Jul27
ObamaCare Costs
on July 27, 2012 at 11:02 amThis is an illustration of a pet peeve, though. I hate misleading scaling of graphs and bar charts. Because they chose to use $900 as a baseline, it makes it appear that the estimates have increased by more than an order of magnitude over two years, when in fact they have only doubled. It seems to me that doubling is bad enough without playing games with graphics.
Nothing has doubled over two years; the author is misleadingly comparing different 10 year periods. If you look at the same period (2013-2019), the spending increase (from $929B to $1,053B) is about 13%. And that spending increase is offset by an increase in forecast revenue.
The CBO continues to forecast that Obamacare will reduce the 2013-2022 deficit by over $100B.
The link provided doesn’t support your claim nor provides any evidence itself to support its claim. Here’s what the CBO actually said:
CBO’s current estimate of the budget deficit for fiscal year 2012—$1.2 trillion—is $93 billion larger than the deficit projected in January. Conversely, CBO’s baseline projection of the cumulative deficit for the 10-year period from 2013 to 2022 is $186 billion smaller than the amount projected in January—a decrease equal to about 0.1 percent of gross domestic product (GDP) over that period. The fundamental story about the federal budget has not changed: Although the deficit is starting to shrink, it remains very large by historical standards.
It’s smaller by $186 billion from what? The amount projected in January? For just this current fiscal year, the CBO’s projection was off by $93 billion, and Jim wants us to buy into a CBO estimate over the next 10 years. An estimate that even CBO includes with a caveat to the deficit: How much and how quickly it declines will depend in part on how well the economy performs over the next few years.
Last we heard from Jim, he told us we were unfairly quoting Obama and not considering his context. From Obama’s infamous Roanoke speech:
I’ve got a different idea. I do believe we can cut — we’ve already made a trillion dollars’ worth of cuts. We can make some more cuts in programs that don’t work, and make government work more efficiently.
CBO says the deficit is at $1.2 trillion for just this year. Where are the cuts Mr. President? The CBO can’t find them. Hopefully Obama asked his cabinet about it, since he finally met with them for the first time since his SOTU address.
I am constantly amazed by the lack of meetings between Obama and his highest level staff like generals in charge of the war in Afghanistan, jobs council, and now his cabinet. It is mind boggling that he routinely goes six months without meeting with the most important people in his administration.
Someday someone will ask Obama why he met with Trumka upteen times more than he met with his cabinet.
I suspect the response to “Where are the [$1 trillion in] cuts” goes back to the prediction that the War in Afghanistan would end magically in 2013 and subsequent budgets would drop by the cost of that war. You would think for something as important as both a war in another nation and the need to reduce the deficit; Obama would have at least met a bit more often with the Generals in regards to Afghanistan. Perhaps that occurs in Bizarro Planet and Jim can enlighten us.
The link provided doesn’t support your claim
From the link:
Where are the cuts Mr. President?
I assume Obama was referring to the automatic (sequestration) cuts in the Budget Control Act of 2011. They are spread out between 2013 and 2021, so they wouldn’t change the 2012 deficit.
Note: this has nothing to do with Obamacare’s effect on the deficit, the supposed topic of this thread.
The CBO has been all over the board on this, one week they say Obamacare will increase the deficit by x and the next week they say it will be reduced.
Know what will be going up? The contributions that state governments are required to pay for the Medicaid expansion in Obamacare. Which means at the state level there will have to be cuts or more taxes. This isn’t included by the CBO as a cost of Obamacare.
Know how insurance companies are dealing with mandates regarding prescription medicines? By not providing any coverage for prescription medicines.
I have no love for insurance companies or for the medical industry in general but Obamacare has only made things worse.
The CBO has been all over the board on this, one week they say Obamacare will increase the deficit by x and the next week they say it will be reduced.
The CBO has never forecast that Obamacare would increase the deficit.
Which means at the state level there will have to be cuts or more taxes.
