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The Cost of ACA Repeal

Urban Institute Study, June 2016- “Six years after its enactment, many are still calling for the repeal of the Affordable Care Act (ACA). In January 2016, Congress passed a bill for the first time, repealing the ACA without a replacement, but this was vetoed by the president. Because considerable controversy exists among ACA opponents on what should replace the ACA, the prospect of repeal without replacement is real and merits analysis. In this brief, we compare future health care coverage and costs with the ACA in place and with the law repealed. We find that ACA repeal would reduce federal government spending on health care for the nonelderly, which appears to be one of the goals of those advocating repeal, by $90.9 billion in 2021 and $927 billion between 2017 and 2026. That represents a decrease of 21.1 percent. However, that reduction comes at a cost in other areas:

  • The number of uninsured people would rise by 24 million by 2021, an increase of 81 percent.
  • 81 percent of those losing coverage would be in working families, around 66 percent would have a high school education or less, 40 percent would be young adults, and about 50 percent would be non-Hispanic whites.
  • There would be 14.5 million fewer people with Medicaid coverage in 2021.
  • Approximately 9.4 million people who would have received tax credits for private health coverage would no longer receive assistance.
  • State spending would increase by $68.5 billion between 2017 and 2026 as reductions in Medicaid spending would be more than offset by increases in uncompensated care.
  • Many states have reported net budget savings as a result of expanding Medicaid and would experience budget shortfalls if the ACA were repealed.
  • Significantly less health care would be provided to modest- and low- income families…”

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