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How The Supreme Court Could Blow Up -- Or Improve -- The Deficit

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Newscom

As Congressional Budget Office director Doug Elmendorf explained Wednesday, the court has other options, all of which prefigure different budgetary consequences.

"If the Supreme Court were to eliminate the mandate [it would] reduce the number of people who end up with health insurance to a significant degree," Elmendorf told reporters at a breakfast roundtable. "It would raise the cost-per-person in the health insurance exchanges because those who stopped getting insurance would be disproportionately the healthier ones, so you'd have a sicker pool on average and that would be more expensive for the government, per person, in the exchanges. But fewer people would be in the exchanges, and fewer people would be enrolled in Medicaid. So on balance the federal government would save a few hundred billion dollars over the coming decade."

In other words, from a strictly budgetary point of view, the Court would be improving the deficit by striking the mandate alone.

But in that event, the health insurance industry would put tremendous pressure on Congress to replace the mandate with something more clearly constitutional -- and the legislation they'd be requesting would by definition increase budget deficits. This would make fixing the law even more difficult than it already would be, given the intense GOP distaste for the mandate and the rest of the ACA.

The Court could also decide to strike the mandate along with related guarantees that all people will be offered affordable insurance. That's what the administration argued the Court should do if it determines the mandate is unconstitutional. But the budgetary consequences of that outcome are unknown.

"We have not produced any estimates of that," he said.

About The Author

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Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight and the debt limit fight. He can be reached at brian@talkingpointsmemo.com

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