Friday, March 16, 2012

CBO: Obamacare to cost $1.76 trillion over 10 yrs by Philip Klein - Washington Examiner

March 15, 2012

President Obama's national health care law will cost $1.76 trillion over a decade, according to a new projection released today by the Congressional Budget Office, rather than the $940 billion forecast when it was signed into law.

Democrats employed many accounting tricks when they were pushing through the national health care legislation, the most egregious of which was to delay full implementation of the law until 2014, so it would appear cheaper under the CBO's standard ten-year budget window and, at least on paper, meet Obama's pledge that the legislation would cost "around $900 billion over 10 years."

When the final CBO score came out before passage, critics noted that the true 10 year cost would be far higher than advertised once projections accounted for full implementation.

Today, the CBO released new projections from 2013 extending through 2022, and the results are as critics expected: the ten-year cost of the law's core provisions to expand health insurance coverage has now ballooned to $1.76 trillion.

That's because we now have estimates for Obamacare's first nine years of full implementation, rather than the mere six when it was signed into law. Only next year will we get a true ten-year cost estimate, if the law isn't overturned by the Supreme Court or repealed by then. Given that in 2022, the last year available, the gross cost of the coverage expansions are $265 billion, we're likely looking at about $2 trillion over the first decade, or more than double what Obama advertised.

UPDATE: I've done another post with additional details from the CBO report.


Jerry said...

The Cost of Obamacare Has Gone Down, Not Up
—By Kevin Drum| Thu Mar. 15, 2012 11:41 AM PDT

Republicans rushed to the microphones today to announce that new projections show that Obamacare will break the bank. In fact, says Fox News, a CBO reports says that it will cost "twice as much as the original $900 billion price tag."

You will be unsurprised to learn that this is not true. As Jon Cohn patiently explains here, the previous CBO report estimated the costs of expanded insurance coverage between 2012-21. The new report covers 2012-22. In other words, the new report includes an extra year compared to the previous one. That's the main reason that costs are higher.

In fact, CBO is quite clear on what an apples-to-apples comparison shows:

The current estimate of the gross costs of the coverage provisions ($1,496 billion through 2021) is about $50 billion higher than last year’s projection; however, the other budgetary effects of those provisions, which partially offset those gross costs, also have increased in CBO and JCT’s estimates (to $413 billion), leading to the small decrease in the net 10-year tally.

As Table 1 shows, if you compare the original 2012-21 time period, CBO's new estimate of the cost of Obamacare is $48 billion less than it was last year. (The report estimates only the cost of expanded insurance coverage under Obamacare, not the entire set of costs and revenues. So the total impact on the deficit hasn't yet been updated.)

Moral of this story: Never believe anything that Republicans say about Obamacare until you check out the source yourself. But you already knew that.

Tony GOPrano said...

Hey Jerry, CHEW ON THIS!