Medically Approved

The impact of repealing Obamacare: debilitated state budgets


Optum Perks Author

By Optum Perks Author

Six years ago President Obama proposed, and congress enacted, the Affordable Care Act (commonly known as Obamacare) as law. Republicans have been vocally opposed to Obamacare since its inception. Many right-wing politicians up for election in November, including the presumptive GOP nominee Donald Trump, have vowed to repeal Obamacare. Although this may seem farfetched, it could become a reality if Trump wins the white house and Republicans capture a controlling majority of the Senate.

The Affordable Care Act (ACA) has been a polarizing issue, especially between Republicans and Democrats. But what would happen if it really was repealed? 

Many would lose coverage: The ACA has provided many states with federal subsidies to help expand Medicaid. The repeal of Obamacare would be the end of these subsidies. So, unless states were willing to take on the extra financial burden, many would lose the coverage they now have through Medicaid. States would also have to pay quite a bit more to sustain the remaining Medicaid recipients than they currently are with the ACA. Those on Medicaid aren't the only ones who would lose coverage. Many who don't have healthcare available through their employer rely on the healthcare marketplace, established by the ACA, for insurance. If the marketplace goes away, so does their insurance. Young adults and working families will likely be hit hardest, as 8 in 10 of those that would lose coverage fit in those groups.

It would save the federal government trillions of dollars in debt: The federal government will spend an estimated 24 billion on health care subsidies this year alone. However, some predict that revenue raised and cuts in other areas of federal spending will make up for the spending on health care.

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It would hurt state governments: This may be a case of robbing Peter to pay Paul. If the ACA is repealed, it may help the federal government's budget, but it will hurt the states. States will lose not only Medicaid subsidies but also CHIP and other programs which they would then have to pick up the slack for. Many states estimate millions of dollars of budget savings since the ACA has been put in place. Another area that would suffer greatly is state prisons. Several prisons have touted large budget savings since Obamacare stepped in to pay for many prisoners' health care.

Hospitals and employment in the health care sector would suffer: Hospitals have benefited enormously from the ACA. Many jobs have been created since the ACA, and many of those jobs would be eliminated right along with the ACA. Hospitals, especially non-profits and emergency rooms, would suffer financially due to policies where doctors treat all patients even if they can't pay. Doctors and other providers would be left to take on the costs of those patients who were uninsured and unable to pay, likely passing those costs on.

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