Repealing Healthcare would Increase the Deficit and Uninsured

Congressional Republicans are committed to repealing the Healthcare law.

If they are successful, the repeal would add $145 billion to the deficit and 32 million people to the ranks of the uninsured between 2012 and 2019.

The Congressional Budget Office (CBO) has reviewed the effect of repealing the Healthcare Reform Act, at the request of John Boehner, Speaker of the House.

This law was enacted March of 2010 and its constitutionality was recently confirmed by a majority decision of the Supreme Court.

Congressional Republicans opposed the health-care Reform Act and the Supreme Court’s decision have vowed to do all they can to overturn it legislatively.

In light of this controversy, it is useful to look at what the impact of repealing the Health-care Act would be.

Brief Summary of Health Reform

The US Supreme Court’s landmark decision supported the main provisions of the Health-Care Reform Act, including the individual mandate and all other sections – with the exception of the Medicaid Expansion provision. The Act provides the following provisions:

  • Requires all citizens to purchase health insurance starting in 2014. This is referred to as the individual mandate.
  • Each state must establish a health exchange for individuals and businesses to purchase coverage.
  • Subsidies will be given to individuals if their household income falls within a particular range of the poverty line.
  • Employers with 50 or more workers will be required to provide health insurance options.
  • Nonexempt individuals and businesses that do not purchase coverage will be penalized by the Internal Revenue Service.
  • The Act imposes an excise tax on certain health insurance plans with relatively high premiums.
  • The Act reduces the growth of Medicare payment rates for most services.

The original Act provided a significant expansion of Medicaid coverage, but the Supreme Court ruled that portion unconstitutional.


Impact on the Deficit of Repealing the Act

The expanded health care coverage provision would have added a net of $780 billion in government expenditures between 2012 and 2019. Since expanded coverage would not be enforced, and the expanded Medicaid coverage was deemed unconstitutional, these activities would not add $780 billion to the deficit, if the Congress were to overturn the law.

The Medicare provision would reduce spending by $500 billion and increase revenue by $410 billion between 2012 and 2019, reducing the deficit by $915 billion. This deficit reduction benefit would not be realized if the Act were overturned.

Overall, the Act would reduce the deficit by $145 billion between 2012 and 2019. That reduction would not be realized if the provision were reversed.

Because of the large number of uncertainties, it is impossible to determine how repealing the Act would affect the cost of premiums to individuals and small companies.

Impact of People

If the Act were overturned, 32 million additional non-elderly people would not have health insurance between 1212 and 1219. This would bring the total uninsured to 54 million.

Under the current law, 94% of the population would be covered. If the law were repealed, only 83% would be covered.

Overall, repealing the law would add $145 billion to the deficit and 32 million people to the ranks of the uninsured between 2012 and 2019.