Obamacare: CBO Latest Findings

Posted by Tina

CBO has released a new revised report on the economics and cost of Obamacare. Left media has found lots to be happy about but as usual they cherry pick the facts to make Obamacare seem wonderful.

Daily Mail finds the rotten cherries:

Stunning figure comes from Congressional Budget Office report that revised cost estimates for the next 10 years

Government will spend $1.993 TRILLION over a decade and take in $643 BILLION in new taxes, penalties and fees related to Obamacare

The $1.35 trillion net cost will result in ‘between 24 million and 27 million’ fewer Americans being uninsured – a $50,000 price tag per person at best

The law will still leave ‘between 29 million and 31 million’ nonelderly Americans without medical insurance
Numbers assume Obamacare insurance exchange enrollment will double between now and 2025

So the subsidies people get will cost taxpayers $50K PER PERSON! (Redistribution: There’s no free lunch)

And the promises about the overall costs were grossly low, as noted by the GOP back in 2012:

PROMISE: In 2009, Obama Promised That ObamaCare Would “Cost Roughly $900 Billion, 800 To 900.” OBAMA: “Now, what I’ve proposed is going to cost roughly $900 billion, 800 to 900. That’s a lot of money. Keep in mind it’s over 10 years. So when you hear some of these figures thrown out there, this is not per year; this is over 10 years. So let’s assume it’s about $80 billion a year. It turns out that about two-thirds of that could be paid for by eliminating waste in the existing system.” (President Barack Obama, Remarks At A Town Hall Meeting, Grand Junction, CO, 8/15/09)

BROKEN: Congressional Budget Office: ObamaCare’s Coverage Provisions To Cost $1.68 Trillion By 2022, Nearly Double What Obama Said It Would Cost.

CBO now estimates the cost for Obamacare is up at $1.993 TRILLION over a decade.

The really bad news is that these reports, which are at best a guess, are found to be notoriously wrong when we look back in the out years covered by the report, so the projected 10 year amount of $1.993 Trillion will probably be incredibly low in 2025 as we look back.

This program will add to the nations debt just as Social Security and Medicare do year after year.

This entry was posted in Health and Medicine. Bookmark the permalink.

6 Responses to Obamacare: CBO Latest Findings

  1. Post Scripts says:

    We keep hearing about the nations debt, but most Americans can’t even tell you who the first president was, so I doubt they are paying attention to the debt. All they know is what they want and they want something for nothing, you know, Obama dollars. When we go broke, and we surely will, is the first day they will care about this debt. Until then, forget it. They’ll keep voting in those who promise them stuff.

    The democrats in high office aren’t stupid, they understand the debt crisis as well as anyone, even republicans, but they are just trying to hold it together long enough get theirs. This is another case of “I got mine – screw you. Game over.”

  2. Chris says:

    Once again, when you choose to trust a tabloid rag for the truth you just embarrass yourself with lies. Health experts from across the political spectrum called out the Daily Mail’s fabricated “$50 million per person” charge:

    Pulling that off will cost Uncle Sam about $1.35 trillion – or $50,000 per head.

    The basic math is correct. Divide $1.35 trillion by 27 million people and you get $50,000.

    But health policy analyst Joe Antos at the American Enterprise Institute, a free-market oriented think-tank in Washington, told PunditFact that the number is meaningless.

    “You can’t divide a 10-year spending number by the average number of people who are newly insured,” Antos said. “That’s not the way it works.”

    We heard the same comment from Christine Eibner, a RAND health care economist.”It is analytically problematic to compare a single-year estimate of the change in the uninsured population to a 10-year projection of the costs,” Eibner said.

    Economist Jeffrey Clemens at the University of California-San Diego called the original calculations “a bit of a mess.”

    Antos said the CBO would never do such an analysis itself because the “two numbers don’t relate to each other.” One is a running total over a decade and the other is a snapshot of the number of people who gained insurance in a single year, over and above what the CBO would expect without the Affordable Care Act.

    “Just because you can divide one number by another, it doesn’t mean anything,” Antos said. “Good arithmetic doesn’t count when it’s based on bad logic. Obamacare is expensive and inefficient, but this doesn’t prove that.”

    Donald Marron is director of economic policy initiatives at the Urban Institute and former acting head of the CBO. Marron pointed out another issue with the calculation in the Daily Mail. The flows of people in and out of insurance coverage are complicated. While millions of people might sign up through the Affordable Care Act exchanges, millions are expected to fall away from getting coverage through their employers or on the individual market. The 27 million used by the newspaper article was a net figure.

    “The number of people helped will be something like 40 million,” Marron said. “That includes the exchanges and Medicaid and CHIP (children’s health insurance). These are the people newly helped by the coverage.”

