"Now, people on the right like to argue that the CBO was wrong. But that’s not the argument Ferguson is making — he is deliberately misleading readers, conveying the impression that the CBO had actually rejected Obama’s claim that health reform is deficit-neutral, when in fact the opposite is true."
In his article, Krugman goes on to challenge the claim that
ObamaCare runs a 1.2 trillion dollar deficit, when, according to
Krugmen, the health reform bill reduces the deficit by 20 billion per
year. In making his argument, it is Krugman who is disingenuous,
either failing to read the full CBO report or ignoring parts of that
document. For this post, I have taken time to format specific
sections of the CBO's review of ObamaCare.
1. “The projected net reduction in deficits is the difference between $813 billion in projected additional revenues and $604 billion in projected additional outlays,” according to page 3 of the report. With these two numbers, the Government claims a 200 plus billion dollar reduction in the national debt over 10 years.
2. The CBO report specifies that ObamaCare fully
subsidizes all families and individuals with incomes less than 138% of the
current poverty mark. What the report fails to do is to give the student
the total cost estimate of this requirement. We do it here.
It is estimated that 20% of the population earns less than
138% of the poverty level. If 62 million Americans qualify (the current
estimate) for this $7,000 subsidy (by 2021 - cf. Table 3, p. 19 of the
CBP report), the gross cost to Obama care will soon be 4.34 trillion over
ten years. Revenues within this report, are never higher than 800
billion.
________________________________
Text taken directly from the CBO PDF.
Effects on Health Insurance Premiums
Under PPACA
and the Reconciliation Act, premiums for health insurance in the individual
market will be somewhat higher than they would otherwise be, CBO and JCT
estimate, mostly because the average insurance policy in that market will cover
a larger share of enrollees’ costs for health care and provide a slightly wider
range of benefits. The effects of those differences will be offset in part by
other factors that will tend to reduce premiums in the individual market; for
example, purchasers in that market will tend to be healthier than they would
have been under prior law, leading to lower average costs for their health
care. Although premiums in the individual market will be higher on average,
many people will end up paying less for health insurance—because the majority
of enrollees purchasing coverage in that market will receive subsidies via the
insurance exchanges.
[Editor's notes: the claim is made -above- that premium costs WILL INCREASE, mitigated only by the increased health of the individual covered by ObamaCare and subsidies from the Government -- in other words, ObamaCare does not reduce the individual health care costs]
Premiums for
employment-based coverage obtained through large employers will be slightly
lower than they would otherwise be; premiums for employment-based coverage
obtained through small employers may be slightly higher or slightly lower. (all
from p 8)
Effects on Labor Markets.
. . . . . Some
provisions of the legislation will discourage people from working more hours or
entering the workforce . . . . [other provisions would encourage an increase in
hours worked]
[Editor's notes: there is no work or income requirement]
Uncertainty Surrounding the Estimates
The
budgetary impact of PPACA and the Reconciliation Act could be quite different
if key provisions of that original legislation are subsequently changed or not
fully implemented. . . . . . In fact,
CBO’s cost estimate for the legislation noted that it will put into effect a
number of policies that might be difficult to sustain over a long period of
time. Also,
the legislation includes a provision that makes it likely that exchange subsidies
will grow at a slower rate after 2018, so the shares of income that enrollees have
to pay will increase more rapidly at that point, and the shares of the premiums
that the subsidies cover will decline. Such possibilities could lead to
pressure on lawmakers to adjust those policies. (p.9)
[Again, the CBO has this to say as to projected costs: In fact, CBO’s cost estimate for the legislation noted that it will put into effect a number of policies that might be difficult to sustain over a long period of time.]
Overview of the Budgetary Effects in
the First Decade
Moreover,
for provisions that affect an existing flow of spending or revenues—such as
Medicare outlays or income tax receipts—the effects will not be identifiable.
Therefore, comparing all elements of the laws’ ultimate impact with the amounts
estimated at the time of their enactment will not be possible. (p.10)
The
expansion of Medicaid coverage to include most
nonelderly people with income below 138 percent of the federal poverty
level . . . . . p16
[no one knows what this total will be]
Changes in Insurance Coverage and Federal
Budgetary Flows
According to
CBO and JCT’s most recent estimates, PPACA and the Reconciliation Act will
increase the number of nonelderly Americans with health insurance by about 32
million in 2016 . . . . . . CBO and JCT
estimate that PPACA and the provisions of the Reconciliation Act affecting
health insurance coverage will result in a net increase in federal deficits of
$1,131 billion over fiscal years 2012 through 2021. (p.17)
Those costs
will be partly offset by higher revenues or lower costs, totaling about $314
billion over the 10-year budget window, from four sources:
an increase
in net revenues from the excise tax on high-premium insurance plans, totaling
$87 billion; penalty
payments by uninsured individuals, increasing revenues by $34 billion; penalty
payments by employers, increasing revenues by $81 billion; and other budgetary
effects, mostly on tax revenues, associated with shifts in the mix of taxable
and nontaxable compensation resulting from changes in employment-based health
insurance coverage . . . . . p.18
Employers’
decisions to hire workers will also be affected in some cases by the health care
legislation. Employers with 50 or more employees will be required to pay a
penalty if they do not offer insurance or if the insurance they offer does not
meet certain criteria and at least one of their workers receives a subsidy from
an exchange. Those penalties, whose amounts are
based on the number of full-time workers in the firm, will, over time,
generally be passed on to workers through reductions in wages or other forms of
compensation. However, firms generally can not reduce workers’ wages below the
minimum wage, which will probably cause some employers to respond by hiring
fewer low-wage workers. Alternatively, because firms are penalized only if their
full-time employees receive subsidies from exchanges, some firms may instead
hire more part-time or seasonal employees. P 32
No comments:
Post a Comment