Obamacare's Uninsured Up 5 Million, Medicaid Dependents Up 16 Million Since 2010 Estimate

Commentary by John R. Graham

Source: Forbes

Last week’s Congressional Budget Office’s Updated Budget Projections: 2016 to 2026 significantly reduced estimates of Obamacare’s benefits, relative to CBO’s estimates published in 2010, when the law was signed:

  • In 2010, CBO estimated Obamacare would leave 22 million uninsured in 2016 through 2019. This month, CBO estimates Obamacare will leave 27 million uninsured through 2019 – an increase of almost one quarter.
  • In 2010, CBO estimated Obamacare would leave 162 million with employer-based health benefits in 2016 through 2019. This month, CBO estimates Obamacare will leave only 155 million with employer-based plans. The number will decrease to 152 million in 2019.
  • In 2010, CBO estimated Obamacare exchanges would enroll 21 million people in 2016, increasing to 24 million in 2019. This month, CBO estimates Obamacare’s exchanges will enroll only 13 million people this year, and 20 million in 2019.
  • In 2010, CBO estimated Obamacare would result in 52 million Americans remaining or falling into dependency on Medicaid or the Children’s Health Insurance Program, the welfare programs jointly funded by state and federal governments that subsidizes low-income households’ health care, in 2016. CBO estimated that figure would drop slightly to 51 million in 2019. This month, CBO estimates 68 million will be dependent on the program this year through 2019 – an increase of almost one third in the welfare caseload.

Many observers have recognized that Obamacare is a welfare program camouflaged as a reformed health insurance marketplace. CBO’s new estimate that Obamacare will actually leave five million more uninsured than initially estimated suggests even that camouflage is beginning to fail.

If there is any positive to this news, it is that Obamacare’s exchange spending will be significantly less than initially estimated. CBO has walked back its January 2016 estimate, which figured Obamacare’s exchange tax credits and related spending per enrollee would balloon along with declining enrollment, negating the budget benefit. CBO now believes per enrollee costs will be low.

Because the estimated number of people enrolling in Obamacare’s broken exchanges has been cut almost in half, the estimate of taxpayer dollars handed out to insurers in the exchanges has also been reduced. The initial estimate for the 2016-2019 period was $394 billion, which has been dialed back to $243 billion in the new estimate. That $151 billion reduction is nothing to sneeze at, especially as the Republican-majority Congress has rolled back Obamacare tax revenues without deliberately cutting Obamacare spending.

Another benefit is the significant reduction in reinsurance and risk corridor payments paid to insurers which lose money in Obamacare’s exchanges. The statute demands these payments be budget neutral, funded by payments from insurers which make more money than expected. The CBO’s 2010 estimate figured $18 billion would wash though these programs in 2016, and $21 billion in 2019. Those revenues–and therefore payments–are now estimated to be no more than $11 billion in each of the four years. The Obama administration and its health insurer allies had tried to wriggle around the budget neutrality requirement, putting taxpayers on the hook for the payments as initially estimated. In December 2014, Republicans in Congress passed a bill putting a stop to that effort, a decision that now looks prescient.

Of course, those 16 million more welfare dependents will be a burden on taxpayers. Because of differences in the way CBO reports Obamacare’s effect on Medicaid and the Children’s Health Insurance Program in its 2010 and March 2016 estimates, it is not easy to calculate the change in Medicaid and CHIP spending due to Obamacare. (In 2010, CBO’s total estimate of 52 million dependents in 2016 comprised a baseline of 35 million plus 17 million more due to Obamacare’s expansion. This month, CBO’s estimate of 68 million comprised a baseline of 57 million dependents if Obamacare had not passed, plus 11 million due to Obamacare’s expansion.)

Nevertheless, this month’s CBO estimate alone indicates $64 billion, almost one quarter of the $279 billion the federal government will spend on Medicaid and SCHIP this year, is due to Obamacare’s Medicaid expansion.

Obamacare continues to fail. An alternative health reform is needed.

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