CBO: OOPS Our $940 Billion Number Was Wrong – ObamaCare to cost $1.76 trillion over 10 yrs – UPDATED!

Remember when Obama and the Democrats went on and on saying that ObamaCare would only cost $900 Billion so that it would be revenue neutral (not ad to the deficit)?

It wasn’t just this writer back in his college days who said that this number was a pipe dream. Many conservatives who ran the numbers said it would cost over $2 trillion as I reported in my college days (1, 2, 3, 4).

But it gets worse, the CBO is still underestimating the cost. Why? ObamaCare doesn’t start to spend huge money until the last phase of it’s implementation in 2014, but the new taxes are already starting to be phased in and really ramp up in 2013 just after the election. So ObamaCare is taking in money for over a year before the large expenses start incurring. If we take that into account and start the ten years in 2014, which is much more honest, the expense according to my estimates will be close to $2.3 trillion over ten years. Feel free to mark me on this readers, as I am certain others will verify this in time, as my earliest predictions about ObamaCare have been spot on so there is no reason to believe my estimate will prove to be any different (the Examiner piece below mentions the nine year issue as well).

Remember the adverse selection “death” spiral we spoke of in posts below? The longer ObamaCare goes on the more the costs will rise exponentially as that is exactly what it is designed to do. If Democrats manage to prevent an ObamaCare repeal, they know darn well they will have to replace it with a total government take over soon or the system will blow up in a short time.

Washington Examiner:

President Obama’s national health care law will cost $1.76 trillion over a decade, according to a new projection released today by the Congressional Budget Office, rather than the $940 billion forecast when it was signed into law.

Democrats employed many accounting tricks when they were pushing through the national health care legislation, the most egregious of which was to delay full implementation of the law until 2014, so it would appear cheaper under the CBO’s standard ten-year budget window and, at least on paper, meet Obama’s pledge that the legislation would cost “around $900 billion over 10 years.” When the final CBO score came out before passage, critics noted that the true 10 year cost would be far higher than advertised once projections accounted for full implementation.

Today, the CBO released new projections from 2013 extending through 2022, and the results are as critics expected: the ten-year cost of the law’s core provisions to expand health insurance coverage has now ballooned to $1.76 trillion. That’s because we now have estimates for Obamacare’s first nine years of full implementation, rather than the mere six when it was signed into law. Only next year will we get a true ten-year cost estimate, if the law isn’t overturned by the Supreme Court or repealed by then. Given that in 2022, the last year available, the gross cost of the coverage expansions are $265 billion, we’re likely looking at about $2 trillion over the first decade, or more than double what Obama advertised.

UPDATE – ObamaCare to force increases in state Medicaid programs:

Again, this is something I wrote about and you can find on my old college blog in the four links above. One of the ways that  the costs of ObamaCare was hidden is that some of it’s implementation is through unfunded mandates to state medicaid programs.

Washington Examiner:

CBO boosts its Obamacare Medicaid cost estimate

The CBO now projects that from 2012 through 2021 the federal government will spend $168 billion more on Medicaid than it expected last year, $97 billion less on subsidies for people to purchase insurance on government-run exchanges and $20 billion less on tax credits to small employers.  That works out to a $51 billion increase in the gross cost of expanding coverage from what the CBO estimated a year ago. However, the CBO also expects the federal government to collect more revenue from penalties on individuals and employers, as well as other taxes. These revenue increases will more than offset the spending increases, according to the CBO, so it now expects the cost of Obamacare during those years to be $48 billion lower.

It’s also worth noting that we were told time and again during the health care debate that the law didn’t represent a government takeover of health care. But by 2022, according to the CBO, 3 million fewer people will have health insurance through their employer, while 17 million Americans will be added to Medicaid and 22 million will be getting coverage through government-run exchanges.

Check out the full CBO report here.

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About Chuck Norton

I write about politics, education, economics, morality and philosophy.
This entry was posted in 2012 Primary, Budget, Corporatism, Econ, Flashback!, Health Law, Lies, Obama, True Talking Points and tagged , , . Bookmark the permalink.

1 Response to CBO: OOPS Our $940 Billion Number Was Wrong – ObamaCare to cost $1.76 trillion over 10 yrs – UPDATED!

  1. Philip Hearst says:

    Hello? Did you actually read the fine print?

    The new 10 year projection covers up to 2022, not 2019 like the first projection. So you’re comparing apples and oranges. The REAL estimate from 2010 to 2019 went from 940 million to about 1.02 trillion. Either way, the country will see a NET SAVINGS from reduced health care spending as well as the closing of tax loopholes and new fees on insurers and large employers.

    Check out the facts here: http://www.politifact.com/georgia/statements/2012/mar/27/tom-price/us-rep-price-health-care-bill-cost-projections-ros/

    PoliticalArena.org Editor responds:

    Thanks for showing us another example of why journalists make poor economists. The Heritage Foundation has much more accurate numbers on this which are closer to the $2 trillion dollar estimate.

    The tax numbers Politifact are counting on are based on static models and assume people will just gladly pay the tax instead of changing their behavior to avoid it. In order to accurately guage such an impact both the CBO and Politifact would have to include complexities such as Game Theory and the Laffer Curve which is economics that is WAY over the heads of anyone at Politifact.

    Name me a government program that the CBO was able to accurately predict the cost of: You can’t.

    Name me a tax increase that the CBO was able to accurately estimate the increase in revenue of: You can’t.

    Name me a tax cut that showed the massive decrease in revenue that the CBO always predicts: You can’t – because many tax cuts when they are real rate reductions actually result in an increase in revenue.

    http://video.foxbusiness.com/v/1539292778001/gop-discovers-17t-funding-gap-in-health-care-law/

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