Two years ago, Congress debated and passed the Obamacare bill. It was slapped together with a myriad of side deals and compromises in order to get enough Democratic members of the House and Senate to pass it. No one had read the 2000-page monstrosity, but that didn’t matter. At that time, Speaker Nancy Pelosi uttered words that would prove prophetic: “We have to pass the bill so that you can find out what’s in it.”
Over the past two years, Americans have found out some of the details of the bill and don’t like it. Despite the fact that President Obama said “the plan I’m proposing will cost around $900 billion over 10 years,” it is proving to be far more costly.
Further, with additional smoke and mirrors budget gimmicks, it was declared to actually reduce the deficit by $143 billion over 10 years. That required that the spending be offset with a variety of tax hikes and $500 billion in cuts to Medicare benefits.
The smoke is clearing and the mirrors are all cracked. Upon closer examination of the opaque Obamacare bill, the image isn’t pretty.
Instead of costing $940 billion over 10 years, the Congressional Budget Office (CBO) recalculated the cost of Obamacare and found that the cost will almost double to $1.76 trillion over 10 years. That new estimate has gobbled up most of the expected savings Congress was to achieve under the sequestration required by the Budget Control Act when the super committee failed miserably to address the deficit.
Another smoke screen raised by President Obama was his promise that you will be able to keep your doctor under his health-care reform. With the smoke cleared, CBO now says that 4 million will lose their employer-provided health insurance as Obamacare forces businesses to end coverage for their employees. These unfortunate casualties of Obamacare will be forced into the government’s insurance exchanges or forced into Medicaid or CHIP.
However, the government-run insurance exchanges are a murky area too. Both CBO and the president’s own budget people have seen the expected cost of the subsidies to these exchanges balloon enormously this year.
The House Ways and Means Committee has repeatedly questioned the Obama administration as to why this year they have requested significant new funding for the costs for the exchanges. Over the past year, Congress enacted technical changes that CBO said would reduce spending on the subsidies for the exchanges by $9 billion. Yet President Obama now says he will need $111 billion in new funding for the exchanges. No clear justification has been given for this new request.
Millions of Americans would have already lost the coverage they were promised they could keep except for a massive number of waivers to Obamacare granted by HHS Secretary Kathleen Sebelius under authority which does not exist in the law. More than 1400 waivers have been granted covering millions of Americans. Millions of union members who supported President Obama received a waiver to protect them from Obamacare’s harmful effects.
CBO did have a smidgeon of good news for taxpayers. The tax credits for small businesses to help them to continue to offer health insurance to their employees will only cost about half as much as previously expected. But this is because the rules to qualify for the tax credit are too costly and too complex that CBO now believes lots of these small employers will give up trying to get the tax credit. It is easier and cheaper for them to cancel the insurance for their employees and pay the new mandatory fine instead.
There is another reason for the massive hike in the costs of Obamacare according to the CBO. This reason cracked a mirror used to distort the reality of its costs. It points out the failure of the stimulus bill to stimulate the economy as it was billed.
In the new CBO cost analysis, “the unemployment rate is higher throughout the projection period than it was in last year’s forecast. CBO also now estimates that wages and salaries will be lower than it previously anticipated.” That means that since the economy is so bad, Americans will be forced to receive health care differently than previously forecast with a good economy.
Thus, some people who would not be eligible to receive the subsidies from the exchanges are now expected to qualify in the worse economic environment. Further, some who would have received subsidies from the exchanges are now expected to qualify for Medicaid or CHIP in the worse economic environment.
With the dim economic prospects of more unemployment and lower salaries expected over the next decade, more people will be pushed into Medicaid and CHIP. This will cost those programs an additional $168 billion. Keep in mind that this is only the federal share that CBO scores. States will have to match those costs with even more of their own state tax dollars.
Remember that the official title of the Obamacare bill is the Affordable Care Act. Rather than attack any of the problems that are driving up the cost of providing health care in this county, Obamacare created a massive new bureaucracy that is making health care more costly and unaffordable for all. If you still have employer-provided health insurance, you’ve seen your rates increase significantly despite all the happy talk of the politicians.
Unfortunately for former Speaker Nancy Pelosi, the more we find out about the Obamacare bill, the less there is to like about this costly and intrusive mess.