Earlier this week, the Congressional Budget Office released its revised estimates of what Obamacare will cost, now that the Supreme Court has weighed in. As I read the report, it occurred to me to ask: how have the CBO’s estimates changed over time? It turns out that, even when you compare the years that are common to each CBO report, a clear trend emerges. Today, the CBO believes that Obamacare will spend more money, raise more tax revenue, and reduce the deficit less than the agency thought in 2010. And things could get worse.
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Be warned: this article contains a lot of numbers. If your eyes glaze over reading numbers (as mine do), focus on the charts. The charts tell the story of how the CBO’s estimates have changed over time.
Introduction
For the purposes of this analysis, I looked at three sets of CBO projections: (1) the March 20, 2010 report that was published hours before the final Obamacare vote in Congress; (2) the February 18, 2011 report estimating the deficit impact of repealing Obamacare; and (3) the July 24, 2012 report estimating the deficit impact of repealing Obamacare after the Supreme Court ruling.
The first report looked at the fiscal impact of the law from 2010-2019; the second from 2012-2021; and the third from 2013-2022.
Hence, there are two ways to compare the three reports: first, an apples-to-apples comparison of the seven years (2013-2019) common to the three reports; second, by comparing the total ten-year cost of the law reported in each case, to show how the law’s costs increase over time.
There are small technical differences between the first report and the next two, because repealing Obamacare is different from passing it. But these three reports are the ones that go into Obamacare’s fiscal impact at the level of detail I needed to conduct this analysis.
Spending projections for 2013-2019 have increased by $124 billion
In 2010, the CBO estimated that Obamacare’s spending on new programs would amount to $929 billion from 2013-2019, and a ten-year cost of $944 billion. Those figures increased to $956 billion and $1,442 billion respectively in 2011, and $1,053 billion and $1,856 billion in 2012.
By “spending on new programs” I mean all the spending in Obamacare on new programs, principally the cost of expanding coverage via Medicaid and the new exchanges. These figures don’t include the cuts to Medicare, which I will discuss later.
What’s remarkable is that this increased spending comes despite the fact that the CBO estimated that state cutbacks in the Medicaid program, in the wake of the Supreme Court ruling, would reduce government spending by $84 billion from 2012-2022.
In 2010, the CBO estimated that Obamacare’s tax increases would amount to $626 billion from 2013-2019, and $631 billion over ten years. In 2011, the CBO estimated totals of $624 and $968 billion, respectively.
In the most recent report, the CBO projected a 2013-2019 total of $672 billion, and a ten-year total of $1,221 billion.
CBO: Obamacare Will Spend More, Tax More, and Reduce the Deficit Less Than We Previously Thought - Forbes
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