CBO: Repeal of ACA would increase US deficit by $353B over 10 years

Matt McClain| The Washington Post | Getty Images

Matt McClain| The Washington Post | Getty Images

The Congressional Budget Office released a report on Friday that said a repeal of the Affordable Care Act (ACA), over the next decade, would “probably increase budget deficits with or without considering the effects of macroeconomic feedback.” (Tweet this)

Depending on those economic considerations, the federal deficit could increase up to $353 billion over the next 10 years as a result of a repeal, the CBO said.

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The ACA become law in March 2010, but has been targeted by a number of proposals for its repeal over the past few years. In this report, the CBO and staff of the Joint Committee on Taxation evaluate the economic consequences of such a repeal.

In their first major analysis of the issue in three years, the two government entities said a repeal would increase the number of uninsured Americans and would lead to higher Medicare costs.

Not considering the effects of macroeconomic feedback, the CBO estimates that federal deficits would increase by $353 billion in the 2016- 2025 period if the law were repealed. However, including the budgetary effect of macroeconomic feedback would bring the number down to $137 billion over the same period. “That estimate takes into account the proposal’s impact on federal revenues and direct (or mandatory) spending, incorporating the net effects of two components,” reads the report.

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The report finds that the repeal of the ACA would raise economic output, mainly by boosting the supply of labor. That increase in GDP is projected to average 0.7 percent over the 2021-2025 period. “Alone, those effects would reduce federal deficits by $216 billion over the 2016–2025 period, CBO and JCT estimate, mostly because of increased federal revenues,” according to the study.

The report also estimates that the number of nonelderly people uninsured could increase by about 19 million by 2016. In most of the next decade, the number of people with employment-based coverage would increase by about 8 million and the number of people with coverage purchased individually or though Medicaid would decrease by between 30 and 32 million.

—Reuters contributed to this report.

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