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

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:

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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:

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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.

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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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David Strom 10:30 AM | November 15, 2024
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