    Marron also noted that you would want a way to factor in the years that these people are helped, but regardless, spreading the costs across 40 million people would drive down the cost for each individual covered.

    Our ruling

    Varney said that it will cost taxpayers $50,000 per enrollee in Obamacare over the next 10 years. This seems to come directly from an article in the Daily Mail.

    None of the health care experts we reached, regardless of their economic philosophies or thoughts about the health care law, found any merit in the math that produced this figure. It’s most glaring defect is that it compares a 10-year cumulative total to a single-year snapshot of the number of people who gained insurance.

    Any analysis that accounted for the years of coverage people gained would yield a dollar figure considerably less than the $50,000 cited by Varney.

    We rate the claim False.

    http://www.politifact.com/punditfact/statements/2015/jan/28/stuart-varney/will-aca-cost-50000-enrollee/

    You also left out the very important fact that the CBO report estimated that the ACA will cost 20 percent less than originally predicted.

    I’ve never seen such a concerted effort to ignore good news and spin success into failure. The right wing has gone beyond hoping Obama fails and is now actively rooting for the failure of America under Obama.

  3. Tina says:

    Oh please Chris, yours is the Party OF SPIN!

    Lefties won’t tell you that the cost savings is due to the fact that lower-than-expected enrollments, resulting in lower than expected subsidies, or that going forward CBO expected that, “enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) will continue to increase.”

    Here’s five “takaways”:

    1. Obamacare provisions related to health insurance will cost the federal government $571 billion through 2019, a 20-percent reduction from the CBO’s projections in 2010.

    2. Up to 10 million Americans will lose employer-based coverage.

    3. Beginning in 2018, up to 16 million more Americans will have health insurance coverage through Medicaid and the Children’s Health Insurance Program (CHIP).

    4. Medicaid and CHIP will cost the federal government $59 billion more than previously estimated.

    5. About 31 million people will remain uninsured by 2025.

    The concerted effort to ignore bad news is greater!

    The concerted effort to fool the American people is what really stinks!

    When Democrats were reverse-engineering the health care law to meet Obama’s pledge that it would cost “around $900 billion,” one of the accounting tricks they used was to delay the enactment of the major spending provisions until 2014, to make the legislation appear cheaper over the CBO’s 10-year budget window (which at the time ran from 2010 through 2019). Today, the CBO released its updated budget and economic outlook that includes three additional years. Though the report doesn’t isolate the cost of Obamacare, it contains countless examples of how the law will put pressure on the budget.

    As demonstrated by this chart, overall, spending on federal health care programs will more than double, from $847 billion, or 5.5 percent of GDP, in 2012, to $1.8 trillion, or 7.3 percent of GDP, by 2022. Notice the spike starting in 2014, when Obamacare’s major spending provisions are scheduled to take effect.

    It’s true that a combination of health care inflation and the retirement of baby boomers would have driven up spending over the next decade no matter what. But Obamacare (formally known as the Patient Protection and Affordable Care Act) still made things worse.

    Some highlights from the CBO:

    — Obamacare’s expansion of Medicaid eligibility will make the program far more costly: “Spending for the program will climb again in 2013 and will shoot up rapidly in 2014, 2015, and 2016 as a result of provisions in the Affordable Care Act. By 2022, under current law, federal outlays for Medicaid are expected to total $605 billion, more than twice the 2012 amount; spending will equal about 2.5 percent of GDP, compared with 1.7 percent this year.”

    — Obamacare’s insurance exchanges and additional provisions will drive up the costs of other health care programs: “In addition to Medicare and Medicaid, the federal government operates other programs through which it subsidizes the provision of health care…Provisions in the Affordable Care Act will significantly increase the scope and scale of such benefits in the coming decade. In CBO’s baseline projections, federal spending for mandatory health care programs other than Medicare and Medicaid rises from $26 billion this year to $161 billion in 2022.” In the decade from 2013 to 2022, the cost of the exchanges alone will total $645 billion.

    — Obamacare will help make the Medicare prescription drug benefit more expensive: “(F)ederal spending per beneficiary for Part D will double, largely because of a combination of rising drug costs and the more generous benefits enacted in the Affordable Care Act.”

    — The CLASS Act, which was responsible for half of the deficit reduction in Obamacare at the time of passage, will no longer produce revenue because it was suspended: “In its August 2011 baseline projections, the agency anticipated that the CLASS program would begin collecting premiums in fiscal year 2012 and that net receipts from the program between 2012 and 2021 would total $76 billion. In the absence of that program, the government will not receive that income.”