Not necessarily. Arkansas forecasts that Medicaid expansion (which is optional) will save them $372 million in the first six years. After 2021 it will cost them $3 million/year, and at that rate they can go a century before there’s a net cost.
Note that CBO reports are about the federal budget, not state budgets. If they included state budgetary effects, as you suggest, they would have scored the stimulus bill as being much less costly, since a lot of the stimulus spending was state budget relief.
Pretty sure there have been several CBO reports saying Obamacare was going to be more expensive than advertised. You should go look it up, maybe you will learn something.
You might want to talk to some doctors and pharmacists about Medicare and Medicaid costs. They are the ones footing the bill for the expansions.
No stimulus money spent on state.governments doesn’t make it less spending. The mental gymnastics it takes to get to that conclusion are rediculous.
Think for a moment. Obama expanded medicare and medicaid by mandate and then pushed the costs to the states in order to hide the costs of his mandates and make obamacare more attractive.
Pretty sure there have been several CBO reports saying Obamacare was going to be more expensive than advertised.
I’m guessing you think that because of misleading articles like the one referenced in this post. But if you actually look at the CBO reports, you see that every time the CBO was asked whether Obamacare would reduce the deficit, they answered yes. And every time they were asked whether repealing Obamacare would increase the deficit, they answered no. The simple fact that Obamacare reduces the deficit is so inconvenient to the GOP that Republicans and their supporters routinely lie about it (see Rand’s “budget busting” comment, or Romney’s false claim that Obamacare increases the debt).
Think for a moment. Obama expanded medicare and medicaid by mandate and then pushed the costs to the states in order to hide the costs of his mandates and make obamacare more attractive.
You clearly have no idea what Obamacare does. It does not expand Medicare — it pays for itself in part by cutting Medicare spending. Medicare is a federal program, it is not administered or paid for by the states. Medicaid is administered by the states, and Obamacare’s optional Medicaid expansion is 100% funded by the federal government for the first few years, and 90% funded thereafter; the costs are part of the CBO forecasts, and are not hidden (the latest CBO report is mostly about those costs). The mandates (on individuals and businesses) have nothing to do with Medicare or Medicaid.
Obamacare spends a lot of money. It more than balances that by raising a lot of money in taxes and fees, and by cutting a lot of other spending. The overall effect is to dramatically expand insurance coverage, and shift some of the burden of medical costs from the poor and near-poor to the wealthy, who bear the brunt of the new taxes.
Obamacare cuts funding for Medicare but expands services. You cannot get more services for less money. Go talk to some doctors about how Medicare reimbursements are going. Doctors are already providing many services at a loss and many wont accept Medicare patients.
I conflated Medicare and Medicaid a bit there
but at least you admit that Medicaid costs will be going up both for the states and for the feds.
Some of the taxes associated with Obamacare, like the taxes on medical equipment, will only drive the costs of healthcare higher and stifle innovation.
Maybe you think that the levels of taxation needed to support Obamacare are ok but I disagree. I think they will not only have a negative impact on the health care industry but on the economy as whole. Obamacare will most likely cost more than expected, just like everything else the government does.
Nothing has doubled over two years; the author is misleadingly comparing different 10 year periods.
What makes that misleading? The fact that the costs were delayed a few years to make the original ten year project look good. A rolling ten year analysis shows this deception clearly, which is what was done.
The CBO continues to forecast that Obamacare will reduce the 2013-2022 deficit by over $100B.
And even if you and the CBO should both happen to be right this once, we still have the time after 2022 (more accurately, after 2014 when the spending really kicks in), to deal with. I’m not surprised you fail to deal with this. After all, you’re still defending the CBO even though you’ve been told many times about its terrible flaws.
What makes that misleading?
The author is saying, essentially, “the CBO used to say that X would cost $944B, but now it’s saying that X will cost $1856B, OMG, the costs are growing out of control, just look at this graph!” He is implying that the original forecast was a gross understatement of the costs, and that newer, more accurate forecasts show how bad that original forecast was.
