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Repealing Obamacare Will Cost the Government $350 Billion


Although Republicans may insist otherwise, repealing the Affordable Care Act will not reduce the federal deficit.

An analysis by the nonpartisan Committee for a Responsible Budget reveals that repealing the Affordable Care Act will likely cost the federal government at least $350 billion, and that doesn’t include the cost of replacing it.

"Repealing the entire ACA would leave no funds available for 'replace' legislation, and in fact would require further deficit reduction to avoid adding to the debt," the report notes.

The analysis also focuses only on the net cost to the federal government and doesn't consider the economic burden (which CNBC calls “the far bigger economic impact”) that will face insurers, hospitals, doctors, drug companies, and others in the existing health system. And of course, it doesn’t include an estimate of the financial impact on the 23 million Americans who will lose their health coverage if the ACA is repealed and not replaced.

While Kellyanne Conway, one of Trump’s senior advisors insisted Tuesday that no one who has health insurance now would permanently lose their coverage in the process, legislatures are poised to gut essential elements of the ACA immediately, even though many acknowledge it will be years before a replacement program can be put in place.

As Vox reports, Congress is set to attack ACA through what is known as the reconciliation process. Although it can only remove the parts of the act that impact the federal budget, this process would enable them to cut tax credits given to middle-income Americans to purchase coverage and repeal the expansion of Medicaid to low-income Americans. The main reason they’ll use this process instead of attempting to repeal the bill in one shot is because, legislation passed through the budget reconciliation process cannot be filibustered.

“So instead of coming up with a 60-vote majority, Republicans only need 51 votes to pass a reconciliation bill for repeal,” notes Vox's Sarah Kliff.

The Medicaid expansion has enabled many HIV-positive people who previously had no access to care to get on treatment, so its loss could dramatically impact the health of those with HIV and the fight to prevent the spread of the virus. 

Most of the program’s opponents maintain that eliminating key elements of Obamacare (subsidies for individual health insurance and expansion of Medicaid) would save up to a trillion dollars. But this new analysis points out that the ACA also includes dozens of other provisions that cut other costs and raises revenues to pay for these programs. A full repeal would actually eliminate both those savings and sources of government income.

For example, the law raised taxes to help pay for itself, but those taxes have been unpopular and lobbyists like the U.S. Chamber of Commerce and the insurance industry's trade association, American Health Insurance Plans, for example, are pushing to repeal them. But, eliminating those taxes would cost the government $800 billion over 10 years, the committee said.

Joe Antos, a health policy expert at the conservative-leaning American Enterprise Institute told NBC News that Republicans need to avoid dropping taxes on high-income earners (those who make over $200,000 a year), while eliminating lower-income people's health insurance.

"They can't afford to drop that unless they can afford to come up with that money," Antos said. "Whatever they do to replace [the ACA] they're going to need some money."

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Jacob Anderson-Minshall