The Financial Impact of the Supreme Court’s Decision

The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) recently estimated the direct spending and revenue effects of H.R. 6079, the Repeal of Obamacare Act, as passed by the House of Representatives on July 11, 2012. Estimates by the CBO reflect the spending and revenue projections by CBO in March 2012, adjusted after the Supreme Court decision in National Federal of Independent Business v. Sebelius and the implications therefrom.

In repealing the Affordable Care Act (ACA), H.R. 6079 would restore provisions of law modified by that legislation as if the ACA had never been enacted. This would include:

  • Eliminate the requirement that most legal residents of the United States obtain health insurance or pay a penalty tax;
  • Eliminate insurance exchanges through which certain individuals and families will receive federal subsidies to substantially reduce the cost of purchasing health insurance coverage;
  • Significantly reduce eligibility for Medicaid for residents of states that will choose to expand their programs under the ACA;
  • Increase the rate of growth of Medicare’s payment rates for most services (relative to the growth rates projected under current law);
  • Eliminate the excise tax on health insurance plans with relatively high premiums;
  • Eliminate certain taxes on individuals and families with relatively high incomes; and
  • Make various other changes to the federal tax code, Medicare, Medicaid, and other programs.

The CBO projected that H.R. 6079 would increase federal deficits by $109 billion between 2013 and 2022 (reduce direct spending by $890 billion and reduce revenues by $1 trillion). CBO’s complete report on the effects of H.R. 6079 can be viewed here.

CBO’s estimates of the budgetary effects of the health insurance coverage provisions of the ACA (after the Supreme Court decision) can be viewed here.

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