I’m getting a lot of e-mails quoting articles like this one, by John Ransom, that say something like, “In a wholly
predictable development, it turns out the cost for Obamacare will end up being twice the original price that the
But let’s back up. The occasion for this dust-up is a set of updated cost estimates for the coverage provisions health-care law. The new estimates reflect a couple of factors. The Congressional Budget Office lists them:
- An increase of $168 billion in projected outlays for Medicaid and CHIP;
- A decrease of $97 billion in projected costs for exchange subsidies and related spending;
- A decrease of $20 billion in the cost of tax credits for small employers; and
- An additional $99 billion in net deficit reductions from penalty payments, the excise tax on high-premium
insurance plans, and other effects on tax revenues and outlays—with most of those effects reflecting changes revenues.
You’ll notice something about the above list: It appears to add up to a net reduction in the cost of the health-care
law. And, sure enough, here’s CBO: “the insurance coverage provisions of the ACA will have a net cost of just $1.1 trillion over the 2012–2021 period—about $50 billion less than the agencies’ March 2011 estimate.” You
would get the opposite impression reading Ransom.