Obamacare would snatch $716 billion from Medicare to pay for its expensive outlays, an startling increase of nearly $200 billion from the original estimate of the law’s impact, according to an analysis by the independent Congressional Budget Office .
The new numbers create a potential political hazard for President Obama, who desperately needs the votes of Medicare beneficiaries in senior-rich swing states like Florida and Pennsylvania.
What’s more, the cuts are regressive, affecting all beneficiaries, since they are aimed at health care providers. Serious Medicare reform, which Obama has studiously avoided during his years as president, would be much more targeted toward benefits, particularly those of wealthier seniors.
The CBO study, which comes in a analysis of GOP-backed legislation to repeal Obamacare, finds that repeal would recoup $716 billion in cuts to Medicare that Obamacare would make from 2013-2022.
According to CBO:
Of that amount, higher payments for hospital services account for $260 billion; for skilled nursing services, $39 billion; for hospice services, $17 billion; for home health services, $66 billion; and for all other services, $33 billion.
An analysis of the original March 20, 2010 CBO estimate found that Obamacare would cost Medicare $533 billion dollars during the 2010-2019 ten year period, according to the Kaiser Family Foundation, the independent health policy analysis group relied on by both Democrats and Republicans,.
Since the new estimate covers a later ten year period, the increase in Obamacare’s take from Medicare is not due to a mistake in the original estimate, but to a real and growing adverse effect of Obamacare on Medicare’s finances over time.
The huge cuts in Medicare, coupled with dramatic increases in taxes, were part of an effort by the law’s authors to overcompensate for the costs of Obamacare so they could sell the legislation as a measure that would reduce the deficit.
It does, but at substantial and growing cost to Medicare.
What’s more, the small surplus Obamacare generates is also declining, according to Chuck Blahous, one of the officials who oversees Medicare and Social Security’s finances as a Public Trustee of the programs.
Blahous, a budget expert and a former aide to George W. Bush, writes that CBO’s current estimate of the deficit savings by Obamacare over ten years is lower than last year’s estimate has been cut nearly in half from the original 2010 projection.
H/T to Alyene Senger of The Foundry, The Heritage Foundation’s blog.