Health Care Programs: Missing The Real Cost

This past week the CBO announced that Obama care, when costed out over a 10 year period that was different than the 10 year period when it was voted on, will cost more than originally stated.  For many, this comes as no surprise.  The fact that government programs cost more than originally stated isn’t anything new, in fact, it’s been going on for decades:

Only 1 of the programs above managed to come even close to half of the real cost; Medicare Catastrophic coverage.  And THAT program was eliminated before it took effect.

The CBO is estimating the last year of the measurable ten to cost nearly $265 billion.  If we average the misses from the above program we can expect that last year to really cost $1.8 trillion alone.

13 responses to “Health Care Programs: Missing The Real Cost

  1. Two points
    1) you acknowledge that the CBO was measuring a different period of time. The original estimate included more years without the plan in effect than the current estimate, and my understanding is that this is responsible for a large portion of the increase.
    2) Any consideration of the cost should also consider the benefit, and the costs associated with the program are more than offset by associated savings over the long term. Health care costs would be spiraling without the new health care law and that’s the baseline to measure against.

    • you acknowledge that the CBO was measuring a different period of time. The original estimate included more years without the plan in effect than the current estimate, and my understanding is that this is responsible for a large portion of the increase.

      This is true. However, Obama continually stood by the “cost” of the bill. I think he owns the increase.

      Health care costs would be spiraling without the new health care law and that’s the baseline to measure against.

      Time will tell. I suspect that health care costs will continue to spiral upwards.

  2. This past week the CBO announced that Obama care, when costed out over a 10 year period that was different than the 10 year period when it was voted on, will cost more than originally stated.

    This is a lie.

    From the CBO report the Republicans were lying about: “CBO and JCT now estimate that the insurance coverage provisions of the ACA will have a net cost of just under $1.1 trillion over the 2012–2021 period—about $50 billion less than the agencies’ March 2011 estimate for that 10-year period”.

    • This is a lie.

      I’ll forgive the fact that you are calling me a liar.

      However, the statement is true. I said:

      This past week the CBO announced that Obama care, when costed out over a 10 year period that was different than the 10 year period when it was voted on, will cost more than originally stated.

      The original price tag of the bill was $940 billion. The most recent CBO estimate of the bill is at $1.76 trillion.

      1.76 trillion is about double 940 billion.

      From the CBO itself

      Estimates Through Fiscal Year 2022

      This report also presents estimates through fiscal year 2022, because the baseline projection period now extends through that additional year. The ACA’s provisions related to insurance coverage are now projected to have a net cost of $1,252 billion over the 2012-2022 period; that amount represents a gross cost to the federal government of $1,762 billion, offset in part by $510 billion in receipts and other budgetary effects (primarily revenues from penalties and other sources).

  3. No, I was simply pointing out that the folks you trusted were lying.

    Measured against the same time period, the savings are higher.

    The original price tag of the bill was $940 billion.

    That number doesn’t appear at the link; what’s your citation for it?

    Remember, the ACA did a bunch of things.

    From the CBO on the insurance coverage provisions of the ACA: “Over the 10-year period from 2012 through 2021, enactment of the coverage provisions of the ACA was projected last March to increase federal deficits by $1,131 billion, whereas the March 2012 estimate indicates that those provisions will increase deficits by $1,083 billion. … This report also presents estimates through fiscal year 2022, because the baseline projection period now extends through that additional year. The ACA’s provisions related to insurance coverage are now projected to have a net cost of $1,252 billion over the 2012-2022 period; that amount represents a gross cost to the federal government of $1,762 billion, offset in part by $510 billion in receipts and other budgetary effects (primarily revenues from penalties and other sources).”

    Add in another year, and gross costs go up by some amount. This isn’t an “OMG IT’S TWICE AS EXPENSIVE” thing.

    The CBO on the cost of the bill altogether: “CBO and JCT have previously estimated that the ACA will, on net, reduce budget deficits over the 2012-2021 period; that estimate of the overall budgetary impact of the ACA has not been updated.”

    Comparing apples to apples, the bill is now projected to save more.

    Not sure it’s accurate to call the ACA a “program”, in the way that, say, Medicare is a “program”, as the ACA implements policy changes & creates bodies like the IPAB, rather than giving a new program folks can qualify for & receive. That may well be an “angels on the head of a pin” debate as to the definition, but it does involve the claim your chart makes, I think.

