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CBO: Repealing PPACA would cost $353 billion over next decade

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(Bloomberg) — Repealing the Patient Protection and Affordable Care Act (PPACA) would increase the federal budget deficit by $353 billion over the next decade, the Congressional Budget Office (CBO) said.

Ending PPACA would raise spending on Medicare while reducing outlays for health insurance subsidies, Medicaid and coverage for poor children, the agency said in a report Friday. Repealing the law would probably boost the economy as more people sought work to get health insurance, reducing the net cost to $137 billion, the CBO said.

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The report is a blow for Republican lawmakers who have sought to repeal and replace PPACA ever since its passage in 2010. If the law were undone, about 19 million more people would become uninsured next year, rising to 24 million by 2020, the CBO said.

“It does make it a lot harder to repeal the law all at once,” said Loren Adler, research director at the Committee for a Responsible Federal Budget, a nonprofit that advocates for lower national debt. Still, “you could build a partial repeal that would reduce the deficit,” he said.

The Senate Budget Committee Chairman, Wyoming Republican Mike Enzi, who requested the report, highlighted the budget office’s finding that employment would grow if the law were repealed.

“This law acts as an anchor on our economy by dragging down employment and reducing labor force participation,” he said in a statement. “As a result, the deficit reduction that the Democrats promised when it was enacted is substantially unclear.”

Congressional Republicans replaced the former director of the CBO, Douglas Elmendorf, earlier this year with Keith Hall, a former official under President George W. Bush. Elmendorf, who had been appointed to the budget office by Democrats, estimated in July 2012 that repealing PPACA would cost about $109 billion through 2022, without including broader effects on the economy.

Prod Republicans

Eliminating subsidies that discount premiums for people purchasing health insurance through government-run marketplaces would eliminate $822 billion in spending over 10 years, the report said. That key provision of the law is the subject of a Supreme Court case, King v. Burwell, that’s expected to be resolved by the end of June. A ruling against the government would eliminate subsidies for more than 6 million people who enroll using the federal public exchange system.

Friday’s report may prod Republican presidential candidates and other politicians to create more concrete plans to repeal and replace PPACA, said Robert Blendon, a health-policy professor at Harvard University. They’ll have to show their proposals don’t increase the deficit, he said.

“It’s going to put even more pressure on Republicans to be specific about what your alternative is,” Blendon said. “The deficit issue has to be front and center.”

See also: PPACA subsidies to continue after court ruling, senators say

Taxes that would be eliminated by repealing the law include increased levies on the wealthy and fees on insurers and medical-device makers. PPACA’s tax on costly health plans, scheduled to begin in 2018, would also disappear.

—With assistance from Erik Wasson in Washington.


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