Federal programs rarely come in under budget. Consider Medicare, which will soon celebrate its 50th anniversary. In 1967, lawmakers projected annual spending in the program would reach $12 billion in 1990. The actual tab that year? A cool $110 billion.
A new report from the Congressional Budget Office says that Obamacare will buck the trend.
The CBO has lowered its projections for the cost of the president’s healthcare law by $142 billion over the coming decade, from $1.35 trillion to $1.2 trillion.
Obamacare may cost the feds less than anticipated, but it’s extracting far more from consumers’ wallets than they bargained for. Consequently, Obamacare has put insurance out of reach for many Americans — breaking its promise to make health care more affordable.
The decline in Obamacare’s cost is not as impressive as it seems. The total price tag is still some $250 billion higher than the president promised when he signed Obamacare in March 2010.
The CBO’s projection came down primarily because the agency decided that the law would be less effective at expanding access to insurance coverage than previously thought. An earlier estimate held that Obamacare would increase the number of insured Americans by 27 million in 2023. The new estimate is 25 million.
In other words, the law hasn’t become cheaper. The CBO has just decided that it will cover fewer people. That’s not evidence that Obamacare is saving taxpayers money.
Meanwhile, overall healthcare spending has increased drastically under Obamacare.
According to the Altarum Institute, a non-profit health research organization, health spending jumped 5 percent last year. That’s not what the president promised.
The Centers for Medicare and Medicaid Services expect spending to surge 6 percent each year over the next decade. The agency cites the Affordable Care Act as a prime reason for these increases.
Health spending will soon eat up a larger portion of the U.S. economy. From 2009 to 2013 — the year before Obamacare’s most significant reforms took effect — such spending made up just over 17 percent of U.S. GDP. Altarum says that health spending is on track to consume 25 percent of the nation’s economy.
Obamacare has also pushed up premiums. They’re set to rise 8.5 percent a year between 2016 and 2018, according to the Congressional Budget Office.
These increases are hitting low-income Americans particularly hard. And if they don’t buy insurance, they face a tax penalty of $325 or 2 percent of income.
Even if they follow the law and buy insurance, their coverage may not do them any good, as deductibles have skyrocketed. The average deductible in a “bronze” plan sold through the exchanges is north of $5,300.
Many families don’t have the savings to cover those kinds of costs. About one-third of all non-poor households, and two-thirds of those just above the poverty line, don’t have the money to cover a mid-range deductible.
The federal government’s tab for Obamacare may have dipped slightly. But ordinary Americans are paying for those supposed savings via higher deductibles, premiums, and even new taxes.
This is hardly the affordable care the president promised.