On Tuesday, the Congressional Budget Office (CBO) released its 2012 estimate on the ten year projected cost of the Affordable Care Act (ACA). Instantly, the anti-Obamacare crowd took to the airwaves and social media to proclaim that the numbers reveal the costs of the Affordable Care Act to be double what was promised when the law was passed.
Wow. That’s some scary stuff.
Good thing it is a complete and utter falsehood.
I suppose it should not come as a great surprise that the opponents of Obamacare would mobilize—given that the CBO report actually estimates a net decrease in the costs of health care reform totaling $51 billion when compared to last year’s estimates. The last thing those who oppose the law want is Candidate Obama running around the country talking about how the estimated cost of his landmark health care reform are actually going down.
Indeed, not only is the GOP pitch a gross distortion of the truth, this is one of those all too rare moments where I get to actually prove the meme to be nothing more than another effort to confuse Americans.
By simply asking you to read the report. It’s easy. The CBO estimates are available in very readable English—not the government mumbo jumbo techno-speak you might expect. The report is short and to the point. You will not be confused.
The claim being peddled is that the estimated ten-year price tag of the law—initially projected to be about $900 billion to $1 trillion when the law was first passed—has exploded into a projected $1.7 trillion.
Jonathan Cohn offers a great explanation of what the numbers really mean -
To figure out the cost of health care reform, CBO looks at each of the law’s component parts and, for accounting purposes, groups them into different categories. It calls one category “gross cost of coverage expansions” – that’s the amount of money the federal government will spend to help people get insurance, mostly by offering Medicaid to more people or giving people subsidies they can use to help offset the cost of private insurance. Last year, CBO estimated that the gross cost of coverage expansion from 2012 through 2021 would be $1.445 trillion. Now CBO thinks the gross cost will be $1.496 trillion. The number shifted, in part, because the CBO has changed its projections for economic growth. But, in the context of such a large a budget projection, that’s barely any difference at all.
In the this latest estimate, CBO extends its projection out one more year, to capture the expenses from 2012 to 2022, in order to capture a full decade. In 2022, CBO says, the gross cost of coverage expansion will be $265 billion. Add that to the $1.496 and you get (with rounding) the $1.76 trillion – the one in the press releases and the Fox story.
But there is nothing new or surprising about this. It’s only slightly more money than the previous year’s outlays. The ten-year number seems to jump only because the time frame for the estimate has moved, dropping one year, 2011, and adding another, 2022. Obamacare has virtually no outlays in 2011, because the Medicaid expansion and subsidies don’t start up until 2014, which means the shifting time frame drops a year of no implementation and adds one of full implementation.
Even more amazing is that the opponents of Obamacare are completely ignoring the fact that when you include the money coming into the government bank accounts through the various charges included in the ACA, the estimates of the cost of the law are an improvement over last year’s projections.
Making the claim that the costs have doubled is like reading an accounting ledger and only looking at the liabilities side of the equation to inform your opinion.If you read a net worth statement that reveals $1 million in debts —and you go no further—you get a very different picture of someone’s financial situation than you would if you also took a look at the asset side of the ledger where you find $10 million in real estate holdings and $500,000 cash in the bank.
That is what is the Angry Americans are seeking to do here.
How do you know I’m telling you the truth? Read the report.
Here’s a bit of what you are going to find –
CBO and JCT now estimate that the insurance coverage provisions of the ACA will have a net cost of just under $1.1 trillion over the 2012–2021 period—about $50 billion less than the agencies’ March 2011 estimate for that 10-year period.
How can this be? How could anyone take a $50 billion improvement in the projections over last year and turn it into an alleged doubling of costs?
Here’s how. You pick a big number and then use it to either tell the world you do not possess the most basic understanding of the actual math or you just out-and-out lie about what the number means. I’ll leave it to you to decide which is at work in this instance.
And then you simply ignore the CBO estimate projecting that the ‘hit’ to the deficit is actually lower than anticipated last year-
Over the 10-year period from 2012 through 2021, enactment of the coverage provisions of the ACA was projected last March to increase federal deficits by $1,131 billion, whereas the March 2012 estimate indicates that those provisions will increase deficits by $1,083 billion. The net cost was boosted by an additional $168 billion in estimated costs for Medicaid and CHIP and $8 billion less in estimated revenues from the excise tax on high-premium health insurance plans. But those increases were more than offset by a reduction of $97 billion in the projected costs for the tax credits and other subsidies for health insurance provided through the exchanges and related spending, a reduction of $20 billion in the projected costs for tax credits for small employers, and a reduction of $107 billion in deficits from the projected revenue effects of changes in taxable compensation and penalty payments and from other small changes in estimated spending.
If you will, just this once, read the actual CBO report, it will be an eye-opening experience. After you do, and have satisfied yourself that maybe those who you have counted on to inform your own opinion might be misleading you—ask yourself why they would do that.
And then ask yourself why anyone would take a proposed, one-time free visit with your physician to discuss how you want your medical treatment to be handled when you reach the end of your life— thereby taking the burden from your family—and turn such a proposal into the “death panels”. We all know that the end of life is when the big bucks are spent in health care just as we know that, when given a catalyst to face the issue, people will make decisions for themselves that will prevent a terrible waste of money as children try to save a parent’s life that cannot be saved or that would be something other than what that parent would have wanted.
If you don’t begin to see the extraordinary effort that has—and is—being made to distract you from the benefits of the Affordable Care Act—all in the name of the special interests who stand to lose—and begin to question whether you have given this law a fair chance, then you are not going to be reached.
But, if you will take just a moment to read the CBO estimate, you will at least know that you are not being told the truth by those whom you believe have your best interests at heart.
Read the report.