Fix Health Care Policy

Obamacare at Three Years: Increasing Cost Estimates

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Today marks three years since Obamacare was signed into law, and taxpayers probably aren’t celebrating.

Over the last three years, the Congressional Budget Office (CBO) has revised its cost estimates for Obamacare’s new entitlements—the Medicaid expansion and exchange subsidies—many times, and they have more than doubled since 2010.

The first estimate in 2010 pegged the gross cost at $898 billion from 2010 to 2019. But this projection was deceptive, because it included only six years of spending on these provisions, since they don’t begin until 2014.

However, CBO’s latest estimate in February 2013 provides a more accurate cost projection, finally encompassing 10 years of full spending. The 11-year estimate places spending on these provisions at $1.85 trillion from 2013 to 2023.

Read the rest on The Foundry…

Tags: CBO, cost estimates, exchange subsidies, higher than projected, Medicaid Expansion, ObamaCare, three years

Five Health Care Takeaways from CBO’s Report

The Congressional Budget Office (CBO) released its Budget and Economic Outlook for 2013–2023 today. Here are five major takeaways:

1)      Health care entitlement spending is bypassing all other spending. Spending on Medicare, Medicaid, Obamacare subsidies, and the Children’s Health Insurance Program will be greater than all other spending—including Social Security and defense spending: “Spending for major health care programs will be nearly 5 percent of GDP [gross domestic product] in 2013, and such spending is projected to grow rapidly when provisions of [Obamacare] are fully implemented by middecade, reaching 6.2 percent of GDP in 2023.”

2)      Obamacare still costs well over a trillion dollars. Obamacare is still projected to have a gross cost of over $1.6 trillion from 2013 to 2022—which only includes nine years of full implementation because the major provisions, exchange subsidies, and Medicaid expansion don’t begin until 2014. This spending should be stopped before it starts.

Read the rest on The Foundry…

Tags: bad policies, CBO, health entitlement spending, report, trillion dollars, uninsured

12 Days of Obamacare Surprises: Deficit Reduction?

Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next two days, Heritage is going to highlight one of the various changes in Obamacare projections (e.g., cost, enrollment, etc.) from when the law first passed until now.

Obamacare was passed into law under the guise that it would expand access to health coverage while simultaneously reducing the federal deficit.

In 2010, the Congressional Budget Office (CBO) estimated that Obamacare would result in deficit reduction totaling $143 billion from 2010–2019.

In 2012, the CBO estimated that Obamacare would result in deficit reduction totaling only $109 billion from 2013–2022, $34 billion less than in 2010. Among other updates, this is due to the rising costs of subsidies in the exchanges.

Surprise: The CBO lowered its deficit reduction projection by 24 percent, revealing that Obamacare will cost the American public far more than anticipated. Turns out, the best things don’t come in big, Obamacare-sized packages.

12 Days of Obamacare Surprises:

10. Unelected bureaucrats on IPAB…

9. Increased employer penalties…

8. More cuts to Medicare…

7. Loss of employer-sponsored insurance…

6. A 50/50 split on enrollment estimates…

5. More uninsured Americans…

4. Increased exchange subsidies…

3. Big tax increases…

2. The small business tax credit…

1. And the individual mandate.

Tags: "deficit reduction", CBO, Medicaid Expansion, Obamacare surprise, rising costs, subsidies

12 Days of Obamacare Surprises: Increased Employer Penalties

Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next four days, Heritage is going to highlight one of the various changes in Obamacare projections (e.g., cost, enrollment, etc.) from when the law first passed until now.

In 2014, Obamacare requires all businesses with 50 or more full-time employees to provide government-approved health coverage for their workers or pay a $2,000 penalty for each employee after the first 30 workers.

In 2010, the Congressional Budget Office (CBO) estimated that total penalties paid by employers from 2010–2019 would equal $52 billion.

In 2012, the CBO updated its estimate for penalties paid by employers from 2013–2022 to total $106 billion.

Surprise: Employers are now estimated to pay more than twice the amount in penalties compared to the original estimate. Too bad employers won’t be able to re-gift Obamacare’s mandate.

12 Days of Obamacare Surprises:

8. More cuts to Medicare…

7. Loss of employer-sponsored insurance…

6. A 50/50 split on enrollment estimates…

5. More uninsured Americans…

4. Increased exchange subsidies…

3. Big tax increases…

2. The small business tax credit…

1. And the individual mandate.

Tags: CBO, employer mandate, Obamacare surprise, penalties

12 Days of Obamacare Surprises: Uninsured Americans

Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next 8 days, Heritage is going to highlight one of the various changes in Obamacare projections (e.g., cost, enrollment, etc.) from when the law first passed until now.

One of Obamacare’s primary goals was to dramatically reduce the number of uninsured. To achieve this, Obamacare depends on a Medicaid expansion, new government subsidies funneled through exchanges, and an individual mandate to get people covered.

In 2010, the Congressional Budget Office (CBO) projected that Obamacare would insure 32 million non-elderly people by 2019, leaving 23 million non-elderly Americans uninsured.

