CBO: Health reform to cut deficit by $50 billion more than we thought
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
Democrats said.”
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.
http://www.washingtonpost.com/blogs/ezra-klein/post/cbo-health-reform-to-cut-deficit-by-50-billion-more-than-2011/08/25/gIQAXgPSES_blog.html
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
Democrats said.”
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.
http://www.washingtonpost.com/blogs/ezra-klein/post/cbo-health-reform-to-cut-deficit-by-50-billion-more-than-2011/08/25/gIQAXgPSES_blog.html
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