NCPA - National Center for Policy Analysis

CBO: It's Not Possible to Analyze Obamacare Costs

June 24, 2014

Americans may never get an accurate projection of Obamacare's impact on the deficit, reports the Washington Examiner.

Before it become law, the Congressional Budget Office (CBO) projected that Obamacare would cost $938 billion and reduce the deficit by $143 billion over the first decade, from 2010 through 2019. At that time, the figures were already questionable:

  • Because the major spending provisions of the Affordable Care Act (the Medicaid expansion and the exchanges subsidies) did not become effective until 2014, the CBO's estimate really included just six years of real spending within that 10-year period.
  • The estimate of $143 billion in deficit reduction was a function of the law's tax increases and Medicare spending cuts.

Since that original estimate, the CBO's financial projections have continued to change:

  • In July 2012, the CBO reduced its estimate of the law's impact on the budget deficit to $109 billion.
  • In April 2014, the CBO said that the cost of the ACA from 2015 to 2024 would be more than $1.8 trillion -- twice as much as its first ten-year projection.

In that same April report, the CBO include a significant footnote: "CBO and (the Joint Committee on Taxation) can no longer determine exactly how the provisions of the (Affordable Care Act) that are not related to the expansion of health insurance coverage have affected their projections of direct spending and revenues... Isolating the incremental effects of those provisions on previously existing programs and revenues four years after enactment of the ACA is not possible."

The Washington Examiner notes that Obamacare's deficit reduction claims were already questionable, as it is not clear that the law's proposed Medicare cuts will remain in place. Additionally, unions, insurers, drug makers and medical device companies each would like relief from the law's new tax provisions. 

Source: Editorial, "CBO Gives Up on Projecting Long-Term Costs of Obamacare," Washington Examiner, June 8, 2014.


Browse more articles on Health Issues