Repealing ACA would avoid fiscal catastrophe
Repealing the ACA would avert catastrophe
The healthcare overhaul law is bad medicine and bad economic policy. The Patient Protection and Affordable Care Act was sold to the American people under the illusion of deficit reduction, but when you strip away the budgetary gimmicks, the healthcare reform law commits the country to long-term red ink.
In opposing repeal, Affordable Care Act advocates often cite the Congressional Budget Office projection that repealing the law would increase the deficit by $230 billion over the coming decade and by a modest amount in the subsequent decade. A closer examination of CBO’s work and other evidence leads to the exact opposite conclusion. Repeal is the first step toward restoring fiscal sanity.
The ACA is fiscally dangerous at a moment when the U.S. is already facing a sea of red ink. It creates two massive new entitlement programs at a time when the budget is already buckling under the weight of existing entitlements. At a minimum, it will add $1 trillion to government spending over the next decade. Assertions that these costs are paid for are based on omitted costs, shifted premiums from other entitlements and unsustainable spending cuts and revenue increases. As Michael Ramlet and I showed in Health Affairs, a more comprehensive and realistic budget projection suggests that the ACA could potentially raise the federal budget deficit by more than $500 billion during the first 10 years and by nearly $1.5 trillion in the following decade.
Applying the same evaluation methods to score a straight repeal of the ACA again requires accounting for the same budget gimmicks used by the law’s framers to manipulate the CBO’s estimate. When these measures are stripped, a different picture emerges: Repeal would lower, not raise, the federal deficit by $279.7 billion in the first 10 years.
The dubious budgetary provisions that impact the budget estimate of repeal fall into three categories: unachievable savings, uncollectible revenue and already-reserved premiums.
Unachievable savings: The first category removes spending cuts that we believe the CMS will ultimately be unable to implement. These