    Defenders of Obamacare’s finances will argue that the legislation ends up reducing the deficit due to a combination of Medicare cuts and tax increases Yet as I noted last week, even if those policies go into effect as planned, nearly all the money raised will be used to pay for the new Obamacare entitlements rather than deficit reduction. Today’s CBO report reinforces the fact that Obamacare dramatically drives up spending and adds to our long-term debt obligations.

    “The right wing has gone beyond hoping Obama fails and is now actively rooting for the failure of America under Obama.”

    Ha! The left wing is doing back flips trying to find a way to blame the right wing for the last eight years of Democrat control (yes 8, Pelosi took the house two years before Obama came on board with a super majority.)

    Did they take up the cause of the crashed economy, jobs and seeing Americans back on their feet again as Bush did after the Clinton tech bubble burst and 911?

    He77 no, they cheated a bill through Congress to give us half-$$ed healthcare and meanwhile our prospects for jobs and a vibrant economy have been blunted and creating increased poverty rates.

    It is amazing how you on the left can stand in a pile of dung and pretend it’s pure gold.

  4. Chris says:

    How much of the lower-than expected enrollment is due to the disinformation campaign waged by the right, which actively discouraged Americans from getting insured?

    Many of the 10 million who will lose employer coverage will do so voluntarily:

    Those who lose that coverage won’t all be joining the ranks of the uninsured or the unemployed, though. Many are expected to shift into the health insurance exchanges being set up under the Affordable Care Act. The number of people participating in those exchanges is projected to grow from 7 million in 2014 — the first year they’ll be available — to 24 million in 2016.

    The CBO’s forecast revision was prompted by a change to the tax laws under the fiscal cliff deal in January, which made the Bush tax cuts permanent for all but the wealthiest Americans. The CBO had previously crunched the numbers thinking that tax rates would rise for everyone.

    Since employer-provided health care insurance is not taxable, the CBO’s theory is that the benefits aren’t as valuable when tax rates are lower, said James Klein, president of the American Benefits Council, a trade association for large employers. So some workers — particularly lower-income folks — may find it more desirable to forgo their employer’s coverage and seek insurance in the exchanges, where they may be eligible for a subsidy.

    http://money.cnn.com/2013/02/08/news/economy/employer-health-insurance/

    Both conservatives and liberals have urged delinking health insurance from employment for years.

    The fact remains that the CBO estimates that the law will reduce the deficit while insuring millions more Americans than in the previous system. You can’t just highlight the costs while ignoring all the revenue gains. And you can’t cite the CBO when it’s convenient, twisting its conclusions to produce lies like the “$50 million per person” thing, and then ignore what it says when it has good news you don’t like.

    The law is here to stay. The Republicans who are campaigning on repeal are playing you. By 2016 the law will have helped insure millions more people and will continue to gain popularity. On the off chance you manage to get a non-crazy Republican who is able to conceal his contempt for the lazy poors long enough to actually win a presidential election, the law is STILL unlikely to be repealed due to changing public support.

    It’s time for the right to start talking about ways to reform the law and make it better rather than how you can sabotage it with lies.

  5. Tina says:

    Chris given this piece of crap legislation was written in closed door meetings, passed using intimidation and bribery and sold to the public with a pack of lies you don’t really have a leg to stand on with this pathetic complaint.

    The right just got a voice. So your impatience is also off base, especially given the attitude of the Imperial President!

    Stay tuned; an alternative bill is coming.

    I don’t have a problem de-linking health insurance from employers. I strongly believe health care and insurance costs would come down if companies and providers had to answer to the customer/patient.

    Please keep in mind that unions has a lot to do with making that link in the first place. it was one of the demands of collective bargaining. To compete, companies that did not have union workers started offering the perk. It makes more sense to me to give the employee the money and put the power and choice back in his hands.

    I doubt very seriously that anyone would make a health insurance decision based on politics…you’re reaching, and resentful. All I can say is I get it. Your party has been playing the game this way for decades and during most of it had the media in their pockets.

    I don’t know what prompted the figure. The persons you cite to dispute it guessed so their evaluation could be totally bogus left wing spin for all I know.

    It’s time for the left to give up Alinsky and be more honest with the American people.

    Forbes has an article about one Republican replacement plan under consideration.

    Please keep in mind that anything put forth will go through debate and Democrats will have a chance to participate. in both chambers so changes in this proposal would likely occur.

  6. Tina says:

    Oh and Avik Roy over there at Forbes says the conservative base (Tea Party) might not be aware that medicare is subsidized.Shows you what a bang up job the left has done demonizing the TP. I’d bet most of us have been calling for reforms to this and the SS program for decades because the government cannot afford the subsidies without charging very high tax rates for future generations or racking up piles of debt that the interest alone makes unsustainable.

Comments are closed.