During her testimony to the Senate Banking, Housing, and Urban Affairs Committee, Federal Reserve Chair Janet Yellen outlined the potential economic impact of a repeal of the Affordable Care Act (ACA), better known as Obamacare.

When asked by Democratic Sen. Bob Menendez about the effect of the recent budget resolution passed by Republicans that would repeal significant parts of the ACA on the broader US economy Yellen said, "We would have to look at what the shifts in healthcare have on the economic outlook."

She continued, "Healthcare, as you mentioned, does account for a very significant share of spending and a loss of access to health insurance could have a significant impact on spending of households for other goods and services. Beyond healthcare itself, it could have impacts on the economy."

Over the past two years, healthcare spending as a percentage of GDP increased at a level usually seen during recessions according to the Centers of Medicare and Medicaid Services, and out of pocket costs for Americans have been climbing at a rapid pace.

While this shift may already be restricting discretionary spending, as Yellen notes, a sudden loss of insurance could cause households to shift even more household spending away from discretionary goods and services and towards healthcare.

Yellen went on to say that the increase in health coverage and access to insurance under the ACA has helped improve the labor market.

"In addition, access to healthcare for some individuals has likely increased their mobility and diminished the phenomenon called job lock where people are afraid to leave jobs because of losing health insurance and that could have implications for the labor market as well that we would try to evaluate," said Yellen.

While these issues could be mitigated by a possible replacement plan offered by Republicans, Yellen made it clear that a large overhaul of Obamacare could have implications for the entire US economy.