Study: ACA repeal would have big economic consequences without adequate replacement

California would suffer major economic consequences if Congress repeals the Affordable Care Act without an adequate replacement, according to a new study by the UC Berkeley Labor Center. 

Republicans in Washington appear poised to repeal the ACA, better known as Obamacare, some time after Donald Trump is sworn in as president. With premiums on the rise and consistently poor polling, repeal is music to the ears of many, as evidenced by every federal election since the measure was passed in 2010.

However, a partial repeal would cause Californians to lose hundreds of thousands of jobs, billions of dollars in annual federal funding and kick millions of people out of coverage. Some of the losses would be offset by gains elsewhere, but it’s impossible to give a complete analysis of the offsetting effects without Republicans’ replacement plan.

What we know

Even with Republican majorities in Congress and a Republican president, a full repeal of the ACA is unlikely, due to a 60-vote threshold in the Senate that would require at least a handful of Democratic votes.

UC Berkeley Labor Center analysts used a 2015 partial-repeal bill that was ultimately vetoed by President Barack Obama to estimate the effects. Under that bill, California would lose $20.5 billion annually in federal funding for low-income subsidies and expanded Medi-Cal coverage.

As a result of that lost funding, 3.7 million Californians would lose Medi-Cal coverage, while another 1.2 million would lose subsidies, which may or may not make coverage unaffordable. 

Offsets

The billions in lost federal funds would be offset by smaller gains elsewhere, like $6.3 billion in tax cuts to California insurers and high-income earners. A repeal could also remove the requirement to have coverage, saving $1.3 billion in penalties for the uninsured. 

The study estimates approximately 250,000 jobs would be lost from repeal. However, approximately 41,000 jobs would be created through tax cuts, as well as through eliminating fees on insurers, penalties to companies for not providing coverage and penalties for the uninsured.

Popularity

Polling and electoral results have repeatedly shown the law to be unpopular with the public nationally, and Californians are facing an expected average increase in premiums by 13.2 percent next year. 

Nationally, the public is divided on the law. In November, 45 percent of adults had an unfavorable impression of the law, compared to the 43 percent who had a favorable impression, according to a Kaiser Family Foundation tracking poll.

Republicans have incrementally seized power in Washington on a repeal platform ever since Democrats passed the ACA in 2010 with their own congressional majorities and president, Barack Obama. In 2010, Democrats lost the House. In 2014, they lost the Senate. And in 2016, they failed to regain the Senate and lost the White House.

5 comments

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  1. Dude
    Dude 28 December, 2016, 15:27

    Have you liberal cry babies figured out why the following took place?
    ……
    ” In 2010, Democrats lost the House. In 2014, they lost the Senate. And in 2016, they failed to regain the Senate and lost the White House.

    Reply this comment
  2. LB1
    LB1 28 December, 2016, 15:58

    You mean, 3.7 million immigrant , many illegal Californians would lose Medi-Cal coverage, while another 1.2 million would lose subsidies, which may or may not make coverage unaffordable. Shut it down. The care that people are getting now under Obumer’s law , stinks. you have to drive 150 miles to get a tooth pulled.The 43 percent who had a favorable impression are people that don’t pay for it to begin with. No government has the right to force anything on anybody. Period. The Democrats can go to He**. They have destroyed this country with their loony liberal laws and immigration. Look at that loon Jerry Brown, he needs to be thrown out of office. The idiots running this side show in Ca are just that, idiots. Someone has to come in and try and clean up this mess that these loons have gotten us into.

    Reply this comment
  3. Queeg
    Queeg 28 December, 2016, 19:54

    Comrades

    A waitress in a coffee shop, married, two children pays maybe $125.00 per month for ACA insurance……a comparable sized family making a decent living pay $1800.00 per month for health care…..no subsidy….you bad….you can afford it!!!!!

    And you wonder why so many people are angry out there.

    Reply this comment
  4. Sean
    Sean 29 December, 2016, 09:00

    What’s missing in this analysis is that it assumes the ACA will not be replaced with anything. There are proposals that have been floated for people without employer coverage to receive tax credits in the neighborhood of $6-8K per year that can only be used for health coverage. I don’t know if this will cover those who obtained coverage through expansion of Medicaid but I suspect it will. I think Democrats knew there were shortcomings in the ACA which was probably best described in Bill Clinton’s rant about the perverse incentives in the cost of the coverage on the exchanges if you work hard http://www.cnn.com/2016/10/04/politics/bill-clinton-obamacare-craziest-thing/. They thought it would put pressure on Congress to come up with a single payer system, the ultimate goal. They did not anticipate becoming the minority party at the Federal level.

    Americans now spend more than $10K per capita per year on healthcare whereas most industrialized countries manage to spend only slightly more than half that and still provide pretty good to their citizens. If the new administration can come up with a system that puts incentives in place to aggressively control costs, particularly in the many choices consumers make, it will go a long way to improving access for everyone.

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  5. Ray
    Ray 29 December, 2016, 10:26

    Why is no one talking about the thousands of summarily and illegally disenfranchised health insurance professionals whose hard earned renewal income was appropriated/eliminated with the implementation of the ACA? Will we all be re-instated with retro-active pay? Will it take a class action suit to correct and punish this crime?

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