CBO Largely Uncertain of the Full Economic Effects of Repealing the ACA

Since the Affordable Care Act (ACA) became law in 2010, there are have been numerous attempts at repealing part or all of the law, including recent proposals by House and Senate Republicans to temporarily extend subsidies for Americans on the federally facilitated marketplace if the Supreme Court rules in favor of the plaintiffs in King v. Burwell while dismantling other parts of the ACA.

A new report from the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) has revealed that successfully repealing the law would have major budgetary and economic consequences. At least, they think so.

The report makes a point to emphasize multiple times that the estimates are all subject to “substantial uncertainty.”

“Because the ACA was a large, complex piece of legislation, estimating the effects of its repeal also is complicated, although the degree of difficulty varies somewhat depending on the provision,” according to the report.

For instance, the effect is easy to estimate with regard to provisions that created new flows of funds, but is more difficult for the provisions that modified existing programs or affected spending or revenues indirectly.

Overall, though, the report estimates that repealing the ACA would increase the federal budget deficits by $137 billion from 2016 to 2025. CBO and JCT came to this estimate by taking into account the fact that repealing the ACA would raise economic output to reduce federal deficits by $216 billion, but would still increase the deficit by $353 billion.

“A repeal would reduce deficits during the first half of the decade but would increase them by steadily rising amounts from 2021 to 2025,” according to the report.

Furthermore, the number of people who are uninsured would increase by 19 million in 2016; by at least 22 million in 2017, 2018, and 2019; and by 24 million from 2019 to 2025. Over the period of 2021 to 2015, roughly 14 million fewer people would be enrolled in Medicaid; 18 million fewer people would have nongroup coverage. However, 8 million more people would have employment-based coverage.

“If the ACA was repealed, many people would obtain their coverage from a source that differs from current projections, and many others who are projected to retain or gain insurance coverage in the future would instead be uninsured,” according to the report.