by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Daniel Kessler warns us in the Wall Street Journal that the federal Department of Health and Human Services is preparing to spend millions of dollars to promote the 2010 federal health care reform law. Before you’re inundated with spin about the merits of Obamacare, Kessler reminds us about some sobering facts.
In the face of this publicity blitz, it is worth remembering that the law was originally sold largely on four grounds—all of which have become increasingly implausible.
• Lower health-care costs. One key talking point for ObamaCare was that it would reduce the cost of insurance, especially for non-group insurance. The president, citing the work of several health-policy experts, claimed that improved care coordination, investments in information technology, and more efficient marketing through exchanges would save the typical family $2,500 per year.
That was then. Now, even advocates for the law acknowledge that premiums are going up. In analyses conducted for the states of Wisconsin, Minnesota and Colorado, Jonathan Gruber of MIT forecasts that premiums in the non-group market will rise by 19% to 30% due to the law. Other estimates are even higher. The actuarial firm Milliman predicts that non-group premiums in Ohio will rise by 55%-85%. Maine, Oregon and Nevada have sponsored their own studies, all of which reach essentially the same conclusion. …
… • Smaller deficits. Increases in the estimated impact of the law on private insurance premiums, along with increases in the estimated cost of health care more generally, have led the Congressional Budget Office to increase its estimate of the budget cost of the law’s coverage expansion. In 2010, CBO estimated the cost per year of expanding coverage at $154 billion; by 2012, the estimated cost grew to $186 billion. Yet CBO still scores the law as reducing the deficit.
How can this be? The positive budget score turns on the fact that the estimated revenues to pay for the law have risen along with its costs. The single largest source of these revenues? Money taken from Medicare in the form of lower Medicare payment rates, mostly in the law’s out-years. Since the law’s passage, however, Congress and the president have undone various scheduled Medicare cuts—including some prescribed by the law itself.
Follow the link above to read Kessler’s take on two other broken promises tied to Obamacare.