• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Obamacare's Top Three Budget Busters

    Obamacare increases unaffordable government spending, which ultimately comes out of taxpayers’ pockets. Here, we summarize three of the most costly provisions of Obamacare:

    1. Medicaid Expansion: Beginning in 2014, Obamacare expands Medicaid to include all non-elderly individuals with income below 133 percent of the federal poverty level. The expansion of Medicaid accounts for more than half of the newly insured population under Obamacare. The Congressional Budget Office (CBO) estimates, “By 2022, federal outlays for Medicaid are expected to total $605 billion, more than twice the 2012 amount,” and “about 95 million people will be enrolled in Medicaid at some point in the year.”

    As Heritage analysts point out, the expansion will significantly impact both state and federal budgets. Heritage estimates the expansion will “increase state tax obligations by just under $33.5 billion for federal fiscal years (FY) 2014 through 2020. Of that amount, $21.5 billion will be the states’ share of the benefit costs, and just under $12 billion will be the states’ share of the added administrative costs.”

    2. Exchange Subsidies: Obamacare establishes subsidies to purchase government-approved coverage in the new exchanges for qualified households between 138 percent and 400 percent of the federal poverty level (FPL). CBO predicts, “About 8 million people will receive exchange subsidies in 2014 and roughly 20 million will receive them by 2022. Outlays for providing those subsidies, operating the exchanges, and running related programs will total $104 billion by 2022.”

    Heritage analysts argue that the subsidies will urge employers to drop coverage, create disincentives to work, and shift the cost burden to taxpayers. Former CBO Director Douglas Holtz-Eakin calculates that an additional 35 million people could receive coverage through the exchanges, costing nearly $1 trillion more than original estimates for this decade.

    3. Budget Gimmicks: Obamacare used a variety of Washington budget gimmicks to claim that the health care law would reduce the deficit, beginning with taking Medicare “savings” away from shoring up Medicare to offset new Obamacare spending.

    The now “suspended” CLASS Act—the government-run long-term care program—was another gimmick. As Heritage experts explain, under the CLASS Act, “Beneficiaries will begin paying premiums in 2011 but will not receive benefits for five years. This frontloads revenue and creates the illusion of $70 billion to pay for new spending under PPACA. In reality, premium payments from CLASS will be used to pay out benefits in later years.”

    Finally, Obamacare assumed that the 27 percent scheduled cut to physicians would go into effect, even though Congress has delayed it every year since 2003. This made Obamacare seem less expensive, furthering the claim that it reduced the deficit. But of course, Congress did not allow these cuts to go into effect, and the $300 billion in savings didn’t occur.

    Posted in Featured, Obamacare [slideshow_deploy]

    8 Responses to Obamacare's Top Three Budget Busters

    1. Eddie York says:

      Obama is not only a failure as President, he casts a shadow over every American Worldwide with his Cowardice, his Lies, Obamacare & it's 2,000 pages of Lies, Solyndra and Billions he gave away with no strings attached to his best Donors.

      Our Nation has never had such a failure for President as bad as Obama. He claimed he would pay the deficit down by 1/2 of what it was when he entered the Presidency….in 2009 it was 10 Trillion.

      Today, the deficit is over $15 Trillion and Obama is asking for another $1.5 Trillion. Obama has one more year left and he will be at $16.5 Trillion if he gets another increase.

      Obama is not very smart, though he is Corrupt. He knows precisely what he is doing to our Nation, destroying us FINANCIALLY via Obamacare, denying the freedom of the 1st Amendment to Religious Groups, Inciting Violence via Class Warfare, increasing the Divisions caused by Racism.

      Obama will be and must be removed from office at any cost.

      • Kevin McDevitt says:

        You are confusing "Deficit" and "Debt". He did not promise to pay down the debt. That has continued to skyrocket out of control.

        He promissed lower Deficits since his first year, which is quite easy based on the huge amount of 'stimulus' spening his predecessor, George "New Deal" Bush gave away in the previous year. Compared to that, $500 billion in fivolous, over budget spending would only be half of the 'deficit'.

        • Steve In Tulsa says:

          The last republican congress in 2006 had unemployment at 4.6 and the deficit at 160 billion. Then democrats took over and since January 2007 they have destroyed the economy. They wrote TARP. Ted Kennedy wrote Medicare Part D. By 2009 the democrats had quadrupled the deficit and destroyed 5 million jobs. Now after Obama the democrats have quadrupled the deficit again!

        • Craig Walker says:

          Kevin,

          Bafoonery with terminology meant to deflect Kevin. WE ARE ALL GETTING RIPPED OFF. Had you tried this kind of manipulation on your tax return you'd be in jail. Yet you hide behind language and the liberal curtain of deception. I encourage to you step up to the plate and really look hard at this administrations expansion of government and spin that positively for the American Public.

      • Brenda Harrison says:

        Stupid the deficit and the debt are not the same..And it is not called Obamacare…it is the Affordable Health Care Act..this article is nothing but right wing lies!!Check the facts for yourself..stop being Sheep!

        • Craig Walker says:

          Being sheep would mean a non active participation in the decline of the United States; its standing in the world, it's economic future, its securing the "American Dream" for its citizens and generations to come. What you fail to realize Brenda is that we recognize one simple fact.

          Government is not the answer, it is the problem…….

          "We sheep" as you call us have been enlightened by the concern for our country. We can no longer stand idly by while the bus driver takes us over the cliff. Try again Brenda, pseudo intellectualism will not be enough. Put down the book and pick up a shovel to help us return to greatness. Your kids will thank you later.

    2. JoAnne Brunclik says:

      The State Governments have the power to regulate the public safety and health. The federal government does not. It is not Constitutional for the Federal Government to take the health insurance industry into itself. If health insurance is a product sold between the States, the federal government could regulate that commerce. But if the Federal Government takes the health industry into itself, it is regulating the people themselves directly from the Federal Government. That takes away the power and rights of the people; it takes away their self-government, ability to direct the government according to their conscience, and employing a doctor of their choice. That is not a government of the people, by the people, for the people. That is dictatorial.

    3. JNL says:

      I told everyone I knew that this group of thief's would be worst than the old gangster movies. Pay attention to what they do more than what they say! The younger generation want have much left to worry about if they vote this butch back for another term! Rome did not fall in a day and this butch is determined to end America, ASAP.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×