But nothing like that has happened, because the X in the first clause isn’t the same thing as the X in the second; they are costs for different periods. The CBO has always forecast that the rolling 10 year cost would increase greatly as the implementation actually happened. The facts completely undercut the point of his article.
we still have the time after 2022 (more accurately, after 2014 when the spending really kicks in), to deal with.
2014 is also when the revenue really kicks in, which is why the CBO has consistently forecast that Obamacare will reduce the deficit much more in its second decade than in its first.
Revenue? I think you mean the greatest tax increase in American history. Still trying to say Obama didn’t raise taxes?
Obamacare is not the greatest tax increase in US history. That honor still belongs to Reagan’s 1982 tax hike.
Remember, Leland, that Jim is a visitor from Bizarro Planet, where statism ALWAYS produces beneficial results for everyone!
As I say about such charts, “that makes the baby Edward Tufte cry”.
Jim, you are quoting the link, but the Drudge Retort provides nothing to support its claim. It doesn’t even quote the CBO, it paraphrases and then makes a leap in logic. So I say again, the link you provided doesn’t support your claim.
And since the Budget Control Act told the President to make cuts, and Obama hasn’t; are you really claiming the sequestration cuts is Obama’s plan? Is that why Obama decided it wasn’t important to meet with his cabinet for 6 months? There’s only one problem, the Budget Control Act was passed as a deal to raise the debt ceiling, for which Obama was to stay under until after 2013. However, Obama spent more money (rather played golf than meet with anyone about cutting the budget) than the economy could provide him. So now that’s he’s added to the deficit, and the debt ceiling will be reached earlier; it seems something like $93 billion of the $1 trillion has already been spent this year. Multiply that overspending for each of the next 10 years, and what do you get, Jim?
Here’s the actual CBO report. On page 6 you find the quote that Drudge was paraphrasing:
However, Obama spent more money
The executive branch only spends money that was appropriated by Congress (see: “power of the purse”).
And so, the mock site didn’t get the full context:
On net, CBO and JCT estimate, repealing the ACA would increase federal budget deficits by $109 billion over the 2013–2022 period. Repealing the coverage provisions discussed in this report would save $1,171 billion over that period, but repealing the rest of the act would increase direct spending and reduce revenues by a total of $1,280 billion.12
So in short, repealing ACA cuts spending by $1.1 trillion and reduces taxes on the American people by $1.2 trillion. And in typical government parlance, this is seen as a problem? And what about that footnote:
12 The estimated effects of repealing the coverage provisions of the ACA differ slightly from CBO and JCT’s current projections of the budgetary effects of those provisions. Some of the effects of changes made under the ACA that are captured in those current projections are expected to continue even if the law is repealed. In addition, the projections for the effects of the coverage provisions presented in this document include small effects in fiscal year 2012, but an estimate of repeal includes effects only for 2013 through 2022 because of the assumption that repeal would be enacted near the start of fiscal year 2013.
So if ACA is repealed; the expectation is the government will continue to do direct spending towards provisions that were repealed? That’s just corruption. There could be even more savings to be realized.
So when you find the paragraph, what it says is that repealing ACA will save $1.17 trillion in spending. However, it will reduce
revenuetaxation (corrected by SCOTUS) by $1.2 trilion. So it’s a win win for taxpayers. The $109 billion is the shrinkage in the size of government. What’s the problem?the problem is that repealing ACA will mean millions of Americans won’t have health care.
That is not a big enough problem to justify this anti-liberty budget-busting legislative atrocity.
The unemployement numbers show a striking correlation with the uninsured numbers. Perhaps there is a less odious way to see that poor people get medical coverage than bringing down the standard of care for the rest of the country.
The problems associated with leaving Obamacare as-is are even worse. We can’t just consider one side of the equation — that’s how folks got themselves into this mess.
However, it will reduce revenue taxation (corrected by SCOTUS) by $1.2 trilion.
No. What it actually says is: repealing the rest of the act would increase direct spending and reduce revenues by a total of $1,280 billion
That $1.2T (actually closer to $1.3T) figure includes both spending cuts and tax hikes. Remember the Medicare cuts that the GOP ran against in 2010? Repealing the law eliminates those spending cuts.
