The Committee for a Responsible Federal Budget (no left-wing group, it is co-chaired by Mitch Daniels and Leon Panetta) tells us what getting rid of the Affordable Care Act might entail: “According to our latest estimates, repealing the ACA in its entirety would cost roughly $350 billion through 2027 under conventional scoring and $150 billion using dynamic scoring.” The CRFB gets to that number because savings from eliminating coverage are dwarfed by removing savings elsewhere and by revenue loss. “Repealing the ACA’s coverage provisions would save $1.55 trillion through 2027, while repealing its tax increases would cost $800 billion, and repealing its Medicare (and related) cuts would cost another $1.10 trillion. Repeal would also lead to a small increase in economic growth, which could produce over $200 billion of additional net savings.”
The analysis explains the savings and costs that result in that net figure.
The analysis continues:
Of the $1.55 trillion in savings from repealing the ACA’s coverage provisions, $900 billion comes from repealing insurance and cost-sharing subsidies and $1.10 trillion from repealing the Medicaid expansion. These savings are partially offset by $250 billion of cost from repealing the legislation’s insurance mandate penalties and another $200 billion from interactions and various other provisions.
Remember that “repealing insurance and cost-sharing” and “repealing Medicaid expansion” mean tens of millions of people lose coverage — 23 million to be exact. Without the mandate penalties, many young, healthy people will flee the exchanges, accelerating the so-called death spiral and chasing insurers (which means the single remaining insurer in some exchanges) out of the system.
On the revenue side we see:
About half of the $800 billion of revenue loss from repealing ACA’s taxes comes from removing the 0.9 percent Medicare payroll surtax on wages above $200,000 ($150 billion) and the 3.8 percent surtax on investment income above the same threshold ($250 billion). Another quarter of the revenue loss comes from repealing various fees on insurance companies, medical device companies, and drug manufacturers. Repealing the “Cadillac tax” on high-cost insurance plans costs $100 billion over a decade; those costs are slated to grow substantially over time, and repealing the Cadillac tax without a replacement would also remove a key tool in helping to slow overall health care cost growth.
Once the revenue is gone, there is nothing to pay for a replacement plan and Republicans would need to find savings and/or new revenue unless they are willing to add $350 billion ($150 billion in dynamic scoring) to the debt.
The CRFB recommends something other than full repeal, namely that any changes “should be designed to reduce, not increase, the unsustainable growth in the federal debt. Savings from repealing parts of the ACA must be large enough to not only finance repeal of any of ACA’s offsets, but also to pay for whatever ‘replace’ legislation is put forward. This is not an easy task, and it will likely require policymakers to retain or replace the majority of ACA’s health and revenue offsets.” Moreover, “Repeal and replace should also, of course, be evaluated on other parameters — including what it does for coverage, economic growth, and individual premium costs.” And finally, the CRFB argues: “Perhaps most importantly, repeal and replace should aim to continue the recent slowdown in health care costs. This will require building upon the parts of the Affordable Care Act that appear to have worked to slow cost growth, learning from the parts that have not, and pursuing new changes to address areas of health reform that the ACA may have missed.”
Put simply, a complete repeal with no fixed alternative is grossly irresponsible. It’s a rush to show the base, which was once again promised an easy solution (repeal Obamacare!) that Republicans can “deliver.” But what they are “delivering” is more debt, massive loss of coverage, chaos and true hardship for those who can least afford it. This is dumber politically than abolishing an independent ethics office.
Republicans are perpetuating a fable — that there is a solution that is “better” than Obamacare that can pass both houses. If they think there is such a plan, let’s see it and pass it simultaneously with repeal.