Health Care Reform: CBO Releases New Cost Estimates For Obama's Affordable Care Act

In a report released Tuesday, the Congressional Budget Office revealed new estimates on the cost of President Obama's health care reform law.

The CBO, in an update to its budget outlook, now estimates that the overall coverage cost of Obama's Affordable Care Act will drop slightly, to $1.083 trillion over the next decade. Last year, the CBO estimated the price tag to be $1.131 trillion over the same period of time.

The new estimates also showed that the law will cover fewer people than originally projected. According to the latest report, the number of uninsured Americans will be reduced by 30 million by 2016-- 2 million fewer than last year's estimates.

The AP reports:

A new estimate from congressional economists says the government will run a $1.2 trillion deficit for the budget year ending just a few weeks before Election Day. It would be the fourth straight year of trillion dollar-plus deficits.

The almost $100 billion spike from earlier projections for the fiscal 2012 deficit comes almost exclusively because Congress passed legislation recommended by President Barack Obama to renew a 2 percentage point cut in payroll taxes and jobless benefits for people languishing on unemployment rolls for more than six months.

Last year's deficit registered $1.3 trillion.

The Congressional Budget Office report is just the latest confirmation of the government's severe fiscal problems. While the official CBO forecast predicts the deficit sliding to just 1 percent of the size of the economy within a few years, that estimate relies on revenues averaging about $500 billion a year over the coming decade – mostly from expiration of Bush-era tax cuts on income, investments, large estates and for families with children.

But Obama and Republicans alike agree on extending the bulk of the Bush-era tax cuts when they expire at the end of the year. A battle is set, however, on whether to extending income tax rate cuts on income in excess of $200,000 a year for individuals or $250,000 a year for couples.

If the Bush tax cuts are renewed, CBO says, and if automatic spending cuts mandated by last year's budget and debt pact are waived as seems possible, annual deficits would average more than $1 trillion a year over the coming decade and would, economists says, eventually spark an economic crisis.

While the short-term deficit mess is largely a product of the recent recession and slow recovery, the long-term crisis is a result of the impact baby boomers will have on federal retirement programs and the large projected increases in health care inflation.

"The aging of the population and rising costs for health care will push spending for Social Security, Medicare, Medicaid, and other federal health care programs considerably higher," the report said. "If that rising level of spending is coupled with revenues that are held close to their average ... the resulting deficits will push federal debt to unsupportable levels."

The budget office estimated somewhat lower costs for covering the uninsured under President Barack Obama's health care overhaul law, as well as slightly fewer people gaining coverage.

Assuming the Supreme Court does not overturn the law, it would reduce the number of uninsured by 30 million in 2016, or 2 million fewer people than estimated last year. Total costs from 2012-2021 are about $50 billion lower than estimated last year. That's due to a combination of factors, including overall health care costs rising more slowly than in the recent past.

The CBO report comes as Republicans controlling the House are preparing for this year's budget debate, which is sure to spill over into the presidential campaign as the two sides quarrel over Medicare, taxes and cuts to the Pentagon budget.

The budget plans of the leading GOP presidential candidates each call for new, significantly larger tax cuts that would add even more to projected deficits, according to independent analysts.

CORRECTION: An earlier version of this stated that last year, the CBO estimated the price tag of the Affordable Care Act be $1.131 billion over the next decade.

Comments

[olerealist]

06:20 PM on 05/10/2012

WHAT DOES AFC REALLY COST??

Like a lot of us, I have been confused by the contortions of pundits of both right and left on interpretations of CBO reports. But I continue to believe that the Agency is bi-partisan.

So I decided to read some of the actual summary of CBO for myself. I have now copied what I will believe is the definitive comment directly from CBO until someone, in plain English can persuade me differently. Here is the quote:

“Reversing the sign of the estimate released in February provides an approximate estimate of the impact over that period of enacting those provisions. Therefore, CBO and JCT effectively estimated in February that PPACA and the health-related provisions of the Reconciliation Act will pro-duce a net decrease in federal deficits of $210 billion over the 2012–2021 period as a result of changes in direct spending and revenues. The projected net reduction in deficits is the difference between $813 billion in projected additional REVENUES and $604 billion in projected additional OUTLAYS. "

[Roger Ramjet]

05:44 PM on 07/11/2012

Well, then read this summary from the CBO. Your thoughts?

http://www.weeklystandard.com/blogs/obamacare-now-estimated-cost-26-trillion-first-decade_648413.html

[Steve Matlick]

12:35 AM on 07/12/2012

As the chart notes, "Estimates of the gross outlays under the President's health care law in nominal dollars using CBO estimates of major coverage provisions, as well as Senate Budget Committee Republican projections based on CBO estimates of the remaining costs."

