Obamacare Costs Additional $50 Billion a Year More Than Predicted, Based on Yet Another False Assumption in Calculating its Costs
“Federal payments required by President Barack Obama’s health care law are being understated by as much as $50 billion per year because official budget forecasts ignore the cost of insuring many employees’ spouses and children, according to a new analysis. The result could cost the U.S. Treasury hundreds of billions of dollars during the first ten years of the new health care law’s implementation,” notes the Daily Caller. “The Congressional Budget Office has never done a cost-estimate of this [because] they were expressly told to do their modeling on single [person] coverage,” and “the Joint Committee on Taxation directed the Congressional Budget Office to ignore family members when determining whether employees actually pay more than 9.5 percent of their household income on insurance” and thus qualify for government subsidies.
This is just the latest of many ways that Obamacare has been discovered to cost more than predicted. Earlier, the CBO hiked its estimate of Obamacare’s costs by $115 billion, showing that the health care law would not, in fact, cut the deficit as promised. Later, it became apparent that the cost estimate for Obamacare had been artificially reduced through double-counting of revenues.
Then, it became apparent that the cost of Obamacare’s Medicaid expansion provisions had been radically underestimated. It turned out that its Medicaid expansion provisions, in addition to covering many poor or near-poor people, could also add up to five million early retirees to state Medicaid rolls. That financial risk was overlooked in the Medicaid actuary’s earlier estimate. As he conceded in January 2011, that “estimated increase in Medicaid enrollment is based on an assumption that Social Security benefits would continue to be included in the definition of income for determining Medicaid eligibility. If a strict application of the modified adjusted gross income definition is instead applied, as may be intended by the Act, then an additional 5 million or more Social Security early retirees would be potentially eligible for Medicaid coverage.” More recently, he said the stricter standard was “expected” to apply under the 2010 healthcare law, causing “significantly higher” Medicaid costs for states. See True Cost of PPACA (Patient Protection and Affordable Care Act): Effects on the Budget and Jobs (March 30 testimony to Congress).
Obamacare is also harmful to the economy, medical innovation, and the healthcare system. Earlier, I discussed some of the bad effects of Obamacare on patients, employers, consumers, and the insurance market. I filed an amicus brief on behalf of state legislators explaining why Obamacare is unconstitutional under the Tenth Amendment and exceeds Congress’s power under the Commerce Clause.