Right Opinion

Costs for ObamaCare Skyrocket

Arnold Ahlert · Mar. 16, 2012

A devastating new report from the Congressional Budge Office.

A funny thing has happened on the way to the implementation of Obamacare, aka the Patient Protection and Affordable Care Act (ACA): it’s become much less affordable. When the law was passed in 2010, the Congressional Budget Office (CBO) estimated it would cost $940 billion over a ten year period. The new estimate? $1.76 trillion.

But it gets even better. A year ago, the CBO estimated that one million workers would no longer get insurance coverage from their employers when the healthcare law was fully implemented. That estimate has now been revised as well. By 2016, the CBO now projects that 4 million fewer people will be getting their healthcare covered by their employer. Furthermore, the overall number of currently uninsured people who would be covered by the new law has been reduced from 32 million to 30 million. And, in an ironic twist, because the law provides many people with partial, rather than comprehensive coverage, the number of non-elderly legal residents forced to obtain supplemental insurance policies will rise from 82 percent in 2012, to 93 percent in 2022.

None of this surprises those who warned that the original cost estimates of the healthcare bill were little more than Enron-like accounting gimmicks. The most egregious of those gimmicks was to delay the full implementation of the law until 2014, while using a combination of tax increases and Medicare cuts beginning with the law’s passage in 2010 to fund it. Since CBO projections are based on ten-year estimates, the original $940 billion price tag reflected ten years of payments for only six years of coverage.

The CBOs new projections cover the years 2013 extending through 2022, when the true cost of the plan can no longer be obscured. And this number only reflects nine years of projections. Americans must wait until next year to get a true ten-year cost estimate, assuming the law survives the Supreme Court or repeal by Republicans should they attain a congressional majority and the White House. Since the cost projection in 2022 currently stands at $265 billion, one can assume that the cost of the plan in 2023 will be at least that high. Add $265 billion to $1.76 trillion and the real cost of the healthcare plan nears $2 trillion over the course of a decade.

Furthermore, these are only big-picture projections. The CBO also projected an increase of $168 billion in Medicaid compared to its projection a year ago, coupled with $97 billion less spent on subsidies for people to purchase insurance on government-run exchanges, and $20 billion less on tax credits to small employers. This represents an overall increase of $51 billion over last year’s CBO estimates. Yet the CBO is still projecting the plan will cost $48 billion less from 2012 to 2021.

Why? Because government expects to collect the $99 billion necessary to reach those savings via a one-two combination of fines and tax hikes. The fines will be imposed on both people who refuse to abide by the individual mandate forcing them to buy coverage, and the aforementioned employers who will drop coverage for their employees. The tax hikes will be imposed on all Americans who pay taxes.

The CBO report also reveals why they felt the adjustments were necessary. Chief among them were a “macroeconomic forecast published in January 2012, which reflects a slower recovery when compared with the forecast published in January 2011,” and  "updated projections of the growth in private health insurance premiums, reflecting slower growth than the previous projections.“ The former estimate reflects the reality that the Obama administration’s  Keynesian-inspired economic plan that has consisted of running up more debt more quickly than any administration in our nation’s history is largely a bust.

Yet it is the latter estimate that reveals both the facility this president has for saying things that have no basis in fact, as well as the real long-term aim of the American left. First, the president. It was Mr. Obama who claimed the new healthcare law would cost "around $900 billion over 10 years – less than we have spent on the Iraq and Afghanistan wars, and less than the tax cuts for the wealthiest few Americans that Congress passed at the beginning of the previous administration.” He also claimed “if you’ve got health insurance, you like your doctors, you like your plan, you can keep your doctor, you can keep your plan. Nobody is talking about taking that away from you.”

We now know the first quote is utterly bogus. As for the second quote, the same day the president made it he also backed away from it, telling Diane Sawyer that “I can’t pass a law that says, ‘I’m sorry, employers, you can never make changes to the health care plans that you provide your employees.’ What I can say is that the government is not going to force you to, your employer or you to join a government plan, for example. If you’re happy with it, and your employer’s happy with it, keep it.”

Not exactly. A survey taken last year by Towers Watson revealed that nearly ten percent of mid-sized or large employers expect to drop employee health coverage when the ACA is fully operational in 2014. And that was the optimistic survey. One taken by McKinsey & Company estimates that “[O]verall, 30 percent of employers will definitely or probably stop offering ESI in the years after 2014” and that among employers far more familiar with the ACA, “this proportion increases to more than 50 percent.”

Which brings us to the second part of the equation, namely the America left’s long-term aim of eliminating private healthcare completely. This plan was designed with the aim of making employers unhappy and getting more and more people on government-provided healthcare. This is precisely why the CBO also projected that “in 2016, for example, the ACA is now estimated to reduce the number of people receiving health insurance coverage through an employer by an additional 4 million enrollees relative to the March 2011 projections,” even as it noted that from 2016 on, between 20 million and 23 million people will receive coverage through the new insurance exchanges, and 16 million to 17 million people will be enrolled in Medicaid and CHIP.“

The left’s fallback position? No one is forcing companies to drop coverage or people to enroll in government-run healthcare plans. Technically that is correct. But such disingenuousness reveals that the left is thoroughly capable of understanding economics – when it suits their purposes. The heart and soul of free-market capitalism is incentive. The ACA perversely exploits such incentive by making it cheaper for employers to pay fines than keep their workers on company healthcare plans. It also forces insurance companies to accept high-risk patients even as it forbids them to charge higher rates to those people for assuming that greater risk. Moreover, the bill gives the Secretary of Health virtually unlimited power to set policy.

This last bit is key. When the ACA was passed, the details of its implementation were left up the the Secretary of Health. As a result, there are 700 instances where the language in the bill says that she "shall” do something, more than 200 instances where she “may” do something, and 139 occasions where the “Secretary determines” something as well. As the latest fight over contraception coverage demonstrates (leaving freedom of religion aside for the moment), the American left believes it can force insurance companies to cover something they deem a “right” – simply by issuance of a command that they do so.

Dr. Hal Scherz, a pediatric urological surgeon on the faculty of Emory University Medical School illuminates where such “incentive” inevitably leads. "Private insurance companies are already exiting from the stage because they’ve seen the writing on the wall and determined that there is no future for them against the federal plans and regulations,“ he explains. "Only a few, very large private companies may survive.”

The key word in that statement? “May,” meaning that even the largest, most profitable insurance companies might be incapable of surviving this socialist onslaught. And only the terminally naive could possibly believe that destroying the private insurance market this hasn’t been one of the chief planks of the left’s strategy to impose government control over one-sixth of the American economy, even as they and their media cheerleaders will maintain a facade of “plausible deniability” for doing so. And if healthcare costs skyrocket exactly as projected? The American left considers that a small price to pay in return for a monumental expansion of the state.

It’s up to the Supreme Court to derail what amounts to one of the greatest power grabs in our nation’s history.

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