It's that last half of the statement that makes this suspect. Projections released by either side that are formulated by either side are always suspect. Projections released that have JUST a non-partisan view are more reliable.

[olerealist]

05:12 PM on 05/10/2012

George Will, opinionated distortion expert, strikes again.

This time (5/10/12) he goes after a tax contained within “Obama Care”. it’s a 2.3 % tax on gross income on the makers of medical devices. He states that this amounts to a 15% tax on the NET profits of this particular industry.

This number equates to the industry having a net profit of 85% as it relates to gross income.
In my professional career I have the occasion to become acquainted with many small private businesses I noted that most of these would be extremely pleased if they had a net annual profit of even 60% compared to the 85% of gross income enjoyed by Medtronic’s. They apparently are the largest of the companies in this industry. (see http://phx.corporate-ir.net/phoenix.zhtml?c=76126&p=irol-fundSnapshot

I would ask Mr. Wills, how could they possibly have the 85% net profits if they were terribly oppressed by this tax.

George goes on to say that this tax along with the U.S. corporation tax is driving companies like “Boston Scientific” to build a 150 million dollar plant in China. George, it is not the 2.5% tax which is driving the location of that plant, it is the skewed monetary policy of China along with it putrefied environment and sweat shop wage which is the driver.

During the past five years, Medtronics has experienced an 18% ANNUAL increase of each share of stock in the Company. Cry boo-hoo poor things.

[bornorange]

07:11 AM on 11/30/2012

Rather than spending time trying to debunk George Will, wouldn't your time be better served interpreting the negative effect of taxing products that the general population of old retired people will need?

"Medical devices range from simple tongue depressors and bedpans to complex programmable pacemakers with micro-chip technology and laser surgical devices."
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/Overview/ClassifyYourDevice/ucm051512.htm

You can think that this is just a coincidence but ask yourself, "Which group of people have the most wealth to grab? What is the best and most secretive way to grab it? to redistribute it?"

Taxes, my friend... re: Death tax of 55% etc.

[AJ2011]

06:58 PM on 03/25/2012

I have a solution. Fed revenue has been a flat $2.2 trillion the last 3 years. Assuming the constant, if we double everyone's taxes across the board, the Fed will have $4.4 trillion in revenue, deduct $ .7 trillion because taking that money will cause a loss of investment, business shrinkage and lost jobs,but the Fed still has $3.7 to spend. Problem solved!

The Fed wants to raise taxes on $200k+ income 3.2%. Forget the wealthy, apply 3.2% to total revenue of $2.2 trillion and you have just $70 billion, a pittance compared to the $1.3 trillion in overspending revenues each of the last 4 years.

[smpj]

02:38 PM on 03/22/2012

The CBO is forced to live with the fiscal assumptions that make up each law they score. When these laws are enacted, the initially projected are NEVER in line with the actual. The real costs are always more because the assumptions made are always dishonestly fudged in the direction of affordability.

This whole process was a scam and this thing will not be affordable. The framers of this law know the fiduciary reality but figure once it's up and running, backing out will be impossible.

[shankapotomus]

02:02 PM on 07/27/2012

The CBO has never gotten anything right.

Ronald Reagan.

[Shrank]

07:53 PM on 03/17/2012

Millions of conservatives who are rabidly opposed to the Affordable Care Act can't even identify what the law actually does. To them, "ObamaCare" has become the symbol of Big Government, and they equate repealing it to the defeat of Obama in 2012.

[ccdae5]

03:51 PM on 03/18/2012

You are correct it is the poster child for government gone wild overreach into the private sector. Less government equals better government.

[PirateJohn]

06:43 PM on 03/18/2012

Then why are the people supporting the removal of Obamacare the same people trying to pass a whole host of laws that prevent women from getting contraception or abortions? Face it, Republicans don't want smaller government. They only want smaller government for the things Democrats care about.

[Steve Matlick]

12:40 AM on 07/12/2012

Incorrect. SMART government equals better government, and that is not related to size in every case. In fact, smaller government in some cases HURTS people - ask those areas where police, firefighting and teachers have been laid off. They are public sector jobs (not necessarily a part of government in the case of teachers - police and firefighters are as they would fall under the legislative branch of government, but public jobs none the less).

[smpj]

03:29 PM on 03/22/2012

I'm conservative and I can tell you what the law does. It breaks the bank!

