Repealing the Patient Protection and Affordable Care Act of 2010 (PPACA) could hurt the U.S. economy in some ways and possibly help in others.
Douglas Elmendorf, director of the Congressional Budget Office (CBO), today delivered that assessment in written testimony prepared for the Senate Budget Committee.
Elmendorf testified at hearing on the economic outlook for 2012 and 2013.
Elmendorf acknowledged that some want to change U.S. health policy by repealing PPACA.
“CBO has not estimated the effects of such actions on the economy over the next two years,” Elmendorf says in the written testimony. “Such an analysis would be difficult and highly speculative because many of the provisions of that legislation will not go into effect until 2014, and so, much of the legislation’s economic impact in the next two years will stem from businesses’ and people’s expectations and uncertainty about what will happen if and when the legislation is fully implemented.”
Some provisions in the act could increase demand for health care services by expanding the number of people with health coverage, but others could cut Medicare payment rates for some health care services, Elmendorf says.
Coverage expansion could increase spending on health care, but the Medicare reimbursement cuts could reduce the incentives for individuals and companies to make some kinds of health care industry investments, Elmendorf says.
“Whether the net effect of those aspects of the legislation is higher or lower investment in the health care industry during the next few years is unclear, and therefore whether repealing or modifying the legislation would raise or lower such investment in the near term is unclear as well,” Elmendorf says.