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  • New CBO Report Proves We Cannot Afford Obamacare

    Last week, the Congressional Budget Office released its report on H.R. 2, the House-passed legislation that would fully repeal Obamacare. The takeaway message was that American taxpayers simply cannot afford Obamacare.

    CBO’s initial scoring of Obamacare analyzed its effects from 2010 to 2019, including only six years of full implementation, since main spending provisions do not go into effect until 2014. The new document reports on 2012 to 2021, including an additional two years of full implementation. This still fails to show the true 10-year cost of the law, but gets a little closer. Over eight years, the gross cost of Obamacare’s coverage provisions jumps from $938 billion to $1.39 trillion, which includes $677 billion to create a new health entitlement offering generous subsidies to the middle class to purchase health insurance.

    It also includes an expansion of Medicaid, which will cost $674 billion. Initially, the federal government will almost entirely fund the expansion, but will pass costs on to the states starting in 2020. This will have serious consequences, as states already face tough choices to tackle mounting deficits. The combined increase in states’ Medicaid costs will be $60 billion. CBO’s initial score showed the Medicaid expansion costing states just $20 billion. The addition of just two extra years increased this number threefold, revealing the crippling effect the expansion will have on state budgets.

    Obamacare proponents say the new law cuts the deficit. But the CBO report pulls the mask off the bill and reveals what it really is: a massive tax increase that, on paper at least, is slightly greater than the massive spending hike it also contains. Obamacare thus indisputably represents a massive new burden on current taxpayers and future generations.

    Finally, several of Obamacare’s “pay-fors” are unlikely to ever become reality. One example is the excise tax on “Cadillac” health plans, an unpopular change that isn’t supposed to occur until 2018—after President Obama is safely out of office. If the Congress and White House responsible for creating this tax weren’t willing to put it into effect, it is unlikely that future lawmakers will do so. Without the Cadillac tax, Obamacare loses $111 billion of offsets for new spending.

    Unsustainable cuts to the Medicare program are also expected to pay for new spending. Both the CBO director and Medicare’s Chief Actuary have warned that these cuts to Medicare provider payments could reduce access to care for seniors and reduce quality of care. Congress’s past behavior proves its hesitance to allow similar changes to the program, so savings within Medicare will likely not materialize.

    The reality is that the offsets for Obamacare spending cannot occur without serious negative consequences, and without them, it adds significantly to deficit spending. CBO Director Douglas Elmendorf’s letter to Budget Committee Chairman Paul Ryan last week stated that repeal would reduce the deficit if these provisions don’t occur.

    So the facts are in. Obamacare includes tremendous new levels of federal spending at a time when lawmakers are seeking ways to reduce the unaffordable size of government. It pays for new spending by increasing taxes on the American people, burdening individuals and businesses and putting further strain on the economy. And, as we explain further in recent research, a realistic scoring of Obamacare shows that it is certain to increase deficits.

    Posted in Obamacare [slideshow_deploy]

    15 Responses to New CBO Report Proves We Cannot Afford Obamacare

    1. Kevin H, college par says:

      By my reading of the letter from CBO, i'm now much more in favor of Obamacare than before.

      By my reading of the letter you linked, HR2, which would repeal Obamacare would 'cause a net increase in federal budget deficits of $210 billion over the 2012-2021 period'. So Republicans want to add another 210b to the debt?

      Also, the second paragraph has great sellign point after selling point for Obamacare:

      'Among other things, PPACA and the provisions of the Reconciliation Act

      that are related to health care will do the following: establish a mandate for

      most legal residents of the United States to obtain health insurance; create

      insurance exchanges through which certain individuals and families will

      receive federal subsidies to substantially reduce the cost of purchasing

      health insurance coverage; significantly expand eligibility for Medicaid;

      permanently reduce the growth of Medicare’s payment rates for most

      services (relative to the growth rates projected under prior law); impose an

      excise tax on health insurance plans with relatively high premiums; impose

      certain taxes on individuals and families with relatively high incomes; and

      make various other changes to the federal tax code, Medicare, Medicaid,

      and other programs.'

      The views (and i presume Heritage's views) of this post just don't add up and is poor budget and economics. You can't just look at cost and not talk about revenue. When corporations or organizations like Heritage produce their annual report – they show both expenses and income (costs and revenues). The CBO letter you link shows that Obamacare will reduce the deficit. It's that plan and simple.

