Remember all that stuff about Obamacare, aka the Affordable Care Act, not only costing nothing, but actually helping improve the budget deficit? That not only was it a free lunch, but it would provide portions of breakfast and dinner too?
Well, as I’ve explained before, Obamacare never really helped the budget, because all the cuts and taxes assessed to finance it became unavailable in the future to help alleviate the deficit.
But as Social Security and Medicare Trustee Chuck Blahous writes in the Weekly Standard, it is now clear that Obamacare is not going to provide any part of dinner or breakfast, and further, it’s going to start stealing off your lunch plate.
That is, as I and I’m sure most of you expected, this monstrous new welfare program is going to start adding to the deficit.
According to Blahous:
CBO currently estimates that the ACA’s coverage provisions will cost the federal government $92 billion a year by FY2015. This is roughly 0.5 percent of projected U.S. economic output for 2015, well exceeding the relative costs of Social Security and Medicaid at similar points in their histories . . .
CBO projects that its annual costs will hit $200 billion by FY2020, or nearly 0.9 percent of GDP. Yet this assumes that lawmakers will be content to allow the ACA’s health insurance subsidies to grow more slowly than low-income beneficiaries’ health care costs, as the law now stipulates.
Thus there is every reason to believe that the ACA’s eventual costs will far exceed initial estimates, as happened with Social Security, Medicare, and Medicaid.
The administration is ditching unworkable and politically touchy “pay-fors.”
No sooner was the ink dry on the ACA than the law’s various “pay-fors” began to be tossed overboard, one after the other. The ACA’s CLASS Act (Community Living Assistance Services and Supports, a long-term care program) was financially unsound from the beginning, had to be suspended a little over one year later, and was eventually repealed.
The original CBO score had assumed that CLASS would provide $86 billion of net financing for the ACA over the first 10 years.
Roughly $100 billion of financing in that first decade was also to come from penalties on individuals (for failing to carry health insurance) and employers (for failing to offer it). But the Obama administration has repeatedly postponed enforcement. Unsurprisingly, there is now a campaign to abandon the individual mandate penalty altogether, despite advocates having previously touted it as essential to the workings of the ACA.
The administration has also been dropping cuts to Medicare Advantage required under the ACA, with the costs of these decisions still unknown.
There doesn’t seem to be political will to stave off future cost increases either.
After shaking a favorable score out of CBO in 2010 based on the assumption that the law would be enforced as written, Democrats now exhibit little motivation to follow through with its most politically radioactive savings measures.
There is little reason to suppose that provisions looming on the horizon, such as the tax on so-called Cadillac health insurance plans and the decisions of the Independ-ent Payment Advisory Board, will be enforced any more diligently than others have been to date.
Why? In part, Blahous explains, because Democrats rammed this lemon through without bothering to corral any Republican support. So unlike with past social programs that have been passed bipartisanly, Republicans have no skin in the game and therefore no appetite to try to help out by voting for unpalatable tax increases or spending cuts.
And Democrats don’t want to go it alone.
I would add to this that Obama decided to pass sweeping legislation that lacked, and has always lacked, popular support. Even now that we know what’s in it, a discovery Nancy Pelosi famously thought would make us love the law.
What it means is that even the “good part” of all this – the law and its benefits – is disliked. So, good luck trying to pass the bad part – that is, the things we need to do to pay for it.
If only peasants like you and me would see the wisdom of Obama and Ezekiel Emanuel and Kathleen Sebelius. We’d give our right kidneys to make this work.
And once the quality of health care begins to decline under the law, that’s exactly what we might be doing.