I covered the legislative journey for the PPACA/Obamacare tax bill from the beginning. In March, 2010, I wrote an article about the Congressional Budget Office’s inability to gauge discretionary spending in the bill. Subsequent exchanges with other members of the media indicated most of them had not read the report in full.
The CBO report should have red-flagged the bill for anyone considering it.
At that point in time Democrats and President Barack Obama said Obamacare would save Americans money and make insurance affordable for the uninsured.
Republicans were dead set against the bill because the constituents they represented did not want it, many of us remembering the debacle surrounding Hillarycare in the 1990s.
In 2010 CBO assessed budgetary effects:
“Major costs for such activities subject to future appropriation would include:
• Costs to the Internal Revenue Service (IRS) of implementing the eligibility determination, documentation, and verification processes for premium and cost sharing credits. CBO expects that those costs would probably be between $5 billion and $10 billion over 10 years.
• Costs to the Department of Health and Human Services, especially the Centers for Medicare and Medicaid Services, and the Office of Personnel Management of implementing the changes in Medicare, Medicaid, and the Children’s Health Insurance Program, as well as certain reforms to the private insurance market. CBO expects that those costs would probably be at least $5 billion to $10 billion over 10 years. (The administrative costs of establishing and operating the exchanges were included as direct spending in CBO’s estimate for the legislation.)”
Obviously, probably is a very troublesome word when it comes to projecting costs.
CBO projected more than $50 billion in costs for the known discretionary spending—none of that amount would be spent for healthcare, but for government infrastructure.
For instance, IRS will need an enforcement group to determine whether you’re violating the law by not buying health insurance.
CBO admitted there was no way to come up with a total for the discretionary spending:
“The table does not represent a complete estimate of all discretionary costs associated with PPACA, because it excludes the implicit costs to the IRS and HHS that are described above as well as explicit authorizations in PPACA for programs for which amounts of spending are not specified for any year. In particular, the legislation would authorize many additional new activities with a broad authorization of the appropriation of ‘such sums as may be necessary.’ CBO has not yet completed estimates of the amounts of such authorizations, and, in some cases, the legislation does not offer sufficient guidance to determine estimates of what the “necessary” amounts might be.”
At that time, the Oklahoma Insurance Commissioner, using data from the U.S. Government, said Medicare loses $1 of every $7 the program administers—14 percent of total payouts. Is that a lowball figure? Probably.
Although a story published by the Associated Press at that time no longer appears online, the AP confirmed in 2010 what I asserted for months. The story said premiums would rise for most American families opting for good coverage unless they qualify for federal assistance.
When the CBO report was issued, gross costs over a ten-year period were estimated to run $875 billion. However, cost estimates included projected revenue from an excise tax on “high-premium insurance plans” like those bought by the self-employed on the private market. Is that excise tax a reason for the steep hikes many are now seeing in their private plans? Probably?
As I noted in 2010, the CBO report raised a big red flag on the costs of the PPACA/Obamacare tax bill. Dems ignored it although they see it now. And we’re just getting started.
Ed. Notes: Boldface has been added by the author; the formal title for Obamacare is the Patient Protection and Affordable Care Act (PPACA).
(Commentary by Kay B. Day/Nov. 18, 2013)
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