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Nancy  Madsen
By Nancy Madsen October 11, 2012

George Allen says ending Obamacare would save nation $1 trillion

George Allen, the Republican U.S. Senate candidate, offers the Patient Protection and Affordable Care Act as the prime example of what he says is an overreaching federal government under President Barack Obama.

In Monday night’s debate, he and Democratic candidate Tim Kaine were asked how they would avoid $1 trillion in automatic cuts split evenly between defense and domestic programs that are scheduled to begin Jan. 2. The cuts -- called sequestration -- can be averted only if Congress and the White House  agree on a debt-reduction package.

Allen’s plan included a big-ticket item. "Repealing and replacing Obamacare – that’s going to save $1 trillion over a 10-year period," he said.

Allen gave an identical response when he was asked during a Sept. 20 debate how he would reduce debt and avoid sequestration.

We were curious if canceling Obamacare really would save the government $1 trillion.

The Allen campaign, in a blog, pointed to three studies to back up its claim:

*A Jan. 6, 2011, report issued by House Republican leaders entitled, "Obamacare: A Budget-Busting, Job Killing Health Care Law."  The GOP said that the health care act would add $701 billion to the nation’s debt over 10 years.

*An April 9, 2012, study by Charles Blahous, a conservative policy analyst whom Obama approved in 2010 as the GOP trustee for Medicare and Social Security. He concluded that the law would add more than $340 billion to the nation’s debt woes over the next decade.

*An Aug. 2, 2012, paperby the Heritage Foundation, a conservative think tank. It said the reforms would expand the debt by at least $340 billion over 10 years and priced scenarios that might take the number beyond $500 billion.

So Allen offered three studies by conservative analysts and none of them came close to saying that repealing Obamacare would save the government $1 trillion over 10 years.

Allen also cited a July report by the nonpartisan Congressional Budget Office, the primary agency charged with reviewing the cost of legislative proposals. He noted that the CBO estimated that the government’s price of implementing Obamacare would easily exceed $1 trillion over 11 years.

But Allen omitted a crucial fact: the CBO said the reforms would more than pay for themselves through health care efficiencies, taxes and fees.

In a July 24 letter to House Speaker John Boehner, the CBO estimated that repeal of Obamacare would increase deficits by $109 billion over 10 years.  

Here’s the CBO’s math: By repealing the law, the government would save $1.171 trillion in expanded health care costs. But it would lose $1.28 trillion in savings -- $711 billion in health care efficiencies demanded by the law and $569 billion in taxes and fees.

The CBO left itself wiggle room, saying it is difficult to predict how the Affordable Care Act will affect the budget. Contributing to the complexity, the agency said, is a June decision by the U.S. Supreme Court that allows states to opt in or out of Medicaid expansion.

The studies by House GOP leaders, the Heritage Foundation and Blahous say the government is overestimating savings that will come from health care efficiencies. Those future savings, they say, could be used to pay for other programs and have little impact on deficits.

Our colleagues at last year described as "bogus" the GOP leaders’ contention that the repeal of Obamacare would save $701 billion. They said the Republicans overestimated costs of the law and wrongly claimed that the CBO was "double counting" savings.

When GOP presidential nominee Mitt Romney claimed that the Affordable Care Act added "trillions to our deficits and to our national debt," PolitiFact National rated it False. The same ruling was given to Romney when he said repealing the law would save $95 billion in 2016.

Our ruling

Allen, in describing how he would cut debt, said repeal of the health care act would "save $1 trillion over a 10-year period."

The three studies he cites from conservative analysts don’t put the debt reduction anywhere near $1 trillion -- the closest he gets is $701 million in a report commissioned by the House Republican leadership. And a report by the nonpartisan CBO says the repeal of Obamacare would increase debt by $109 billion over 10 years.

We rate Allen’s claim False.

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Our Sources

Tim Kaine, "CBO: Repealing ACA won’t fix sequestration, it will make budget challenges worse," Sept. 20, 2012.

Youtube, "Fairfax Chamber of Commerce/NBC 4 Debate," (question on sequestration at 14:36) Sept. 20, 2012.

C-SPAN, "Virginia Senate Debate," (question on sequestration at 44:35) Oct. 8, 2012.

George Allen, "PolitiFact and the Cost of Obamacare," Sept. 27, 2012.

Office of the Speaker of the House, "Obamacare: A Budget-Busting, Job-Killing Health Care Law," Jan. 6, 2011.

Congressional Budget Office, "Estimate for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision," July 24, 2012.

Congressional Budget Office, "Letter to the Honorable John Boehner providing an estimate for H.R. 6079, the Repeal of Obamacare Act," July 24, 2012.

The Heritage Foundation, "Obamacare Remains a Budgetary and Policy Disaster," Aug. 2, 2012.

The Heritage Foundation, "Obamacare Loses Again in Deficit Reduction Debate," Aug. 22, 2012.

PolitiFact Florida, "Obama to blame for defense sequestration, says Romney ad," Sept. 21, 2012

PolitiFact, "Mitt Romney says ‘Obamacare’ adds trillions to the deficit," June 28, 2012.

PolitiFact, "Mitt Romney said repealing ‘Obamacare’ would save $95 billion in 2016," Nov. 4, 2011.

Congressional Budget Office, "H.R. 2, Repealing the Job-Killing Health Care Law Act," Feb. 18, 2011.

Washington Post, "Virginia Senate candidates can’t stop defense cuts," Sept. 19, 2012.

Washington Post’s The Fact Checker, "The battle over the health care bill," Jan. 13, 2011., "A ‘Budget-Busting’ Law?" Jan. 19, 2011.

Kaiser Family Foundation, "Data Note: Repealing the Affordable Care Act: Implications for Medicare Spending and Beneficiaries," Sept. 10, 2012.

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George Allen says ending Obamacare would save nation $1 trillion

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