Deficit Complicates Health Care Repeal Goal

Posted July 24, 2012 at 6:30pm

Congressional Republicans’ goal of repealing the Affordable Care Act continues to run afoul of their efforts to reduce the deficit, at least according to the judgment of the nonpartisan Congressional Budget Office.

The CBO said Tuesday that President Barack Obama’s signature health care law will cut the deficit by $109 billion over the next decade and is $84 billion cheaper after a Supreme Court ruling in June gave states more flexibility to nix an expansion of Medicaid.

The estimate cheered Democrats, who have sparred repeatedly with Republicans over whether the law cuts the deficit.

“It just goes to show, our Republican colleagues keep talking about the deficit, but they’ve now voted 37 times to blow a hole in the deficit by over $100 billion,” House Budget ranking member Chris Van Hollen (D-Md.) said.

As Van Hollen noted, Democrats pushed Republicans to wait for a CBO score on their latest repeal bill before passing it early this month — a request the GOP declined.

The estimate that repeal would add to the deficit could complicate Republicans’ drive to repeal the health care law next year if they use the budget reconciliation process to avoid a Senate filibuster. Democrats imposed pay-as-you-go discipline to reconciliation, requiring that such bills not add to the deficit. Republicans could rewrite those rules and jam through
deficit-financed tax cuts and spending on a majority vote. Or they could cut spending somewhere else.

Republicans were largely unfazed by the report, however. House Energy and Commerce Chairman Fred Upton said he was holding a conference call to discuss the results Tuesday afternoon, but he added that they are not likely to dampen his Members’ enthusiasm for repealing the law. Indeed, he noted, only one thing determines the fate of the law: the elections.

“We are where we are,” the Michigan Republican said. “The electorate on
Nov. 6 will render their second opinion, so we’ll see what happens.”

Rep. Greg Walden, deputy chairman of the National Republican Congressional Committee, said the economic argument alone shouldn’t dissuade Republicans from wanting to repeal the law.

“It doesn’t make it the best policy going forward because there are these other issues about effects on jobs and the economy, effects on access to care,” the Oregon lawmaker said. “There are lots of other issues other than just the raw dollar number.”

Senate Majority Leader Harry Reid (D-Nev.), checking his BlackBerry for the CBO results at a Tuesday press conference, said the reduction in the deficit backs up what Democrats have been saying since the law was enacted in 2010.

Citing the recent Supreme Court ruling and new government reports about Medicare premiums, Rep. Gerry Connolly called the estimate one of a “series of victories” for the law.

“Too early to uncork the champagne, but at some point, I think this bill is up. The empirical evidence, the analytical evidence, CBO to wit, all are pointing in the direction of support for the assertions we made about the ACA,” the Virginia Democrat said.  

The CBO predicted that 3 million fewer people will have health insurance under the law in 2022 after the court’s decision. Still, repealing it would double the number of people without health insurance from 30 million to 60 million, the CBO projected.

The CBO projected that 6 million fewer people will sign up for Medicaid and 3 million more will sign up for federally subsidized insurance exchanges. The exchange subsidies cost the government about $9,000 a year versus $6,000 for Medicaid, the CBO said. On net, however, the government will save money because fewer people would be getting subsidized at all.

House Energy and Commerce ranking member Henry Waxman said the prospect of states opting out of the new Medicaid funding was troubling.

“This is only a guess, but I think when it comes down to it, the states are going to be more likely to take the Medicaid coverage than CBO estimates. But if we’re looking at 3 million people that won’t get health care coverage, that’s something to be concerned about,” the California Democrat said.

Rep. Bob Goodlatte (R-Va.) said that it would fall to employers and insurers to cover those people and that raises the cost of the legislation — not to the government but to private companies.

“If they can be required to do it, that’s something employers will have to bear and doesn’t get counted in the score for the legislation,” he said. “That’s going to raise costs and it won’t be scored. It’s not a cost to government, it’s a cost to citizens. So the overall cost we think of this is enormous.”

“There’s so much about this that the law of unintended consequences covers that we don’t know about yet that I think mandates that we repeal it if we can,” Goodlatte said.

The CBO cautioned about uncertainty in its estimates.

“Assessing the effects of making broad changes in the nation’s health care and health insurance systems requires estimates of a broad array of technical, behavioral, and economic factors. Separating the incremental effects of the provisions in the ACA that affect spending for ongoing programs and revenue streams becomes more uncertain as the time since enactment grows,” the report stated.