CBO rescores ObamaCare: lower cost, fewer people covered
The Congressional Budget Office released updated scoring for ObamaCare on Tuesday, in the wake of the Supreme Court’s on-the-fly modification of the extremely complex law. The highlight of the new analysis is that ObamaCare will cost $84 billion less over the next 10 years, because 3 million fewer people will receive coverage.
That’s a savings of $28,000 per uncovered person, which isn’t too shabby, but seems rather contrary to the entire point of ObamaCare. As the Heritage Foundation notes, “While the Medicaid expansion extended to all individuals below 138 percent of the federal poverty line, the exchange subsidies are only available to those earning between 100 percent and 400 percent of the federal poverty level, which means only a portion of would-be new Medicaid enrollees will qualify for subsidies.”
This brings the total number of uninsured from an original CBO estimate of 22 million at the time of ObamaCare’s passage, to 30 million today. That makes the number of people who don’t have insurance under ObamaCare roughly equal to the number of new people it will cover – it’s basically a wipe. 30 million uninsured is about triple what President Obama predicted, making it fall neatly into line with his other predictions, like the unemployment rate after his trillion-dollar “stimulus” bill was passed.
And the reality is likely to be a lot worse, because the CBO estimates – like most estimates prepared under the difficult conditions presented to that overworked office – tend to be almost absurdly optimistic in the government’s favor. That’s because they assume a very high level of compliance with regulations, combined with minimal “unintended consequences.” For example, the CBO almost always over-estimates the income from a tax increase, because their operating parameters make them underestimate the number of individuals and business entities that will change their behavior to avoid the tax.
In this case, the problem is the number of people that will be eager to pay a tax, namely the notorious shape-shifting “tax penalty” of the individual mandate. Basically, healthy people are being told they must purchase fabulously expensive insurance policies – made far more costly by ObamaCare’s mandates – or else pay a tax that’s only ten or twenty percent of what the insurance would cost. They can wait to buy insurance until they get sick, because they’re guaranteed coverage. The result will be greatly increased costs to insurance companies, combined with a modest influx of tax revenue to the government. What do you suppose that will do to the health insurance and medical industries over the coming decade?
These costs are also projected assuming a certain average level of compliance from state governments, who in truth have been noticeably reluctant to shoulder all the costs ObamaCare drops on them. If more states refuse to expand Medicaid and set up their “public exchanges,” the cost of ObamaCare will rise, and so will the number of people without coverage.
So, we’re talking about a $1.7 trillion program with a trillion dollars in new taxes, plus $700 billion in Medicare cuts (up considerably from the original estimate of $500 billion), coupled with price controls and other regulations that are guaranteed to damage the quality and supply of actual medical care, which doesn’t really do much for the overall level of American health care coverage… and that’s under extremely rosy best-case scenarios. The net effect of ObamaCare seems to be shuffling around the people who don’t have coverage, at fabulous expense to American taxpayers and businesses, with a corresponding cost in jobs destroyed. There is no better textbook example of abject legislative failure.