In 2012, the CBO updated its projection to show that Obamacare would provide coverage for 36 million people through Medicaid and subsidized coverage in the government-run exchanges, leaving 30 million Americans uninsured in 2022.

Read the rest on The Foundry…

Tags: CBO, government-run exchange, Medicaid, ObamaCare, subsidized coverage, surprises, uninsured Americans

12 Days of Obamacare Surprises: Small Business Tax Credit

Photo: Mike Kemp/Tetra Images/Newscom

Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next 11 days, Heritage is going to highlight one of the various changes in Obamacare projections (i.e. cost, enrollment, etc.) from when the law first passed until now.

The Small Employer Health Insurance Tax Credit was intended to encourage employers to offer health insurance to their employees by partially offsetting the cost.

In 2010, the Congressional Budget Office (CBO) estimated that the Small Employer Tax Credit would cost the federal government $37 billion over 10 years.

In 2012, the CBO updated its estimate, projecting the credit would cost $23 billion over 10 years.

Read the rest on The Foundry…

Tags: CBO, higher costs, ObamaCare, small business, surprises, tax credit

How Obamacare Robs Medicare and Hurts Seniors

The rhetorical Medicare wars have heated up this week, after President Obama declared in his Saturday radio address that his proposed reforms “won’t touch your guaranteed Medicare benefits. Not by a single dime.”

This is incorrect. Obamacare cuts $716 billion from Medicare over the next 10 years, according to the Congressional Budget Office (CBO), and uses these “savings” from Medicare to fund other entitlement expansions mandated by Obamacare. Medicare becomes a cash cow for Obamacare, and the Medicare “savings” from payment cuts are not put back into making Medicare solvent. Such massive payment cuts do impact Medicare benefits, as well as seniors’ access to those benefits.

Heritage’s Alyene Senger explains how this hurts America’s seniors:

The impact of these cuts will be detrimental to seniors’ access to care. The Medicare trustees 2012 report concludes that these lower Medicare payment rates will cause an estimated 15 percent of hospitals, skilled nursing facilities, and home health agencies to operate at a loss by 2019, 25 percent to operate at a loss in 2030, and 40 percent by 2050. Operating at a loss means these facilities are likely to cut back their services to Medicare patients or close their doors, making it more difficult for seniors to access these services.

Read the rest on The Foundry…

Tags: $716 billion cuts, CBO, entitlement expansion, insolvent, Medicare Advantage, ObamaCare, repeal the law

CBO: Obamacare to Cover Millions Fewer Than Before Supreme Court Decision

Earlier today, the Congressional Budget Office (CBO) released an updated cost estimate for Obamacare that showed that the law will cost less over 10 years than last predicted—because fewer people will be covered.

Now, although Obamacare spends more than $1 trillion, CBO predicts it will leave 30 million Americans uninsured, falling far short of what was promised.

The reason for the changes to the law’s cost projection is the recent Supreme Court ruling. Though the Court allowed Obamacare’s individual mandate to stand as a tax, it deemed a separate provision—the Medicaid expansion—to be unconstitutional. As a result, states can choose not to expand their Medicaid programs and are no longer at risk of losing all their federal Medicaid dollars if they don’t. As Heritage health policy expert Nina Owcharenko explains, “If the Administration’s attempt to centralize health care decision making in Washington was unworkable, its unconstitutional imposition on the states has made its problems even worse.”

Read the rest on The Foundry…

Tags: CBO, deficit, ObamaCare, repeal the law, Supreme Court ruling, total cost, unconstitutional, uninsured

Chart of the Week: Obamacare’s Bundle of Budget Gimmicks

President Obama has touted reports from the Congressional Budget Office claiming his health care law would actually decrease the deficit. But due to a bundle of budget gimmicks and other legislation, calculations show that Obamacare actually adds $698 billion to the deficit. This week’s chart outlines each of those budget gimmicks.

“This morning a new analysis from the Congressional Budget Office concludes that the reform we seek would bring $1.3 trillion in deficit reduction over the next two decades. That makes this legislation the most significant effort to reduce deficits since the Balanced Budget Act in the 1990s,” Obama declared two years ago.

(Read the rest on The Foundry…)

Tags: Balanced Budget Act, CBO, chart, deficit, Federal Budget in Pictures, health care law

Another Obamacare ‘Glitch’ Will Add Billions to the Deficit

A new report from Cornell economist Richard Burkhauser and his colleagues has once again called into question the claims of the Congressional Budget Office (CBO) and White House that Obamacare would have only a minimal impact on employers’ decisions to offer their employees health care. The report warns that Obamacare could cost at least $50 billion more per year than originally thought.

The controversy centers on the “firewall” provision in the health law, which applies to employer plans with premiums equaling more than 9.5 percent of a worker’s income. If a worker would have to pay more than this amount to buy qualified health coverage from his employer, then that coverage is deemed “unaffordable,” which makes him eligible to obtain subsidized health insurance in the newly established health exchanges starting in 2014.  (Read the rest at The Foundry…)

Tags: CBO, deficit, employer-sponsored insurance, firewall provision, ObamaCare, qualified health coverage