Would Abolishing ObamaCare Increase the Deficit?

In a letter to John Boehner today, the Congressional Budget Office estimates that abolishing the Affordable Care Act would increase the deficit by $109 billion over the next ten years. Is this estimate credible? The CBO is required to assume the ACA is implemented the way the law is written. But the law requires $523 billion in cuts to Medicare. These are cuts that the Office of the Medicare actuaries say will cause one in seven hospitals to close by the end of the decade and will keep seniors from having reasonable access to physicians. This outcome is so unbelievable that the CBO has published an “alternative report” showing much higher Medicare spending and the Medicare Actuaries Office not only publishes an “alternative report,” they are now including the alternative report in the official report official report.

Comments (9)

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  1. Tom H. says:

    Good thinking.

  2. Ambrose Lee says:

    But of course, alternative reports don’t make headlines – unrealistic ones do.

  3. Ken says:

    It’s a real stretch to think that Obmama Care reduces the deficit and that abolishing it would increase the deificit.

  4. david says:

    Then it still remains that repealing ObamaCare will increase the deficit by $109 billion.

    Restoring cuts to Medicare is a separate issue. Clinton financed his “balanced budget” by raising taxes on the rich (though he mitigated it with NAFTA and cutting welfare). Bush restoring those tax cuts was a separate issue, and the fact remains that the ACA decreases the deficit, just like Clinton’s budget reforms. The difference here is that the ACA insures people while Clinton’s reforms cut their wages and their safety nets.

  5. Alexis says:

    The fact that the CBO had to publish multiple reports just highlights the uncertainty surrounding the outcome of this issue. It’s hard to get an accurate, realistic understanding of the eventual outcomes when experts from both sides of aisle are coming up with vastly different results.

  6. Devon Herrick says:

    About half the cost of the PPACA is slated to be paid for by reducing payments to Medicare providers. Medicare Chief Actuary, Richard Foster, has explained that the sustainable growth formula (requiring Medicare physician fee cuts) has never been allowed to take place since automatic cuts were first triggered a decade ago. Members of Congress don’t want to withstand the wrath of angry seniors who’ve been told they need to find new doctors. Congress has repeatedly kicked this political hot potato down the road for future Congresses. CBO estimates that assume Medicare fee cuts will reduce the cost of the PPACA are inaccurate if these Medicare fee cuts were never going to happen. Thus, the CBO (which has to assume current law will actually occur) cannot accurately score the budgetary changes from repealing the PPACA.

  7. david says:

    Maybe now there will be even more incentive to cut the SGR.

  8. Jacob Shmukler says:

    According to Douglas Holtz-Eakin, the Medicare cuts actually go even further now than the $523 billion that was estimated when the law passed. They’re up over 40% to $741 billion. DHE also makes the point that $95 out of the $109 billion are “off-budget” savings, which he says is “CBO parlance for Social Security taxes.” He continues: “Put differently, the ACA is budgetarily ‘sound’ only because of higher taxes — no health-care savings in sight.”


  9. Chuck Miller says:

    As I recall, the “cuts” to Medicare are mainly ending the subsidies for Medicare Advantage. If the private plans are better than standard Medicare, let people pay the difference.