America simply can’t afford Obamacare. According to a new Congressional Budget Office (CBO) report, the new entitlement will grow an explosive 6 percent annually from 2017 to 2022, impose a slew of new taxes which will ripple through the economy, and will still leave 29 million people without health insurance. In other words, it even fails on its own terms, which ostensibly is to provide health coverage for everybody.
The Heritage Foundation’s James Capretta calls Obamacare “a budgetary disaster.” New entitlement spending is estimated to be $2 trillion for a full decade of implementation, and new taxes will extract $1 trillion for federal coffers. These are taxes on workers’ income as well as insurers and the makers of medical devices, some of which will be passed on to consumers. Higher taxes mean less disposable income to spend, which will act as a drag on economic growth — a downer CBO estimates don’t take into account.
CBO now calculates premiums through government-sponsored exchanges will rob $2,400 from the average family budget. An increase in premiums is predicted because those with higher medical costs are expected to quit Medicaid and move into exchanges to take advantage of a premium subsidy they are required to provide. Someone, somewhere, has to pay for these subsidies, which will be spread across the system.
The new report has many flaws. For example, it underplays expenses by projecting $700 billion in spending reductions in Medicare and Medicaid. Much of these projected savings come from supposed across-the-board cuts to providers, something that has never happened before. A more realistic estimate, Mr. Capretta warns, is that Medicare alone would add $340 billion to projected budget deficits under the plan.
CBO also expects only 3 to 5 million workers will shift to exchanges despite their large subsidies. If that number roughly doubles, Obamacare costs climb by $36 billion for the decade. This doesn’t take into account those who will opt out and pay what the Supreme Court has deemed a tax. If even a small number wait to get into exchanges until they are sick, costs will skyrocket because exchanges will have to cope with more higher-cost patients than planned.
The numbers fail to take into account billions the IRS and other federal agencies will have to spend on enforcement. Nor are the implications of this new unfunded entitlement considered in relation to America’s already high debt level, which is set to hit the critical 90 percent of gross domestic product within a decade, which is when it begins to impact growth.
The scary fact is the bureaucrats with the green eyeshades haven’t realistically added up all the indirect but real costs of Obamacare such as the burden on consumers and the impact of higher taxes on economic growth and employment. It’s a mistake to throw more money into a national-health scheme that will leave almost 30 million Americans without insurance and many more with worse access to care.
The Washington Times
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