[frdm399]

04:25 PM on 03/17/2012

Affordable Healthcare Bill is going to cost more than originally thought? Shocking....LOL

http://www.usdebtclock.org/

[yoda987]

11:06 PM on 03/18/2012

Not according to this article:

http://www.huffingtonpost.com/2012/03/15/health-care-reform_n_1347327.html

The very one you are reading!

[frdm399]

10:31 PM on 03/22/2012

The HP and truth are not synonymous, you should look to other outlets for news so you know what's going on.

[shankapotomus]

02:03 PM on 07/27/2012

HP lol.

[tournews1]

11:57 AM on 03/19/2012

wow, what a mind boggling display of stupidity! Is it a reading problem? or a comprehension problem? How do you read that article and then make such a ridiculous comment?

[frdm399]

10:29 PM on 03/22/2012

Evidently you don't know what's going on, it must be the blinders you have on. Get out of your liberal bubble and try to learn something.

[Francois Bergeron]

03:18 PM on 03/17/2012

30 million more people covered by health care insurance. Oh my gawd, that's terrible. What a horrible thing this is. The republicans must band together and fight this with all they got...

[smpj]

02:45 PM on 03/22/2012

Well, when the money runs out some future October because of the Act wasn't crafted honestly with affordability in mind and millions still need health care in Novembe & December, that will be horrible.

[Independent66]

06:47 AM on 06/06/2012

They may be on Medicad or some form of it, but they need to find a doctor to treat them. The trends are not pretty. Dr are not leaving medical school doing their internships and setting up a practice to treat Medicaid patients. Adding 30m insured with no increase in Drs will not be pretty! What good is insurance if they can't find a Dr to treat them. I think we will be right back to where we are today, the ER for some hospital.
Drs are not flocking to take on these people, in fact Drs are not entering the this segment, but leaving it. What's HHS going to do? Mandates! Every Dr will need to treat some number of these newly insured patients. Do you really think this will happen? Not in this country! Drs are already planning what they will do! The trends are clear, the older they are the more resistant they will be to change. They stop accepting new patients. They limit their practice by only accepting a limited number of insurance policies, or none! My Dr no longer accepts any insurance policy. He wants me to pay with cash, check or CC, he hands me a receipt for his services and filing a claim becomes my problem. His overhead was cut in half. He sets his rates, his practice is controlled by him and he does not care what my insurance plan covers.

[wallawizard]

02:55 PM on 03/17/2012

I did some calculations on the Total Public Debt Outstanding based on presidential inaugurations using this gov website:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

When Bush came into office on Jan 20th 2001 the total public debt was $5,727,776,738,304. When Bush left office it was: $10,626,877,048,913

So in Bush's 8 year term he contributed to the total public debt approximately: $4,899,100,310,609

When Obama came into office the debt was:
$10,626,877,048,913

As of 3/16/2012 (9:00 PM Eastern time) the Total Public Debt Outstanding was approximately
$15,564,809,891,767

In Obama's 3 years 1 month and 27 days in office he added $4,937,932,842,854 to the public debt which is more than Bush added in his 8 years in office.

[Francois Bergeron]

03:20 PM on 03/17/2012

The difference is (and I can't believe I have to write this), Obama also created revenue.
It's called investment.
What Bush did was waste.
What Bush did was just about bankrupt the world.

[wallawizard]

10:00 PM on 03/17/2012

You can call it investment, stimulus or whatever you want he has still presided over more spending in his 3 years than the last guy did in 8 years.

When Obama finishes his second term and if we keep spending at this rate then the debt from Jan 2009 till inauguration day in 2017 will have added another $10+ trillion to the debt. This will probably be more than all the debt from his predecessors (~$10.6 trillion).

[Kevin A Barry]

05:43 PM on 10/21/2012

There's just one problem with your scheme, Francois, the Debt to GDP ratio, has increased from 69% (yes too high) in 2009 to 108% today. With and annual GDP of 1.3%, DOWN from 2009. So you can talk about "investment" all you want, but the bottom line is declining output, jobs and negative growth. Despite the magic Math you geniuses try to run by us, Obama has made it worse. And any bill that's passed in the middle of the night, by one party that takes over 1/6th of the economy, can NEVER be a GOOD thing. And I think you folks all give BUSH far to much power, bankrupt the world ? Really ? http://www.americanthinker.com/2012/02/when_obama_came_into_office.html

[smpj]

02:54 PM on 03/22/2012

Of course, you're absolutely right - but borrowing to supposedly invest year after year is what has gotten Greece and Southern Europe into the disasterous fix they're in. Too many here are Paul Krugmanites, and they firmly believe in mortgaging the future of the nation so they can live the manner they've become accustomed to.

