Despite GOP Slam, CBO Confirms Health Care Savings
Policy + Politics

Despite GOP Slam, CBO Confirms Health Care Savings

In a rebuke to Republican leaders who call health care reform a budget-busting trillion dollar spending program , the Congressional Budget Office said Thursday that the law saves money and its repeal, H.R. 2 Repealing the Job-Killing Health Care Law Act, which is scheduled for a vote on the House floor next week, will raise the deficit by $230 billion over the decade starting in 2012.

Despite repeated Republican attacks on CBO’s earlier analysis that showed a $143 billion reduction in the deficit from reform, the non-partisan CBO found little evidence to change its findings. In a letter to House Speaker John Boehner, CBO director Douglas W. Elmendorf wrote, “in its ongoing monitoring of developments, 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 different significantly from the ones that CBO and JCT (the Joint Committee on Taxation) projected earlier.”

Rep. Paul Ryan, R-Wis., the chair of the House Budget Committee, immediately slammed the new CBO analysis, which he attributed to budget tricks in the legislation. “Our dispute is not with the hard-working, non-partisan professionals at the Congressional Budget Office. CBO scores what is put in front of them – and what Democrats put in front of them last year was legislation packed with smoke and mirrors to hide the impact of trillions of dollars in new spending.”

The CBO letter noted that the increase in federal spending on health care between 2010 and 2019 would actually be about $400 billion. That is paid for in the legislation by increased efficiencies in Medicare, lowering payments to insurance companies that sell Medicare Advantage programs, and higher fees on medical device companies, among other revenue raising measures.

The CBO also came up with new estimates on the repeal’s effect on the uninsured, whose ranks would swell by 32 million compared to leaving the law in place. “The share of nonelderly residents with insurance coverage in 2019 would be about 83 percent (about what it is now), compared with a projected share of 94 percent under current law.”

The severity of the economic downturn did affect the CBO analysis. Repeal of the Affordable Care Act as passed last March would increase the deficit by about $130 billion over the next decade, which is slightly lower than the projections made at the time for savings under the bill. But in December, the lame-duck Congress agreed to claw back insurance subsidies from people whose income rises above the threshold after purchasing a subsidized plan. That will save about $15 billion compared to the previous cost estimates in the plan.

Related Links:
Health law repeal adds $230 billion to deficit (Politico)
CBO Weighs In On GOP Health Law Repeal (Kaiser Health News)
House Budget panel chairman backs embattled CBO head (The Hill)