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  • Obamacare: Higher Taxes, More Uninsured, Says CBO

    On March 13, the Congressional Budget Office (CBO) updated its score of Obamacare, announcing that the program is $48 billion cheaper than in its previous 2011 score.

    The primary reason for this change is that more individuals will lose their employer-provided coverage than originally anticipated, and the government will collect $99 billion more in taxes and penalties. CBO also finds that there are more uninsured individuals.

    In short, this new CBO update continues the trend of Obamacare becoming increasingly expensive and decreasingly effective with each new scoring update.

    In this round, CBO announced that the individual mandate penalties will increase by one-third, or $11 billion, as more individuals choose not to purchase insurance. This is especially surprising since CBO also estimates that health insurance premiums will be cheaper in the next decade. Thus, even with cheaper premiums, fewer people will choose to acquire insurance.

    CBO also finds that more employers will choose not to offer coverage. The mandate penalties on firms will increase by 18.5 percent, or $15 billion, as these firms find it more efficient to pay a penalty. The CBO also realized that small businesses have no interest in offering health care by the government’s rules. The take-up rate for the small businesses offering health care tax credits has been abysmal so far, and as a consequence CBO halved the effect of this provision.

    President Obama has also recognized this failure—by doubling down and offering an expansion of this tax credit. As the CBO update shows, not only will small businesses not take up the credit, but more and more businesses will not offer health insurance at all.

    Another reason that the CBO score is less is because in the CBO model when businesses no longer offer insurance, they pay employees more in wages. As a consequence, these wages are then taxed, whereas employer provided health insurance is an untaxed benefit. CBO and the Joint Tax Committee almost doubled the amount of revenue collected by the change of compensation from health insurance to taxes. Since employers are no longer offering health insurance coverage or employees no longer buying it, the government is projected to collect $80 billion more in income taxes over the next 10 years.

    Higher tax receipts are only half of this story. It also costs more to cover individuals who receive subsidized insurance from the government. CBO says that because the Obama Administration is forcing insurers to cover more provisions—such as birth control—the initial per capita cost of coverage for people on the exchanges will increase.

    CBO finds that overall, there are 3 million fewer people receiving employer-provided coverage, as many of these individuals and companies will choose to pay the tax penalties. There will also be 2 million fewer individuals in the exchange as some of these individuals will be covered by Medicaid or CHIP or go uninsured. The slow economic recovery will make more people eligible for Medicaid than originally anticipated.

    This new scoring is simply the latest litany in the broken promises of Obamacare. So far, almost every prediction has been worse than originally estimated. Fewer people have signed up for high-risk pools, the CLASS Act was a new unfunded entitlement, and now fewer people will be covered. The legislation needs to be repealed before things get any worse.

    Posted in Featured, Obamacare [slideshow_deploy]

    17 Responses to Obamacare: Higher Taxes, More Uninsured, Says CBO

    1. zff says:

      However, what the CBO forgets in saying Obamacare is now 60 billion "cheaper" is that all those penalties and higher taxes will curtail income and business investment, which will cause the Fed's tax revues to plummet and far from becoming cheaper will make ObamaCare more and more expensive each year as the revenue to pay for it won't be there.

      As for lower premiums, adding more and more people to the insurance rolls, especially high risk individuals, has never and will never lower premiums, so I'm not sure where the CBO get's the lower premiums idea from, unless they are assuming *a lot more* folks will go uninsured. Of course, once people get back in to the insurance market to take advantage of the artificially lower premiums, the premiums will soar once again. So, Obamacare will not lower premiums in the long run, if at all.

    2. Dan says:

      Ameritopia baby! Many bought it hook line and sinker. A guy with little experience, and radical experience at that, can solve all of your problems: Healthchare, Global Warming, Income Inequality…..the list goes on. Did you really believe all of the hype?

      As Mark Levin describes in his book Ameritopia, about the Utopian dreams of Karl Marx and company, it's a dream that has been demonstrated to be the fast track to the demise of our country, any country for that matter, that doesn't reckognize this disease before it's too late.

