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A funny thing has happened on the way to the implementation of Obamacare, aka the Patient Protection and Affordable Care Act (ACA): it’s become much less affordable. When the law was passed in 2010, the Congressional Budget Office (CBO) estimated it would cost $940 billion over a ten year period. The new estimate? $1.76 trillion.
But it gets even better. A year ago, the CBO estimated that one million workers would no longer get insurance coverage from their employers when the healthcare law was fully implemented. That estimate has now been revised as well. By 2016, the CBO now projects that 4 million fewer people will be getting their healthcare covered by their employer. Furthermore, the overall number of currently uninsured people who would be covered by the new law has been reduced from 32 million to 30 million. And, in an ironic twist, because the law provides many people with partial, rather than comprehensive coverage, the number of non-elderly legal residents forced to obtain supplemental insurance policies will rise from 82 percent in 2012, to 93 percent in 2022.
None of this surprises those who warned that the original cost estimates of the healthcare bill were little more than Enron-like accounting gimmicks. The most egregious of those gimmicks was to delay the full implementation of the law until 2014, while using a combination of tax increases and Medicare cuts beginning with the law’s passage in 2010 to fund it. Since CBO projections are based on ten-year estimates, the original $940 billion price tag reflected ten years of payments for only six years of coverage.
The CBOs new projections cover the years 2013 extending through 2022, when the true cost of the plan can no longer be obscured. And this number only reflects nine years of projections. Americans must wait until next year to get a true ten-year cost estimate, assuming the law survives the Supreme Court or repeal by Republicans should they attain a congressional majority and the White House. Since the cost projection in 2022 currently stands at $265 billion, one can assume that the cost of the plan in 2023 will be at least that high. Add $265 billion to $1.76 trillion and the real cost of the healthcare plan nears $2 trillion over the course of a decade.
Furthermore, these are only big-picture projections. The CBO also projected an increase of $168 billion in Medicaid compared to its projection a year ago, coupled with $97 billion less spent on subsidies for people to purchase insurance on government-run exchanges, and $20 billion less on tax credits to small employers. This represents an overall increase of $51 billion over last year’s CBO estimates. Yet the CBO is still projecting the plan will cost $48 billion less from 2012 to 2021.
Why? Because government expects to collect the $99 billion necessary to reach those savings via a one-two combination of fines and tax hikes. The fines will be imposed on both people who refuse to abide by the individual mandate forcing them to buy coverage, and the aforementioned employers who will drop coverage for their employees. The tax hikes will be imposed on all Americans who pay taxes.
The CBO report also reveals why they felt the adjustments were necessary. Chief among them were a “macroeconomic forecast published in January 2012, which reflects a slower recovery when compared with the forecast published in January 2011,” and ”updated projections of the growth in private health insurance premiums, reflecting slower growth than the previous projections.” The former estimate reflects the reality that the Obama administration’s Keynesian-inspired economic plan that has consisted of running up more debt more quickly than any administration in our nation’s history is largely a bust.
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