The majority of this "lost revenue" or "increased deficit", according to the CBO study, stems from the anticipated collection of fines levied against those employers who don't comply. The PPACA forces any employer with over 50 full-time employees (over 30 hours a week) to provide health insurance for its employees.
[T]he net cost is now estimated to be $1,375 billion—$12 billion more than previously estimated. The largest change is a $10 billion reduction in penalty payments by employers that would have been collected in 2015. (Penalties assessed for 2014 would have been collected in 20< 15.) Costs for exchange subsidies are expected to increase by $3 billion.
Many companies conducted the cost-benefit analysis and determined that the fines are significantly less than the increased costs of human capital (labor). The CBO takes those studies into consideration. The law's implementation plan included an estimated amount into its calculations of the costs to the federal government.
Without the "employer mandate", the CBO also estimates that many lower-income full-time employees won't be able to afford private, individual healthcare plans. They will likely end up using Medicaid, CHIP, and other taxpayer-funded subsidies to fill the gap. That will add to the deficit as well.
Should the individual mandate also be delayed, much of the taxpayer-funded costs will reduce, though. Citizens who cannot afford their healthcare programs but make just over the Medicaid and CHIP thresholds will not scramble to attempt to pay for a plan they cannot afford. While this will also reduce fines, it will leave some disposable income that will be spent on goods and services. That will keep the individual mandate frm harming the economy. That will keep private industry revenues up. That keeps payroll taxes up. That keeps capital gains revenues up. That keeps sales, excise, and other tax revenues up.
Of those who would otherwise have obtained employment-based coverage, roughly half will be uninsured and the others will obtain coverage through the exchanges or will enroll in Medicaid or the Children’s Health Insurance Program (CHIP), CBO and JCT estimate. In particular, fewer than half a million additional people are expected to be uninsured in 2014 than the number projected in the May baseline.
The other considerations the CBO report did not appear to calculate (or estimate) were the potential losses from enacting the employer mandate. Our economy is already seeing the effects. The U3 unemployment rate has dropped, slightly. The Workforce Participation Rate has edged up slightly. It has not been good news, though. It is the labor market adjusting to changes due, in part, to the PPACA. Employers are converting two full-time positions to three part-time jobs, restricting employees to approximately 25 hours a week. While this employs more people, it does so in a way that reduces the number of employees a company or employer must provide healthcare.
For example, a large, independent restaurant normally runs two shifts (lunch and dinner) six days a week. It amounts to 65 or so employees, 55 of them at full-time (8 hours by 4 days a week -- 32 hours). Now they reduce hours, increase overall jobs to 80, and restrict all but 5 of them to 4 six-hour shifts a week. The employer mandate does not apply. They pay no fine or fee. The workers see a decrease in income.
Decreased income means less money spent on goods and services. It means lower profits. It means lower tax revenues from income taxes, excise taxes, payroll taxes, capital gains taxes, and sales taxes. Apply this to all food service and retail companies.
The tax base decreases. Increasing any other tax rates, such as income taxes in higher brackets, will further decrease the tax base. That will drastically decrease revenues. The cost is likely to be well beyond the $12 Billion the CBO estimated the delay would cost.
Perhaps the CBO (and some really smart economists) should do a few studies on this effect and amend this latest CBO report accordingly.