    3. Keith says:

      WE MUST REPEAL this legislation. I have traveled to Canada or the UK and see how much this will cost. In the UK, every news cast has someone suing over health care. The ambulances say "This is not a taxi" on the back. They know about healthcare rationing.
      A laid off auto worker from Canada was telling me how he has to buy health insurance because the Canadian health care plan does not cover enough for his family.
      All the back door deals to pass this was an example of Washington at its worse. They did not "drain the swamp", they doubled down on the sewage.
      WHY does the media ignore this? Are they being strong armed?

    4. Jenny says:

      Wow. So the one thing leftists always said was the reason for this legislation, to insure the uninsured, is not even true. Not even surprised.

    5. DAN says:

      I will probably lose my employeer coverage Jan. 1,2013. I will not partisapate in Obamacare
      for religous and unconstitutional reasons. i will not pay fiines. Looks like possable jail time
      for me?

      • Craig Casey says:

        No jail time Dan. However, not willfully paying a tax the feds think you owe can become a criminal offense, in their Stalinist minds. But I think millions will refuse to pay coverage or get health insurance out of civil disobedience, which is a good thing!

      • Julene Sullivan says:

        Just make sure that you do NOT go to the hospital as it is ridiculous that we end up paying for free loaders at the hospital under our pre Obamacare days…. Drop your auto insurance as well…..

    6. H Reid says:

      This is going to be a tragedy – for Americans , existing doctors, those about to graduate, pharmacies etc. Please take this seriously. If you cringe when you hear "Too big to fail" – you're going to see too big to Fix. If not reversed – Congress will spend >10 years trying to fix this. A whole generation of prosperity disappears.

    7. Bobbie says:

      ALL democrat obstruction! where's ALL this money going? THIS COUNTRY CAN NOT RUN ON IGNORANCE OF GROWN ADULT CRY BABIES THAT AREN'T GROWN ENOUGH TO BE TRUTHFUL, TOO LITTLE TO RESPECT AMERICA'S TRUTH AND FREE PEOPLE WHILE THE BABIES LEAD WITHOUT FULLY DEVELOPED MINDS AND EVERYONES MONEY, MONEY, MONEY! Highly paid, under developed minds can't think beyond impositions and increased taxing to cover their mind deficiency so they hide behind the dollars of the self reliant who aren't the cause of this government take over! every government official in the 1% of the occupiers protest, shouldn't be infringing a cost on society for their already wealth Pelosi established in the FREE MARKET! How come she could do it? Hypocrites with under developed minds…

    8. Mutantone says:

      And let's not forget the one dollar from each plan to support abortions

    9. letmespellitoutforyou says:

      Just in following the news accounts describing this CBO report alone, it's hard for even reasonably informed laymen to keep track of all the convoluted results of this law. Has anyone attempted to create a set of visuals?

    10. Pingback: The Real Mitt Romney - Page 3

    11. mike largent says:

      All reliable estimates suggest that currently there are 30-45> million uninsured Americans. Healthcare is expected to consume 18% of GDP in the near future. So what then do we do? Do we want to spend that much for future care and coverage that is no better than that which we currently receive? Do we pass the buck to another generation, congress or administration? Or do we look reality in the eye and bite the bullet, willing to find reasonable conservative measures that afford us this right we as tax-paying Americans deserve. Quality, affordable healthcare unencumbered by bloated private insurers and their beltway proxies whoring the halls of Congress, checkbooks in hand. The thought "sickens me". Pun intended. Time to move on this folks what do ya think?

      • Craig Casey says:

        Mike, Medicaid is unsustainable. Medicare is also classified as a high risk program for fraud and waste. Are you suggesting expending single payer, when it has already been a disaster?

    12. boberic says:

      All the numbers are a ten year projection. If anyone believes that a ten year Gov"t financial estimate will be accurate he is insane and should be disregarded as a fool or a liar. Milton Friedman sais it best. " If the government were put incharge of the Sahara desert, in 5 years they would run out of sand

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