      • Almost Had me says:

        Kevin's right. If you look at Table 4. It seems to show a net decrease in the deficit.

        H.R. 2 would, on net, increase federal deficits over the next decade because
        the net savings from eliminating the coverage provisions would be more
        than offset by the combination of other spending increases and revenue
        In total, CBO and JCT estimate that H.R. 2 would reduce outlays by about
        $604 billion and reduce revenues by about $813 billion over the 2012-2021
        period (see Table 2).

    2. Eric Paul Dennis says:

      Hello Miss Nix,

      I am curious as to how you reached your conclusions based on this particular report. You seem to have picked out particular costs of Obamacare and ignored the benefits. This report that you cite concludes a $210 billion reduction of Federal Deficit by 2021.

    3. Pingback: Tweets that mention New CBO Report Proves We Cannot Afford Obamacare | The Foundry: Conservative Policy News. -- Topsy.com

    4. George Colgrove, VA says:

      Why is it that in once instance this corrupt political organization (CBO) will say that Obamacare will do wonders for the economy, then in a near instant then admit it will hurt the economy?

      Uncovering the lies and corruption that is in Obamacare is important, but the story behind the story here is that we need a body that will expose this untrustworthy and devious federal government for what it is. CBO – even though it is a congressional oversight commission is controlled by the president via the fact it is employed by overpaid ineffective federal employees. They have been caught this year alone in countless lies to protect Obamacare and other draconian liberal proposals.

      We need real government oversight. One that is not employed by feds, but by honest professionals who can be trusted. People who are there because they have an inherent and natural born desire for open government and transparency. A group paid by separate funding and not out of the federal funding that they are overseeing. This body should be a true independent group. This group should not report to congress or the president, but to the people. They should have full and unhindered access to the entire federal government – with a small part having access to ALL matters of national security matters to ensure that all decisions being made are correct, made within budget and within the correct timeframe.

      The feds have done nothing to offer proof that they are trustworthy and honest. The documents leaked by federal employees to Wikileaks excessively show how a very unprofessional the federal workforce is. And the documents show how ignorant and dangerous they are on the national scene. We the people need to know this information. Especially if this very same workforce that benefits on American misery and failure will be running our healthcare. If this excessively political left leaning federal workforce will be making our choice on when to live or die.

      It is time when we are talking about budget cuts and cost saving in the corrupt federal government that we start a quick discussion and even quicker action on consolidating ALL federal oversight in a single body that will have full access and police powers over the overpaid and ineffective federal workforce.

    5. Kathryn Nix Kathryn Nix says:

      Dear Eric,

      Thanks for your comment. Heritage has written extensively on how Obamacare will increase federal deficit spending once unrealistic assumptions that CBO is required to make are fully taken into account. This paper explains: http://www.heritage.org/Research/Reports/2011/01/….
      Moreover, whether Obamacare is paid for by current taxpayers through higher taxes now or by future taxpayers via increased deficits does not change the fact that this level of new spending is unaffordable.

    6. Pingback: Tweets that mention New CBO Report Proves We Cannot Afford Obamacare | The Foundry: Conservative Policy News. -- Topsy.com

    7. John Goodman says:

      I concluded something totally different. In fact, what I read was that HR 2 would levy an additional 210 billion to the deficit. Are you stupid or just blind?

    8. W.P.Koch, San LuIs O says:

      WHAT SHOULD HAPPEN (Revised 2/26/11)

      Congress and the White House should stop wasting the people’s money. There are many ways to “cut as detailed herein” and use savings to improve quality of basic invested entitlements. Preserve the 2010 tax schedule with no inheritance taxes. Congress should transition to an improved Medicare. Vote opponents to this “out”. Citizens come first.

      It is time the U.S. reduces human rites and police activities for the World by lobbying the United Nations, NATO and Interpol to “take on more”. 800 bases in 63 countries across the world should be reduced. Examples are fewer forces in, Bosnia, Germany, Philippines and Okinawa.

      Starting with Iraq, only train for self reliance. After the surge in Afghanistan train and diminish corruption by requiring accounting practices for aid, substituting minerals mining and food crops for drugs.

