Be Careful What You Ask For: CBO Tells Boehner That Obamacare Saves Money and Its Repeal Would Cost More

Don't cry, John!

Pity poor John Boehner. The Republican House Speaker from Ohio asked the Congressional Budget Office (CBO), which exists to measure all things mathematical for the legislative branch, how much the most recent bill to repeal the Affordable Care Act would save.

The answer? Nada. In fact, the CBO found that the ACA will decrease the deficit while its repeal would increase it. Here are parts of the letter sent to the honorable JB.

As you requested, the Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) have estimated the direct spending and revenue effects of H.R. 6079, the Repeal of Obamacare Act, as passed by the House of Representatives on July 11, 2012…

In repealing the ACA, H.R. 6079 would restore provisions of law modified by that legislation as if the ACA had never been enacted. Among other things, H.R. 6079 would:

  • Eliminate the requirement that most legal residents of the United States obtain health insurance or pay a penalty tax;
  • Eliminate insurance exchanges through which certain individuals and families will receive federal subsidies to substantially reduce the cost of purchasing health insurance coverage;
  • Significantly reduce eligibility for Medicaid for residents of states that will choose to expand their programs under the ACA;
  • Increase the rate of growth of Medicare’s payment rates for most services (relative to the growth rates projected under current law);
  • Eliminate the excise tax on health insurance plans with relatively high premiums;
  • Eliminate certain taxes on individuals and families with relatively high incomes; and
  • Make various other changes to the federal tax code, Medicare, Medicaid, and other programs.

…Assuming that H.R. 6079 is enacted near the beginning of fiscal year 2013, CBO and JCT estimate that, on balance, the direct spending and revenue effects of enacting that legislation would cause a net increase in federal budget deficits of $109 billion over the 2013–2022 period…

Deficits would be increased under H.R. 6079 because the net savings from eliminating the insurance coverage provisions would be more than offset by the combination of other spending increases and revenue reductions. In total, CBO and JCT estimate that H.R. 6079 would reduce direct spending by $890 billion and reduce revenues by $1 trillion over the 2013–2022
period, thus adding $109 billion to federal budget deficits over that period…

Further complicating the CBO’s job was the half-baked nature of the thirty-third bill House Republicans gave themselves to vote on that still doesn’t say what they’d do instead.

If H.R. 6079 was enacted near the start of fiscal year 2013, a number of final rules and other administrative actions to implement the ACA (and some modifications to it that were subsequently enacted) will have taken effect or been finalized during the 21?2 years since that law was enacted. H.R. 6079 does not specify how to implement the requirement that the provisions of law modified by the ACA be restored as if the ACA had never been enacted…Because of that ambiguity, H.R. 6079 would cede considerable discretion to the executive branch to implement its provisions.

CBO and JCT cannot anticipate with certainty the choices that the executive branch agencies would make—particularly as they pertain to the retroactive changes in law.

And though we do know that Mitt Romney specializes in retroactivity, it would be impossible to time travel back to 2009 and stop each one of those incremental reforms’ butterflies’ wings from beating. In other words, there’s just no way to unripple the ripple effect of the gradual changes from Obamacare. For example, health insurance companies that anticipated the Supreme Court striking down the law already pledged to keep its provision allowing young adults to stay on their parents’ plans through age 26.

And then there’s the little matter of contracts.

In addition, some provisions cannot be retroactively adjusted. For example, payment rates and subsidized benefits in the Medicare Advantage program and the Part D prescription drug program since the ACA was enacted were
established in negotiated contracts. The benefits provided under those contracts cannot be adjusted retroactively.

Not even if you’re Mitt Romney.

There’s much, much more but suffice it to say John Boehner wishes he’d never asked. Because perhaps even worse than showing that a repeal of Obamacare would increase the deficit is this little tidbit:

President Obama’s health care law will save the government $84 billion over the next 11 years.



  • majii
    July 24, 2012 - 8:57 pm | Permalink

    Boehner will do what he and the republicans usually do when they receive information from the CBO that doesn’t align with their POV: they’ll either condemn the CBO as a partisan entity that favors the democrats, or they’ll lie about what the CBO report says. I’ve seen them do both of these over the past 3+ years. Republican politicians tend to force their version of reality onto the facts. That’s how they can claim climate change isn’t real, tax cuts increase the government’s revenue, and that America is a Christian nation. Facts don’t matter. All that matters is their version of reality. This is also why some republicans are so angry about the latest poll that shows Romney trailing behind President Obama. Their version of Romney doesn’t match that of many Americans. As more and more information emerges that shows who/what Romney really is, they’re having major problems dealing with the truth, so they lash out online and on TV.

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