"The Concurrent Resolution on the Budget for Fiscal Year 2017 directed the House Committees on Ways and Means and Energy and Commerce to develop legislation to reduce the deficit. The Congressional Budget Office and the staff of the Joint Committee on Taxation (JCT) have produced an estimate of the budgetary effects of the American Health Care Act, which combines the pieces of legislation approved by the two committees pursuant to that resolution. In consultation with the budget committees, CBO used its March 2016 baseline with adjustments for subsequently enacted legislation, which underlies the resolution, as the benchmark to measure the cost of the legislation.
Effects on the Federal Budget
CBO and JCT estimate that enacting the legislation would reduce federal deficits by
$337 billion over the 2017-2026 period. That total consists of $323 billion in on-budget
savings and $13 billion in off-budget savings. Outlays would be reduced by $1.2 trillion
over the period, and revenues would be reduced by $0.9 trillion.
The largest savings would come from reductions in outlays for Medicaid and from the
elimination of the Affordable Care Act’s (ACA’s) subsidies for nongroup health insurance.
The largest costs would come from repealing many of the changes the ACA made to the
Internal Revenue Code—including an increase in the Hospital Insurance payroll tax rate
for high-income taxpayers, a surtax on those taxpayers’ net investment income, and annual
fees imposed on health insurers—and from the establishment of a new tax credit for health
American Health Care Act