[Francois Bergeron]

04:42 AM on 03/24/2012

Not true. Study a bit. Greece is in the mess it's in because the people there avoid tax payments as a way of life and the gvt lies about its books.

[LeslieNeilson]

01:09 AM on 03/17/2012

A woman faints at Obama affair ? He passes gas and hundreds run to grab a wilff////

[M Decci]

10:37 PM on 03/16/2012

I don't trust individuals and partisans of either side. Always think they are too biased or not too smart or too indoctrinated. But I do trust the collective wisdom of the American people.

The day I saw a republican win in the state of Massachusetts, with the main purpose of stopping the democrats health care reform, who ran explicitly as the '41', all this in the most liberal state, replacing the most liberal senator whose life was dedicated to a NHS, that day I knew that there was something terribly wrong with this law, and the American people were correct in their rejection. Until this day most people want it repeal than accept it.

[SweetHome2012]

05:08 PM on 03/16/2012

Funny when the CBO puts out numbers that work for the GOP it is OK, but if it does not they say lets get rid of it.

When you weigh the cost of the Health Care Plan against Congress deferring the cost of 2 Wars, 2 Tax Cuts, and a Drug Plan that only benefited the Drug companies, I am not surprised.

It is OK to pay for things that put money in the pockets of the wealthy, but when it comes to paying for something that could benefit all America's we have problems with that. Why?

In the mean time, each time an uninsured person go's into the emergency room and can not pay, that cost is passed on to all of us in the way of higher taxes and higher Health Care Cost. Just like the deferred cost of the 2 Wars, now 3 Tax Cuts, Drug Plan along with the Bail out for Banks, Stimulus Package and the interest that is mounting.

I say so what if it cost 2 Trillion Dollars to get set up. At least, all the American People will know where that money went and have something to show for it.

[eschichl]

04:10 PM on 03/16/2012

again here we go, they act like the 1.076 trillion is for this year alone and driving the debt. The GOP and the Democrats both have forgotten the law of diminishing returns. At some point the benefits of a tax cut/stimulus generate far less revenue no matter how bigger the break or costlier the program at some point your return on investment will go negative and neither party wants to address this.

[PhantomShadow]

03:27 PM on 03/16/2012

But Robert Reich says don't worry because other countries will keep loaning us money and loaning us money andf loaning us money.

[From my cold dead hands]

03:23 PM on 03/16/2012

Command and control--where has this worked, again?

Does anyone think that the actual price will be LOWER than the estimate?

[Daryl Pienta]

04:01 PM on 03/16/2012

Health care for all or America is a failure

[FloridaGuy50]

04:45 PM on 03/16/2012

It Is when's it's forced on you Libber!

[Nancy Q]

08:57 AM on 03/17/2012

And who is going to pay for that??? Americans will not be paying for ANY MORE 'PROGRAMS'!!! We are BROKE!!!

[RABSR]

10:26 AM on 03/16/2012

The article does its best to hide the truth......

“Conservative economist Thomas Sowell is calling for the abolishment of the Congressional Budget Office (CBO) after it revealed this week that Obamacare may cost American taxpayers nearly twice the $940 billion it originally estimated -- $1.7 trillion over the next decade.

“I think occasionally the CBO does something that’s useful,” Sowell told Newsmax.TV in an exclusive interview. “But by and large, I think it should be abolished.”

In September 2009, President Obama estimated healthcare reform under the Patient Protection and Affordable Care Act would cost an additional $900 billion over 10 years. The CBO initially projected the cost at $940 billion.

Adding insult to injury, the CBO’s latest projections also indicate that some 3 million Americans will lose their employer-based insurance coverage. This comes despite the repeatedly assurances of the president and others that they would be able to stay on their current employer-based policies, if they wished to do so.

“It’s one of a number of federal agencies that give the public a sense of assurance in things where there is no assurance,” said the award-winning economist, who recently released a revised edition of his book “Intellectuals and Society.”

Sowell has long favored free markets, and objects to the tendency to prescribe and control consumer behaviors. He contends that bureaucracies often try to pick winners and losers in markets they are ill-equipped to understand.

[Daryl Pienta]

03:56 PM on 03/16/2012

this world is done if the republican disease is not vaccinated

[chvemn]

04:06 PM on 03/16/2012

Time to take off the blinders, let go of the left-right paradigm, they use it as a tool to divide our nation while both parties have done nothing for "we the people" in a long time, only for their corporate donors(the true masters of the government).

[FloridaGuy50]

04:37 PM on 03/16/2012

Your blind Libber? It's you Liberal Idiots that are taking the country down a dangerous path of destruction you Liberals have ran up more debt than any Republican ever could! You had better learn the facts from your destructive party.