What Could Possibly Go Wrong? The Economic Case for Health Care Reform(circa 2009)*
- Health care reform would increase real gross domestic product (GDP), relative to the no-reform baseline, by over 2 percent in 2020 and nearly 8 percent in 2030.
- The beneficial impact on employment in the short and medium run (relative to the no-reform baseline) is estimated to be approximately 500,000 each year that the effect is felt.
- Expanding health insurance coverage to the uninsured would increase net economic well-being by roughly $100 billion a year, which is roughly two-thirds of a percent of GDP.
* Council of Economic Advisers
Today’s Presentation
- How we model the economic effects of tax and subsidy changes.
- The economic effects of repealing the taxes and subsidies provided for by the ACA.
- Effects on key economic indicators.
- Revenue effects
The NCPA DCGE Model
- Dynamic: Future economic conditions respond to current-period policy changes through a dynamic optimization process by households and firms.
- Computable: The model utilizes computer algorithms that make it possible to solve a system of nonlinear equations.
- General Equilibrium: Prices adjust to a policy changes across all sectors to equate supply and demand.