    • No, I was simply pointing out that the folks you trusted were lying.

      That’s my analysis of the reading. I didn’t quote a source for the basis of my post.

      I claim that initially, Obama used the fact that the bill costs $940 billion. That is reported here:

      http://www.cbsnews.com/8301-503544_162-20000691-503544.html

      From the CBO on the insurance coverage provisions of the ACA:

      Right. That’s what I quoted above.

      So you take the 940 that Obama SAID it would cost and then compare it to what it REALLY is gonna cost : 1,762.

      The CBO now states Obamacare will cost more than originally estimated. Which is what I said.

      When you say that Obamacare is 50 billion less, you are comparing it to last March’s number; and I’m willing to cede that. I’m comparing it to the original number. The number Obama said it would cost us when he signed it.

      • Is that number for the bill altogether, or the insurance coverage provisions?

        Either way, looking at the big picture– from your most recent link, the CBO “estimates the health care plan will cut the federal deficit by $130 billion in its first 10 years and by $1.2 trillion in its second 10 years. … The CBO also expects the bill to reduce the annual growth in Medicare expenditures by 1.4 percentage points per year, Democrats say, and extend Medicare’s solvency by at least 9 years. An additional 32 million people should get coverage under the bill, expanding health care coverage to 95 percent of Americans.” And from the more recent CBO release, “CBO and JCT now estimate that the insurance coverage provisions of the ACA will have a net cost of just under $1.1 trillion over the 2012-2021 period-about $50 billion less than the agencies’ March 2011 estimate for that 10-year period.”

        What a sound policy this is! What a good thing for America.

  4. Say I pass a law that starts in 2020 and costs a dollar each year. The CBO comes out with a report in 2012 that projects a ten year cost of $2, right? If in 2014, the CBO projects a ten year cost of $4, that’s not because the law is now twice as expensive as once projected, it’s because the ten year period includes two more years with the law in effect.

    • Say I pass a law that starts in 2020 and costs a dollar each year. The CBO comes out with a report in 2012 that projects a ten year cost of $2, right? If in 2014, the CBO projects a ten year cost of $4, that’s not because the law is now twice as expensive as once projected, it’s because the ten year period includes two more years with the law in effect.

      I get the concept. And I understand what Obama did.

      He built the law such that the scoring of it by the CBO would come in under $1 trillion. He needed that because the nation had trillion dollar program fatigue. So, he was the one that claimed the law would cost only $940. He was the one that came out and said it would reduce the deficit [because collecting taxes for 10 years while providing service for 6 will do that].

      It was Obama and the dems that advertised the cost of the law. Had he come out and honestly said that his program would cost $x dollars per year and that while the CBO was costing it at $940 now but that cost would rise as the ten-year window expanded to include 10 years of services, you might have a case.

      But he didn’t.

  5. Interesting article that debunks a lot of the claims used to try to argue against Obama’s reform:
    http://nymag.com/daily/intel/2012/03/obamacare-haters-angered-by-facts.html

    • Interesting article that debunks a lot of the claims used to try to argue against Obama’s reform

      I’m going to read the article now. But you’ll have to forgive me if I’m intermediately biased against it based only on the title in the URL.

    • Interesting article that debunks a lot of the claims used to try to argue against Obama’s reform:

      Yeah, so I was right about the partisan tone of the article. And the data analysis is the same as we’ve been discussing. Basically it’s that the original costing by the CBO took into account 10 years of taxing with only 6 years of services. Now that we’re deeper into the “future” more years of service ave to be accounted for. And this is raising the real cost of the bill by nearly double.

      We all knew this would happen.

      Everyone except the Left, both professional and partisan folks who advocate for democrat ideals. THEY were the people who ere lying to us saying that the bill would cost $940 billion. Obama did this on purpose to get the bill passed. He KNEW it had to come in under a trillion and so he stood up there. And lied.

      So far so “good”. The cost of the bill is tracking year by year pretty accurately. Given that, Obama should have stood up and told us that when the full weight of the bill is costed, it’s going to be more than $1.5 trillion. Instead, he took for granted that the left, who we know aren’t good with things like economic facts would bite on his less than honest assessment and trumpet the bill as a success.

      So, if Obama expects us to buy the fact that the bill would only cost 940 billion, I now expect him to buy the fact that the bill will now cost nearly double that.

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