      Cut bloated federal bureaucracy and phase in outsourcing. Combine CDC, EPA and FDA. Combine the FAA, NHTSA and Transportation Department. Combine GAO and CBO. Eliminate Departments “must spend all”. Return “unused” yearly budget to the treasury. Cut combined department budgets (other than entitlements) on an average of 10%.

      Eliminate all 32 CZARS Mr. president. Reduce your 469 member staff which makes nearly 39 million per year! Halt first lady $180,000 air force one vacation trips. Stop “$200 million per day” presidential-family foreign trips. Cancel $ 20,000,000 executive order (HB 1388) to relocate key Hamas members to U.S.

      Contribute to only one of: The World Bank or International Monetary Fund or U.S. Agency for International Development.

      Reduce foreign aid bribery. For example, no aid to oil rich -Iraq. $37 billion and increasing with $8.7 billion of development funds not accounted for. Halt $150 million aid to Palestinians. Slash $1.3 billion annually to Egypt.

      Charge bailed companies (TARP) for their huge executive bonuses at taxpayer expense. Government should sell shares to recoup for taxpayer. About $154 billion owed.

      Congress should reduce “stimulus” expenditures by halting: over budget and vote bribery “earmarks”. Example: Stop “cow burp” study. Take back $13 billion unspent in states. Eliminate subsidies that smell “earmark”. Congress should cut its pay and do not pay student loans for their staff. Please- no renting of private or military aircraft. An example was Pelosi’s family of $2.1 million for over 2 years. Congress should set commercial travel cost standards and controls.

      Reduce medical cost by: allowing purchasing anywhere in U.S., “tort reform”, and reducing “red tape”. Reduce Medicare fraud by expediting billing cost speed, and doctor/patient screening of local provider groups.

      Congress should enforce existing immigration laws and implement “no illegal birthrights”. Entitlements or benefits should be for only citizens. Deport criminal “illegals”. Only deportees and workers on Visa/Guest Programs qualify for needed medical benefits. Complete an improved fence.

      These actions will improve funding for:” Medicare”, “Medicaid, and “Veteran’s Affairs”. Corporations should be allowed tax reduction incentives for hiring with healthcare plan options.

      Healthcare quality can be at least that for Congress or the Federal Employee Health Benefits Program (FEHBP). Additional benefits are: dental coverage, improved visual coverage, no drug “donut hole”, no pre-existing conditions, and no deductibles and co-pays except for extended skilled level nursing.

      Other benefits are aid for unemployment compensation and Social Security with reinstated cost of living increases.

    9. Boetica, CA says:

      Nurses are so happy about the great things that Obamacare has provided for nursing, except that the CBO refused to answer a Congressman's inquiry regarding the costs of these great things until after the vote was taken. The truth is that none of these great things were funded in the bill (though they were included in the bill). The huge cuts to Medicare are unrealistic as more and more people enter the Medicare system.

      President Obama has made spurious accusations against doctors in the past, and no doubt when fewer and fewer doctors take Medicare patients (as reimbursement decreases to unmanageable levels) these accusations will increase. There is already a doctor shortage here in California, so how are all of these new MediCal patients going to get doctors? Obama's dream sounds like a Cuban/Venezuelan type system, which, in spite of Michael Moore's fabrication, is very poor for anyone but the political elite.

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    11. Pingback: Full Costs of ObamaCare Becoming Apparent | RedState

    12. Mike, Georgetown, IN says:

      Okay Robert H., the individual mandate is the most unconstitutional part of Obama-care. I refuse to be forced into purchasing something that I don't use.

      This isn't about health-care, it's about health insurance. I take care of my own health by eating right and getting proper nutrition. I've only been sick one time in the last 5 1/2 years. I spent only $7.00. That's $7.00 in 5 1/2 years.

      The Federal government has no authority to force U.S. citizens to buy anything, especially insurance.

    13. Mike, Georgetown, IN says:

      The individual mandate is the most unconstitutional part of Obama-care. This is not about health-care, it's about health insurance. I take care of my own health by eating right and getting proper nutrition. I've only been sick one time in the last 5 1/2 years. I spent only $7.00 in 5 1/2 years, and refuse to be forced into buying something that I don't use.

      The Federal government has no authority to mandate that U.S. citizens purchase anything, especially insurance.

    14. Pingback: Full Costs of ObamaCare Becoming Apparent

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