Fully repealing Obamacare will cost $350 billion

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President-elect Donald Trump has promised to dismantle Obamacare as one of his first acts after taking office. Yet he can't eliminate Obamacare on day one with the stroke of a pen. Killing the massive program that provides insurance to 20 million Americans would take time to work its way through Congress.

NEW YORK — President-elect Donald Trump and Congressional Republicans love to say how unaffordable Obamacare is. But 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.

3 comments

  • 2017willbebetter

    The Cadillac tax is ridiculous. No one should be punished for having a great plan. You should have a sucky plan with a high premium and high deductible to make AHCA happy? AHCA made our insurance make us change 2 years in a row-no keeping our plan, our nearest health unit dropped out of the insurance network, our rates went from $500 a month to $800 in one year and a whopping $1000 the next, all the while increasing the deductible (from 5k to 10k to keep premiums affordable) and going to crappier and crappier coverage with neither of us making a claim. We were on Silver Plan. Rates were going to go up again, so we checked the Boards to see what a subsidy was. Since our combined income was $60,021 it was $0. It was either $20 or $200 at the cut off of 60k. We both finally now have employer partial paid insurance, each with our own employer on individuals (see employer carve out clause) and our combined insurance premiums are about $300 a month and 3K deductible with 10k out of pocket. Our private was 10k deductible and another 12 out of pocket at $1000 a month. So NOT affordable. If you look at your W2 it will show you how much your employer pays for your premium. It is jaw dropping. The more people refuse to work, the higher he premiums and medical costs will be to cover them when they use the services. You cannot blame them for not wanting to work, when your entire paycheck goes to a premium because you have to work multiple jobs at 29 hours a week or less. Not right.

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