IBD: The Real Cost Of ObamaCare
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The Real Cost Of ObamaCare
Health Reform: The linchpin of ObamaCare 2.0 is that 31 million uninsured will be covered at little added cost. But in fact, White House estimates for low costs are based on little more than accounting tricks.
The president’s plan “puts our budget and economy on a more stable path by reducing the deficit by $100 billion over the next 10 years — and about $1 trillion over the second decade — by cutting government overspending and reining in waste, fraud and abuse,” the White House says on its Web site.
Sound too good to be true? It is.
None of the numbers can be believed. The plan is a result of blatantly dishonest accounting for the real costs of the program, while grossly overstating its benefits. Americans should know the actual 10-year cost is closer to $2 trillion over 10 years, not the $950 billion claimed, when all the actual costs are toted up.
How can there be such a wide gap? Mainly because the president’s plan doesn’t provide benefits until the second half of the first decade. So it pretends that it will “only” cost $950 billion. But once the program kicks in, the full 10-year cost of benefits will be included — at a real current cost of $2 trillion or more.
Or, as columnist Charles Krauthammer, himself a trained physician, told Fox News’ Bill O’Reilly: “It’s a trick. The way the Democrats got under (the spending limit imposed by Obama) was by making 98% of the expenditures, the benefits that you and I would get under the bill, occur in the second half of the decade.”
That’s not all the numbers trickery. Take the plan’s so-called “doctor fix.” Under current law, physicians are slated for a 21% cut in Medicare fees this year. Those cuts, if enacted, would lead to many doctors leaving Medicare. A proposed “fix” will cost some $229 billion over 10 years. But that new cost won’t be included as part of the health care bill. Only phony Medicare “cuts” will.
Then there’s the promise to remove new taxes on so-called “Cadillac Care” health plans. Originally, Democrats wanted to exclude only their pet unions from these new taxes. But after a huge outcry, the exclusion has been extended to most taxpayers.
Now, only the rich will be hit with these grossly unfair levies. But the cost of excluding the others doesn’t appear to be accounted for.
Even with all this, estimates say the Obama plan will jack up taxes by $629 billion over the decade. That includes tax hikes on the middle class — something candidate Obama vowed he’d never do.
Then there’s the Nebraska reversal. To get the Cornhusker State to go along with ObamaCare, it was exempted from some new Medicare costs. That created an uproar among the other 49 states. So the new bill treats all the states the same. But again, it doesn’t seem to account for the new cost run-up.
When you tote it all up, the real cost is in excess of $2 trillion. Not the $950 billion as claimed. And deficits will rise by $600 billion, not fall by $1 trillion.
It couldn’t be worse, right? Wrong.
Former Office of Management and Budget official James Capretta, now a fellow at the Heritage Foundation, asserts the real 10-year costs of President Obama’s bill are likely $2.5 trillion — “with the strong likelihood of far exceeding this amount.”
Promised spending cuts, he argues, will never be made because they would put a number of institutions in financial trouble.
Meanwhile, huge subsidies offered to individuals and businesses to buy their insurance through government-run “exchanges” almost guarantee costs will soar far beyond expectations.
Under the Senate’s bill, for instance, the subsidy for a family of four with a $60,000 income covered by an employer-based health plan would be $4,500 less in 2016 than for a similar family buying from the heavily subsidized government exchanges. By forcing all Americans to buy insurance, premiums will rise by at least 10%, and possibly higher.
This will decimate the private insurance market and create a de facto nationalized health care system — at much higher cost than today. Because of the dishonesty about costs, Obama’s plan is a nonstarter. And Thursday’s health care summit is little more than farce.