CBO: ObamaCare repeal bill would reduce deficits by half a trillion dollars over 10 years

posted at 10:01 am on January 5, 2016 by Ed Morrissey

Plenty of Americans choose to reject ObamaCare to save themselves a boatload of money. Republicans in Congress believe the US budget should have that choice, and the CBO agrees with them that it would work, too. Their latest analysis of a bill that would repeal the major components of ObamaCare through the reconciliation process concludes that it would reduce federal deficit spending by $516 billion over the first ten years:

Legislation to gut most of ObamaCare’s mandates and taxes, known as Restoring Americans’ Healthcare Freedom Reconciliation Act, would reduce the deficit by $516 billion over 10 years, according to the Congressional Budget Office (CBO).

The bill is expected to get a vote in the House this week, and it has already been approved by the Senate. President Obama has said he would veto the bill. …

Republicans are looking to pass their latest bill targeting ObamaCare through a budget process known as reconciliation. Under the Senate’s rules, a party that controls both chambers can pass legislation with a simple majority, sending a bill gutting ObamaCare to the president’s desk for the first time.

Democrats used the reconciliation process to stuff the Affordable Care Act down the throats of Senate Republicans in 2010. A return volley would certainly prove satisfying, at least temporarily. Barack Obama will waste no time in issuing a veto, one that Republicans do not have a prayer of overriding, but it still forces Obama to publicly defend a system that has turned health insurance into a very expensive — and mandatory — nightmare for Americans in the retail markets.

At The Fiscal Times, Rob Garver says that other costs aren’t being taken into account:

First off, the percentage of Americans with no health insurance, currently at a record low, would begin to rise again. The cost of fear and uncertainty doesn’t show up in federal ledgers, but it’s no less real because of it.

Second, taking away health insurance won’t prevent people from getting sick. It will just temporarily prevent the uninsured sick from seeking care, meaning that they will be likely to get sicker, until they are eventually forced to seek emergency care.

And because hospitals are not allowed to deny care to seriously ill patients who don’t have the ability to pay, those costs have to be absorbed somewhere. If history is any guide, they will be absorbed by individuals and employers, whose premiums will rise in order to cover the costs of caring for the uninsured.

My colleague confuses insurance with care in the first and second arguments, and it’s a distinction that matters in ObamaCare. While preventive-care checks are covered by the insurer mandates, that’s not true of acute care visits to clinics and emergency rooms — and for most people in ObamaCare, those costs come straight out of their pockets whether they have insurance or not. For 2016, the average deductible in the gold plan is $1,105, and for bronze it is $5,629. Consumers are forced to pay retail under ObamaCare for almost everything except their annual checkups unless they get sick enough to need hospitalization, especially under the bronze plans. The only thing that ObamaCare changes is that they have to pay expensive premiums running in the hundreds of dollars a month on top of those out-of-pocket payments for acute care.

The hospital coverage issue is significant, but it’s one that has largely been unaddressed by the individual-mandate portion of ObamaCare. Those costs are mostly absorbed by the Medicaid expansions, and it’s worth noting that utilization of hospital resources hasn’t significantly changed post-ObamaCare, either. Emergency room visits increased under ObamaCare, according to a Harvard study, and will continue to do so. (Also, the Medicaid expansion puts state and federal government on the hook for a greater share of the costs.) A follow-up study by the American College of Emergency Physicians confirmed those findings in May 2015.

If we want to fix the hospitalization costs, we could have addressed that without a government takeover the health insurance system and the massive cost distortions to both individuals and the government that ObamaCare produced. In fact, one way would have been to encourage the use of catastrophic health insurance to cover potential hospitalizations at much lower premiums while using health-savings accounts (HSAs) to pay for routine care through retail pricing. Instead, ObamaCare sticks consumers with inflated comprehensive-care premium pricing while the deductibles (especially in the bronze plans) make them effectively only useful for hospitalization anyway. It’s literally the worst of both worlds, with the government forcing people to choose between that an a fine and no coverage at all. The fact that millions of Americans choose the latter tells us plenty about ObamaCare outcomes, even without the CBO’s analysis.


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Comments

Gradually, and then suddenly.

WryTrvllr on January 5, 2016 at 10:07 AM

The photo of Dr Ponytail is triggering for me.

forest on January 5, 2016 at 10:11 AM

More Kabuki Failure Theater™

The GOPe has no intention of ever stopping Obamacare or they’d force action on it when it actually counts (ie: funding the government) instead of these dumbass symbolic votes that always die in a Democrat filibuster.

Which they’d ALSO get rid of (filibuster) if they were serious about getting rid of Obamcare or fighting Obama in any meaningful sense.

Almost no one in Congress deserves re-election.

ConstantineXI on January 5, 2016 at 10:11 AM

Second, taking away health insurance won’t prevent people from getting sick. It will just temporarily prevent the uninsured sick from seeking care, meaning that they will be likely to get sicker, until they are eventually forced to seek emergency care.

Speaking to my wife’s colleague who works at the ER in a major Miami-Dade area hospital, ER’s are being used more than ever for primary care purposes.

In that regard he told me straight up that ACA has failed – and this guy is a huge Obama supporter.