The $109 billion is the shrinkage in the size of government.
No, it’s the increase in the deficit.
this anti-liberty budget-busting legislative atrocity
As the CBO has said time and time again, Obamacare doesn’t “bust” the budget, it moves it slightly closer to balance.
Chris is right, the biggest effect of repeal would be avoidable deaths, as tens of millions of people slated to get coverage under the ACA go without.
As the CBO has said time and time again, Obamacare doesn’t “bust” the budget, it moves it slightly closer to balance.
The CBO says a lot of things that aren’t true. Why should we care? Remember it’s not an ad hominem attack if it’s true and relevant.
The CBO says a lot of things that aren’t true
1. Where’s the evidence that they’re wrong this time? It’s lazy to just declare them wrong whenever you don’t like their findings.
2. If the CBO isn’t worth listening to, why does this thread (prompted by an article that tries to make an argument using CBO findings) even exist?
Why should we care?
1. Arguments are more productive when they’re based on widely accepted facts.
2. The CBO produces the most reliable facts about the US budget; it’s why the CBO exists. Without it each party could make up its own version of budget reality, and sane discussion would be impossible.
By analogy, it’s a good thing that the EPA publishes mileage figures for cars. Those figures are almost always wrong, in the sense that it’s very unlikely that a given consumer will get exactly the mileage results on the window sticker. It is easy to criticize the EPA’s measurement process, which fails to perfectly reflect real-life use cases and behaviors. But for all that it would be foolish to act as if EPA mileage figures don’t exist, or to dismiss them out of hand whenever we don’t like them.
2. If the CBO isn’t worth listening to, why does this thread (prompted by an article that tries to make an argument using CBO findings) even exist?
They’re an adversarial body. It’s interesting when they have to admit things counter to the interests of Congress.
By analogy, it’s a good thing that the EPA publishes mileage figures for cars.
EPA doesn’t have a huge bias in publishing mileage figures. But if they did, it would be like the EPA publishing low mileage numbers for GM cars despite their inherent bias in favor of GM.
The awesome part of the Drudge Retort is that they have many of the same articles linked as the Drudge Report.
They’re an adversarial body.
Adversarial to whom? Both parties find plenty to dislike in CBO reports.
For starters, the Obamacare issue. They aren’t taking into account costs generated by insurance mandates, particularly, the end of pre-existing conditions and adding more stuff to be insured. That’s the usual high level of deception one comes to expect from CBO reports.
My view is that the proposed insurance subsidies will not be enough to decrease the percentage of uninsured from 2009. That means things will be worse health care-wise than they were in 2009 when the law was passed. Unless, of course, we overturn enough of Obamacare.
So the hundreds of billions of Obamacare subsidies won’t be enough to decrease the % of uninsured, and the fix is to repeal Obamacare and have no subsidies at all?
It’s more of a fix Jim than Obamacare is. I’d couple it with an end to the tax credit for employee health benefits. There’s no reason for your health insurance to come from your job.
One merely needs to look at things like current health care or education to get a sense of what’s going to happen, if that subsidy kicks in. Much higher health care costs. It dumps money in without doing a thing to keep prices in check.
And with an end to “hundreds of billions of Obamacare subsidies, we’ll be better off as a society.
There’s no reason for your health insurance to come from your job.
I agree, but a lot of people can’t get it any other way. I currently get health insurance from my job. Last year I applied to get an individual policy instead, and was turned down flat. I’ll be able to get it in 2014, but only if Obamacare survives.
I support ending the tax credit for health benefits, but the fact is that if Obamacare goes down there isn’t going to be another serious attempt at reform for another generation. It isn’t easy to get half of the House, 60 votes in the Senate, and the President all on the same page. The choice isn’t between Obamacare and some other reform, it’s between Obamacare and the status quo.
Well, Obama and the Democrats certainly didn’t like this report which clearly demonstrates that “the rich” are most certainly paying their “fair share.”