Bipartisan Analysis: Fully Repealing Obamacare Will Cost $350 Billion

President-elect Donald Trump and Congressional Republicans have often complained about how unaffordable Obamacare is. However, completely repealing the health reform law would be pretty costly to the federal budget.

A full repeal of Obamacare would cost $350 billion over the next decade, according to a new analysis from the bipartisan Committee for a Responsible Federal Budget. This makes its wholesale dismantling much more complicated.

Obamacare was carefully crafted in 2010 so that it didn’t add to the federal deficit — in fact, it boosted revenues slightly. The law affects the federal budget in three ways: coverage provisions, taxes and fees, and Medicare components.

Here’s the impact of repealing each (through 2027):

–Coverage provisions, which include the individual and employer mandates, subsidies and Medicaid expansion: Savings $1.55 trillion
–Taxes and fees levied on high-income Americans, insurers, providers and others, as well as the Cadillac tax on high-cost insurance plans: Cost $800 billion
–Medicare components, such as slowing the growth of provider rates and lowering payments to Medicare Advantage insurers: Cost $1.1 trillion

Getting rid of all three would blow a hole in the budget even before Republicans come up with a replacement plan, which will also need to be funded.

At this point, Congressional Republicans are focusing on repealing the coverage provisions, taxes and fees through a process known as budget reconciliation.

Eliminating all the coverage provisions and taxes and fees immediately would save the federal government $750 billion, according to the committee. However, lawmakers are expected to delay ending the exchanges, subsidies and Medicaid expansion until they have a replacement plan in place, which could take two years or more. Keeping these going for two years would lower the expected savings to $550 billion.

Republicans have moved away from dismantling some of the Medicare components, which could turn repeal into a money-losing act for the federal government.

The savings matter since the Republicans need all the money they can get to pay for their replacement plan, which will likely include tax credits to help Americans who buy insurance in the individual market. Without a hefty cushion from the partial Obamacare repeal, lawmakers will either have to find the funds elsewhere in the budget or provide stingier credits — which will make it harder for people to afford coverage.

Some health care policy experts are pressing lawmakers to delay repealing the taxes and fees.

“These tax cuts would make it much more difficult to achieve a sustainable replacement plan that provides meaningful coverage without increasing deficits,” wrote Loren Adler and Paul Ginsburg in a Brookings analysis last month.

1 Comment

  • arnold fudpucker

    A good example of why laws should not be passed when they haven’t been thoroughly studied. obumma knew this was a bad deal for the country yet he pushed it through and a weak kneed repub party cratered. Point is that politicians like all political pukes are in it for themselves. Term limits is needed and badly.

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