CBO warns repealing healthcare would add $230 billion to deficit

Congressional budget scorekeepers said Thursday that Republicans’ effort to repeal healthcare reform would increase the deficit by about $230 billion over the first 10 years, adding fodder to Democrats’ argument that the House GOP is violating a key campaign pledge with its first major vote.

In a letter sent Thursday to House Speaker John Boehner (R-Ohio), the Congressional Budget Office provided a preliminary analysis of the repeal bill, which is scheduled to come up for a vote Wednesday. A more detailed analysis of the legislation is forthcoming, the CBO said.

The $230 billion estimate is higher than one from last year, largely because it now examines the effect of the law between 2012 and 2021 instead of an earlier window. 

In a blog post, CBO Director Douglas Elmendorf wrote that “CBO has seen no evidence to date that the steps that will be taken to implement the March legislation — or the ways in which participants in the health care and health financing systems will respond to that legislation — will yield overall budgetary effects that differ significantly from the ones that CBO and (the Joint Committee on Taxation) projected earlier.”

Republicans are proposing to repeal healthcare reform without offsetting the costs. They argue that the CBO’s estimates of cost-savings under the law are based on “accounting gimmickry” in part because several of the law’s fees and taxes start several years before Americans become eligible for insurance subsidies, starting in 2014.

While
it did not provide a detailed estimate of the cost of repeal past the
first 10 years, CBO told Boehner that repeal “would probably continue to
increase budget deficits … in subsequent decades.”

However, Elmendorf adds the caveat that long-term projections are based on lawmakers following through with the intent of the law.

“CBO’s responsibility to the Congress is to estimate the effects of proposals as written and not to forecast future legislation,” he wrote. “However, current law now includes a number of policies that might be difficult to sustain over a long period of time. If those policies or other key aspects of the original legislation would have subsequently been modified or implemented incompletely, then the budgetary effects of repealing PPACA [the Patient Protection and Affordable Care Act] and the relevant provisions of the Reconciliation Act could be quite different — but CBO cannot forecast future changes in law or assume such changes in its estimates.”

Boehner continued to cast doubt on the CBO figures in a Thursday morning press conference.

“CBO
can only provide a score based on the assumptions that are given to
them,” he said. “If you go back to look at the healthcare bill and
the assumptions that were given to them, you see all of the double
counting that went on.”

Saying that the “CBO is entitled
to their opinion,” Boehner said the Medicare agency’s actuary found the bill
would not result in savings predicted by the CBO. In April, the Centers
for Medicare and Medicaid Services actuary warned the reform law could result in higher prices for health resources.

Democrats were quick to criticize Republicans after the CBO score was released.

“The Congressional Budget office confirms that just one day after taking over the House, the Republican rhetoric on fiscal discipline doesn’t meet the reality test as their plans to take away valued health benefits from the American people will balloon our deficit by $230 billion over 10 years,” said House Ways and Means Ranking Member Sander Levin (D-Mich.)

Repealing the law would also increase the number of uninsured Americans in 2019 by 32 million, for a total of 54 million, CBO said. 

The letter to Boehner also points out that while Republicans’ repeal proposal would also cut $106 billion in authorizations that aren’t appropriated in the law, most of that — $86 billion — is for continuation of existing activities, such as programs of the Indian Health Service and Federally Qualified Health Centers. Republicans may well want to keep funding even if the law is repealed, and CBO writes that “repeal of those … authorizations would not necessarily result in discretionary savings of that amount.” 

The CBO adds that many people would end up paying more for individual coverage if the law is repealed because, while premiums would be higher because coverage would be more comprehensive, most Americans would get subsidies to pay for it. Americans would also see “slightly higher” premiums if they get coverage through a large employer, while premiums obtained through small employers “might be slightly higher or slightly lower.”

Jason Millman contributed.

This post was updated at 12:16 p.m.