Today on Fox News Sunday Rep. Paul Ryan (R-WI) said that his budget plan will include a repeal of Obamacare in order to balance the federal budget within ten years. Ryan is chairman of the powerful House Budget Committee. In the coming week, Ryan is expected to unveil his full budget plan. As Fox News’ host Chris Wallace pointed out, even if Ryan is able to pass his budget out of the House of Representatives, it will face a roadblock in the Democrat-controlled Senate. The House Republicans have already voted against Obamacare 30 times, with no success at extending their efforts beyond their own chamber. But the bigger question is whether Ryan’s premise is true. A look at the facts shows that a repeal of Obamacare likely would increase the deficit rather than balance the budget.
Of course, both sides have their arguments when it comes to the costs of Obamacare. Many progressives believe it will save hundreds of billions of dollars in the coming decade, while Republicans argue it will cost over one trillion. The non-partisan voice in the debate is the Congressional Budget Office (CBO). The CBO’s most recent report concluded that Obamacare will reduce the federal deficit by $4 billion from 2013-2019, and that projection was made before the Supreme Court ruling that likely will reduce the costs of the program.
Some might question why Obamacare, which will increase health care coverage to 30 million Americans, could reduce the federal deficit.
The simple answer is that the government already was paying an extraordinary amount for health care before Obamacare. Before Obamacare there was no government mandate for individuals to obtain health care insurance. When millions neglected to obtain health care insurance, this had costs for the American taxpayer, since these non-insured individuals often still got care in emergency rooms and/or qualified for Medicaid once their medical bills sapped all their funds. The most unpopular part of Obamacare, the individual mandate, saves money since it eventually requires individuals to obtain private insurance.
In addition, Obamacare implements a number of taxes on drug makers, medical device manufacturers, and a “Cadillac tax” on select, premium health insurance plans.
Finally, Obamacare cuts $743 billion in payments to Medicare providers. The Obama administration argues these payments are excessive and that the cuts can be done without dramatically affecting the Medicare beneficiaries. Republicans argue that the cuts will affect Medicare services for seniors. Regardless, the cuts to providers do help balance the budget, and by repealing Obamacare Republicans would get rid of these deficit-saving measures.
So whether one likes Obamacare or not, the fact remains that repealing it would do more harm than good in tackling the federal deficit.