide of coverage for the uninsured. The health law aims to cover 94 percent of legal non-elderly residents, compared with 83 percent coverage currently. Thirty-two million fewer nonelderly people would have coverage in 2019 under a repeal, leaving 54 million non-elderly uninsured, CBO said.

“The Republican NoCare agenda should come with a Surgeon General’s warning: Dangerous to Your Health,” Representative Pete Stark, a California Democrat, said in a statement. “If Republicans are successful, millions of Americans become uninsured, millions pay more than they should for their health benefits, and our deficit balloons.”

The CBO said it may not complete a detailed estimate until later this month.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE