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New Study Shows Obamacare Adds $340 Billion to Deficit
April 25, 2012
Charles Blahous, an economist estimates in a 52-page studyreleased by George Mason University's Mercatus Center that the President’shealthcare overhaul will add at least $340 billion to the deficit and notreduce it as the President has claimed. Blahous, who serves as public trusteeoverseeing Medicare and Social Security finances, also found that current federalaccounting practices have masked the true costs of the massive legislation. Thestudy entitled “The Fiscal Consequences of the Affordable Care Act,” wasreleased early this April.
This is not the first study which shows that thePresident’s healthcare plan would add to our federal debt. The non-partisanCongressional Budget Office (CBO) found in a 2011 estimate that repealing thelaw would increase deficits by $210 billion from 2012 to 2021, on top of our annualdeficits which run well into the $1 trillion range. The law expands healthinsurance coverage to more than 30 million new people by paying for it with Medicarecuts, as well as new taxes and fees.
The study found a number of facts which support thesefindings:
- The health care's law deficit cushion has been reduced by more than $80billion because of the administration's decision not to move forward with a newlong-term care insurance program that was part of the legislation. TheCommunity Living Assistance Services and Supports program raised money in theshort term, but would have turned into a fiscal drain over the years.
- The cost of health insurance subsidies for millions of low-income andmiddle-class uninsured people could turn out to be higher than forecast, especiallyif employers scale back their own coverage.
- Various cost-control measures, including a tax on high-end insurance plansthat doesn't kick in until 2018, could deliver less than expected.
The decision to use Medicare cuts to finance theexpansion of coverage for the uninsured will actually make matters worse thestudy also found. The money from the Medicare savings will have been spent, meaningthat Congress will have to find additional cuts or revenues to forestall itsimpending insolvency. Under federal accounting rules, the Medicare cuts arealso credited as savings to that program's trust fund.
This latest study is another example of thetricky-accounting and shaky math the Affordable Care Act’s cost estimates havebeen based on. It’s time for a true accounting of just how much the UnaffordableAffordable Care Act will cost Americans. With the federal debt well into thered to the tune of $15 trillion, we can’t afford to wait to find out.
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