Sunday, March 18, 2012

Crooks and Liars

So I've been hearing a whole lot from Paul Krugman and Ezra Klein lately about a recent Congressional Budget Office report that was released. In the report, the CBO provides updated cost estimates for Obamacare. Pretty run of the mill stuff, right? Wrong:
“The longer the president’s health care law remains on the books, the greater the threat it poses to our nation’s health care and our fiscal wellbeing,” said Chairman Price.  “The CBO’s revised cost estimate indicates that this massive government intrusion into America’s health care system will be far more costly than was originally claimed.  The law’s true cost to American taxpayers is part of a series of promises President Obama and Democrats in Congress made that will be broken.  Both fiscally and for the sake of our health care system, Americans cannot afford the president’s health care law."
That was a statement from the Chairman of the House Republican Policy Committee, Tom Price. The falsehoods in his rhetoric aside, there are a number of things wrong with what you just read. He was saying that because the CBO revised the cost estimate to $1.76 trillion up from the initial $940 billion estimate, the true cost of the law was obscured by Democrats and the books had been cooked. What Tom Price is ignoring is the fact that the first cost estimate was for the time period between 2010 and 2019, while this latest estimate spans from 2012 to 2021. That means that two more years in which Obamacare is operating are included in the latest cost estimate. Of course the cost is going to be higher, it costs more money to insure more people for a longer period of time!

But looking at the costs alone simply doesn't give you the full picture. With those two additional years of operation come two additional years of increased revenues from the law's provisions. So, really, what you want to look at is not the gross total cost of the law, but what the surplus/deficit change is compared to previous estimates. So what does the report have to say about this? Well, on the first page of it, the report says
"CBO and JCT now estimate that the insurance coverage provisions of the ACA will have a net cost of just under $1.1 trillion over the 2012–2021 period—about $50 billion less than the agencies’ March 2011 estimate for that 10-year period."
The cost of Obamacare is actually less than was initially thought. So, no, the law's true cost was not a broken promise, and is in fact more affordable to Americans than ever. Maybe if Tom Price had read the report a little more carefully, he would have said something different. Funny how he seemed to miss that paragraph on the first page when he was reading over the report, isn't it?