Defenestratus on January 5, 2016 at 10:15 AM

How about we reduce the deficit by $516 billion per year, instead of per decade?

Fenris on January 5, 2016 at 10:18 AM

Well, repealing it would at least reduce my deficits by well into five figures per year.

bobthm3 on January 5, 2016 at 10:18 AM

Those costs are mostly absorbed by the Medicaid expansions, and it’s worth noting that utilization of hospital resources hasn’t significantly changed post-ObamaCare, either. Emergency room visits increased under ObamaCare, according to a Harvard study, and will continue to do so.

Here in Kentucky Hospitals in rural areas are being forced to close due to vastly increased numbers of people who got Medicaid under Obamacare. The extremely low rates or reimbursement from Medicaid are apparently not enough to keep the doors open now that everyone has “health insurance” and is using the heck out of it for every minor thing.

Approximately 30% of the entire State population is now covered under Medicaid thanks to the former Governor.

Johnnyreb on January 5, 2016 at 10:24 AM

would reduce federal deficit spending by $516 billion over the first ten years:

Oh … 51 billion a year. How nice.

Is this just a dog and pony show? The House just passed the Omnicrap bill of over a trillion.

darwin on January 5, 2016 at 10:24 AM

The law of unintended consequences continues to rear its ugly head. Or was this Alinsky’s student’s intention?

vnvet on January 5, 2016 at 10:27 AM

The extremely low rates or reimbursement from Medicaid are apparently not enough to keep the doors open now that everyone has “health insurance” and is using the heck out of it for every minor thing.

Johnnyreb on January 5, 2016 at 10:24 AM

Not only that, but people on Medicaid are going to the ER in an effort to get a doctors note allowing them to be excused from work for days or weeks at a time, oftentimes for nothing more than just mild pains or headaches, if even.

Before Medicaid expansion, the cost of actually going to the ER would keep people from abusing the ER as their “get out of work” card but now that its “free” they are constituting a huge percentage of ER visits, taking valuable time away from people who actually need ER services.

Defenestratus on January 5, 2016 at 10:30 AM

We can’t take away healthcare from women and children.

It’s not who we are.-GOPe

artist on January 5, 2016 at 10:36 AM

Seriously? They really do think we’re as stupid as they are!

Jackson on January 5, 2016 at 10:37 AM

Hospitals can be forced to provide services, how are doctors compelled to work for free?

goatweed on January 5, 2016 at 10:40 AM

All this is moot, it’s a show vote by Republicans to mask the disastrous support they gave that horrible budget. How much of a deficit did that add to the next ten years with that one?

Ukiah on January 5, 2016 at 10:40 AM

Rob Garver is an idiot.

ER usage is up – non-paid services are not down, and hospitals aren’t doing well.

Even with the medicaid expansion – the level of uninsured Americans is approximately the same as it was before the legislation was passed, and if you consider that medicaid is no better than being uninsured (because no one will see you) one could make an argument that FEWER people are insured, or at least a lower percentage are insured, than before the ACA.

Zomcon JEM on January 5, 2016 at 10:57 AM

In the waning days of the GOPe, they passed a symbolic bill to gut O’Care. After many years of punting responsibility, and refusing to put the Socialist-Fascists Democrats on the defensive, a veto forced the bill back to Congress, where the dithering members of the GOPe and Socialist-Fascists (collectively known as the Euniparty) killed the measure and the rest became history.

The GOPe was last seen on its last hill to die on surrounded by angry voters – most notably the Tea Party on one side and General Trump’s electorate on the other.

Little did the Socialist-Fascists know what was in store for them next.

Turtle317 on January 5, 2016 at 10:57 AM

Keep in mind that Republicans in Congress love Big Government as much as the Democrats.

albill on January 5, 2016 at 10:59 AM

Didn’t the CBO project that Obamacare was at least cost-neutral at worst, or reduced deficit spending at best? I think I remember something along those lines being trotted out by the regime in the long, hot, summer of 2009. Why aren’t we asking why that was the case then, and now a repeal bill reduces deficits?

BobM88 on January 5, 2016 at 11:12 AM

More Kabuki Failure Theater™

The GOPe has no intention of ever stopping Obamacare or they’d force action on it when it actually counts (ie: funding the government) instead of these dumbass symbolic votes that always die in a Democrat filibuster.

Which they’d ALSO get rid of (filibuster) if they were serious about getting rid of Obamcare or fighting Obama in any meaningful sense.

Almost no one in Congress deserves re-election.

ConstantineXI on January 5, 2016 at 10:11 AM

This was simply a sop to the base they despise. It’s so they can point and say, “See! We tried!”

CurtZHP on January 5, 2016 at 11:13 AM

The filthy Republican’s fund it and now they are going to repeal it? Yeah right.

Mr. Arrogant on January 5, 2016 at 11:16 AM

This was simply a sop to the base they despise. It’s so they can point and say, “See! We tried!”

CurtZHP on January 5, 2016 at 11:13 AM

We aren’t the bunch of no information simpleton Democrats they are looking for that are fooled by meaningless symbolism.

