Obamacare Bombshell: Was Cost Underestimated By Hundreds Of Billions Of Dollars?
Over at Forbes, Avik Roy asks whether the cost of Obamacare was underestimated by some $500 billion dollars. Roy looks at a paper published by the National Bureau of Economic Research that shows the number of employers dumping their insurance under Obamacare could be significant. In a worst-case scenario, they found that the number of folks covered by Obamacare's subsidized exchanges could be more than double the estimates of the Congressional Budget Office and Joint Commmittee on Taxation:
It all comes down to the tweak used by the Joint Committee to give the new health law a favorable fiscal score. To put it simply, the Joint Committee purposely interpreted the law to define "unaffordable" (read: available for subsidy) coverage as a self-only policy for an individual worker, in which premiums exceed a certain percentage of household income. The difference is significant, to say the least. Roy writes:
This tweak isn’t just a problem for conservative opponents of Obamacare, but also for its liberal advocates. If the JCT interpretation is correct, then millions of people who thought they were gaining coverage under the law—spouses and dependents of employed Americans—won’t. If the JCT is wrong, the CBO’s estimates of PPACA’s exchange costs are way too low. Increasing the law’s costs will upset conservatives, but decreasing the law’s coverage expansions will upset progressives. Congress needs to get to the bottom of this.
This grenade may end up exploding in Kathleen Sebelius’ hands, because Sebelius will have to issue regulations that clarify these provisions. Says Burkhauser, “This is the dilemma. If the HHS Secretary decides that they really did mean single coverage, then you’re going to have several million [people who aren’t going to get coverage under the law]. The family’s [breadwinner] is given affordable coverage, but the families can’t get onto the exchange rolls. This is going to be unpopular.”
Roy had previously covered the news that industry analysts were predicting that employer plans were going to be dumped onto the exchanges at higher than planned rates. This could explain why.
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Mar '11
Re: Obamacare Bombshell: Was Cost Underestimated By Hundreds Of Billions Of Dollars?
Wouldn't the real news be if there was a federal program somewhere, anywhere that actually came in at or under it's estimated costs?
Mar '11
Re: Obamacare Bombshell: Was Cost Underestimated By Hundreds Of Billions Of Dollars?
But, but - Mr Obama was perfectly clear - the cost curve will be bent down, and if we like our current healthcare we can keep it.
Oh, and Joe Wilson was right.
Mar '11
Re: Obamacare Bombshell: Was Cost Underestimated By Hundreds Of Billions Of Dollars?
But, but - Mr Obama was perfectly clear - the cost curve will be bent down, and if we like our current healthcare we can keep it.
Oh, and Joe Wilson was right.
Mar '11
Re: Obamacare Bombshell: Was Cost Underestimated By Hundreds Of Billions Of Dollars?
May '10
Re: Obamacare Bombshell: Was Cost Underestimated By Hundreds Of Billions Of Dollars?
At this point, a few hundred billion dollars is the difference between, "We really, really cannot afford PPACA" and, "We really, really, really cannot afford PPACA."
Hopefully voters don't lose interest in this clear pattern with Obamacare: whatever feel-good merits Progressives insist the bill has, a good thing is no good if it's impossible. As Roberto noted, this wouldn't be the first federal program that cost far more than advertised (though Medicare Part D has actually been less to date, if I'm not mistaken).
Jul '10
Re: Obamacare Bombshell: Was Cost Underestimated By Hundreds Of Billions Of Dollars?
In the let's pretend world of the 111st Congress the CBO scoring was handed a farcical set of assumptions to make Obamacare look affordable, including a double count of $500B Medicare "savings" that were expected to be nullified quietly in later votes anyway. The great pageant is supposed to unfold with the unwashed masses begging Obama and the Democrats to tax those mean old rich people to make up the difference. That is the vile dishonesty at the root. (Those mean old rich people who came here from Europe and Asia to escape ridiculous tax bills for laughable government "services" and to gain access to a healthcare market rather than the abattoir that is government managed healthcare elsewhere.)
Having spoken to some of those people, their plans and contingencies to move on to the next stop are already in place. Leaving Obama alone with his Tea Party and his ridiculous Obamacare albatross.
But we can always print more money. That wouldn't be defaulting at all. On every man, woman, and child holding a rapidly diminishing greenback. Inflation has always been a default in any meaningful sense.
Obamacare delenda est.
Jul '11
Re: Obamacare Bombshell: Was Cost Underestimated By Hundreds Of Billions Of Dollars?
The whole bill was a fiasco from the start with everything that is wrong with medical costs getting a slice of the pie to sign on. All that mattered to the progressives was government control. All that mattered to crony capitalist industries was getting their foots in the door as beneficiaries of largesse.
Aug '10
Re: Obamacare Bombshell: Was Cost Underestimated By Hundreds Of Billions Of Dollars?
Jason Heart said: "though Medicare Part D has actually been less to date, if I'm not mistaken"
The only saving grace of Medicare Part D was the 'donut hole', which was designed into the program as a cost containment measure. Once seniors got to a certain amount of government-supported drug spending, they were responsible for paying for drugs themselves, unless they reached an even higher threshold at which point the government would take over again. The area between those two points of government coverage was the 'donut hole'.
The main effect of this was to make seniors think about containing drug costs even during the first period where the government was picking up the tab, in order to keep the total cost below the donut hole threshold. And it worked - the use of generics went up 8% after that law was passed.
Of course, the Democrats described this feature as a 'glaring error in Medicare Part D' and closed the donut hole as part of the new health care bill - thus destroying any cost containment. They 'bent the cost curve' alright.. They bent it upwards.
Jun '10
Re: Obamacare Bombshell: Was Cost Underestimated By Hundreds Of Billions Of Dollars?
Obamacare included a provision to nationalize student loans. It didn't include the Medicare "doc fix" - an adjustment to the the reimbursements doctors get under Medicare. Why did Obamacare include student loans which have nothing to do with health care? And why did it NOT include the doc fix? Simple: they were cooking the books. The student loan provision was scored as adding $60 billion to the Treasury. The doc fix costs roughly $240 billion. The day the president signed the bill it was hundreds of billions of dollars in the red. And since then the news has only gotten worse.