ConstantineXI on January 5, 2016 at 11:31 AM

Why aren’t we asking why that was the case then, and now a repeal bill reduces deficits?

BobM88 on January 5, 2016 at 11:12 AM

Because CBO can only analyze the numbers based on the data provided by Congress. At that time, the Copperheads controlled Congress, and Nancy Pelosi and Harry Reid gave them false numbers.

SDN on January 5, 2016 at 11:53 AM

While preventive-care checks are covered by the insurer mandates, that’s not true of acute care visits to clinics and emergency rooms — and for most people in ObamaCare, those costs come straight out of their pockets whether they have insurance or not.

There are so many dynamics such as this involved in health care costs that people keep forgetting what is truly driving UP the cost of health care. The most costly dynamics for the medical and health care professions involve primarily two factors.

First: Medical Malpractice Claims. Without Caps reform, tort reform, and placing caps on legal fees, the costs will continue to skyrocket. The legal schools are producing too many lawyers, and they have to find sources for income. Medical malpractice with astronomical limits has seduced too many lawyers into not just grubbing around in the deepest pockets, but has turned the worst of the profession into ambulance chasers who file frivolous claims in the hopes that the targets will cave and settle, even if there is no real case, instead of losing big money by fighting. Easy money for the lawyers, for sure. Unfortunately, Congress is composed of way too many members who started out life with legal training at some level.

The second thing is the fault of the government itself encouraged by the medical and health care professions themselves. Wellness care and preventive care has gone to such extremes that it became a source for quick reliable billable income for the health/medical industry via group business insurance policies, and via Medicare and civil service group insurance for government employees. Worse was that most people were able to get the care without having to look at the actual bills that were being paid by someone else. Unfortunately, once those categories of folks became accustomed to those medical benefits, everyone wanted them without anyone studying if all of those tests really helped or not. Now compound that by millions of illegal immigrants showing up at the hospitals demanding care, and the costs are off the charts.

Without legal reforms, no amount of educating to change people’s attitudes about the other dynamic can make a difference.

UPNorthWolf on January 5, 2016 at 11:54 AM

Second, taking away health insurance won’t prevent people from getting sick. It will just temporarily prevent the uninsured sick from seeking care, meaning that they will be likely to get sicker, until they are eventually forced to seek emergency care.
Speaking to my wife’s colleague who works at the ER in a major Miami-Dade area hospital, ER’s are being used more than ever for primary care purposes.

In that regard he told me straight up that ACA has failed – and this guy is a huge Obama supporter.

Defenestratus on January 5, 2016 at 10:15 AM

About your friend, I’m curious. After he admitted the failure of Obamacare, how long did it take for him to say that only single payer could save us now? Get ready to bend over again, America. Forward!

idalily on January 5, 2016 at 2:19 PM

UPNorth – true to a degree. Wellness and preventative care as such actually do not pay off across the population in general – the payoff happens in sub-groups (like employers trying to get their covered lives to medicare age). As a society we do a ton of preventative care, especially cancer screens, more than any other society. But in general, wellness and preventative do not pay off very well. They are good for the individual if they don’t want to be sick regardless of who is paying. But the amount of money spent on it isn’t very much in relationship to the entire medical bill. The most expensive item on the current preventative list is the once a decade colonoscopy. And technology is going to keep bringing the cost down because it is one of the preventative tests that has a decent payback.

Malpractice does create overprescribing medical procedures – but studies have shown while problematic, it doesn’t drive cost as much as you might think. Having a baby is the big one, neurosurgery and anesthesia big as well. Certainly worth a fix however.

The big thing is that we are just very healthy. The low fat diet jihad has been exceedingly bad for America, helping fuel a diabetes epidemic. Nothing worse for any plan than a diabetic out of control. And of course, we have been conditioned for so long to not have to pay for anything that the idea that we have to pay for something is a problem.

This should be fixed by eliminating coverage for some basic items – doctor’s visits and such other low cost things that don’t fit the definition of insurance. Or at least price policies differently on what is and is not being covered. If you cannot afford to see your doc twice a year for a couple hundred bucks I’m going to ask you about all the tats on your arm or the IPhone6S in your hand.

You get diagnosed with liver cancer and you are facing $250K – you need insurance for that.

Zomcon JEM on January 5, 2016 at 2:24 PM

Unlike dimwit Rob Garver most Americans aren’t so stupid as to fail to realize what a bs catastrophe 0bamacare really is, deliberately intended by its treasonous commie authors to destroy American health care thinly disguised as improving it. That the GOP really failed severely to oppose it shows them to be the usual spinelss accomplices to evil Dims. Only the God on Whom we’ve so wickedly turned our backs can save us now. It would serve us right (me included) if He didn’t, but thankfully He’s infinitely more godly and kind than I am. God save us.

russedav on January 5, 2016 at 3:22 PM

A quick reminder for the low information Trump supporters: Trump wants to bail out Democratcare and have YOU pay for that.

The message is clear. If you want to get rid of the Big Government monkey riding on your back you need to vote for Conservatives, not Democrat Party retreads, liberal republicans, or for those that supported liberals for decades.

DannoJyd on January 6, 2016 at 3:04 PM