From Obamacarefacts.com
Even before Obama signed the ACA into law, alleged non-partisan analysts were casting doubt over these numbers. One of their major concerns came from counting twice the savings from Medicare. The CBO pointed this out to Congress in Jan of 2010.ObamaCareFacts.com wrote:ObamaCare's cost is estimated at up to net cost of $1.36 trillion dollars by 2023. Although Obamacare's net costs are in the trillions, the law actually reduces the growth in health care spending by tens of billions each year, reduces health care costs for many Americans, helps to insure tens of millions and is estimated to result in an overall net decrease of the deficit.
Obamacare is projected to cut the national deficit by over $200 billion during it's first 10 years and over $1 trillion over the next two decades. This helps offset the up-front cost of ObamaCare.
After each body passed a version of ACA and during the resolution process the CBO again issued a warning about costs and savings. A note to Nancy Pelosi says:CBO letter from Jan 2010 wrote:The reductions in projected Part A outlays and increases in projected HI revenues resulting from PPACA would significantly raise balances in the HI trust fund and might suggest that significant additional resources—$358 billion plus additional interest to be credited to the trust fund over time—had been set aside to pay for future Medicare benefits. However, only the additional savings by the government as a whole truly increase the government’s ability to pay for future Medicare benefits or other programs, and those would be a much smaller ($132 billion plus interest savings to be achieved over time). Unified budget accounting shows that the majority of the HI trust fund savings under PPACA would be used to pay for other spending and therefore would not enhance the ability of the government to pay for future Medicare benefits.
Unfortunately for all Americans the above warnings were proven sound when key provision started to be changed or completely discarded. The first was the complete ejection of the CLASS component. In 2011 HHS recommended the CLASS program not move forward due to it being actuarially sound. This program was project to save $70 Billion over 10 years. So that number now is removed from the ACA's savings.CBO letter to Nancy Pelosi during reconciliation of ACA in Congress wrote: Key Considerations. Those longer-term calculations reflect an assumption
that the provisions of the reconciliation proposal and H.R. 3590 are enacted
and remain unchanged throughout the next two decades, which is often not
the case for major legislation. For example, the sustainable growth rate
mechanism governing Medicare’s payments to physicians has frequently
been modified (either through legislation or administrative action) to avoid
reductions in those payments, and legislation to do so again is currently
under consideration by the Congress.
The reconciliation proposal and H.R. 3590 would maintain and put into
effect a number of policies that might be difficult to sustain over a long
period of time. Under current law, payment rates for physicians’ services in
Medicare would be reduced by about 21 percent in 2010 and then decline
further in subsequent years; the proposal makes no changes to those
provisions. At the same time, the legislation includes a number of
provisions that would constrain payment rates for other providers of
Medicare services. In particular, increases in payment rates for many
providers would be held below the rate of inflation (in expectation of
ongoing productivity improvements in the delivery of health care). The
projected longer-term savings for the legislation also reflect an assumption
that the Independent Payment Advisory Board established by H.R. 3590
would be fairly effective in reducing costs beyond the reductions that
would be achieved by other aspects of the legislation.
Under the legislation, CBO expects that Medicare spending would increase
significantly more slowly during the next two decades than it has increased
during the past two decades (per beneficiary, after adjusting for inflation). It
is unclear whether such a reduction in the growth rate of spending could be
achieved, and if so, whether it would be accomplished through greater
efficiencies in the delivery of health care or through reductions in access to
care or the quality of care. The long-term budgetary impact could be quite
different if key provisions of the legislation were ultimately changed or not
fully implemented.
Then in 2012 the Supreme Court made changes to ACA. One of the big changes is that it made Medicare expansion by the states optional. As such 26 states declined to increase Medicaid coverage and those costs reverted to the Feds to absorb. Many of the 26 states looked at this expansion as an unfunded mandate from Washington.
Then President Obama decided to delay the provision of ACA that requires employers to provide affordable health care or face a penalty. This provision of ACA was estimated to produce $140 Billion over the first 10 years in savings and income. I can't find a link to what the single year delay will cost though. Plus there is no guarantee that this provision won't be delayed again.
Then labor got involved and is requesting changes to the ACA. The AFL-CIO a huge Obama supporter is pushing for expanded federal subsides to plans the union oversees that cover multiple employers. They also oppose the $63 fee per covered member. Further many employers and employees led by unions and their members oppose the "Cadillac charge" on health plans deemed too good. This would tax anyone with such a plan an additional 3.8% of income. Unlikely organized labor allows either of these to be implemented
Another measure that is estimated to raise $29 Billion over the first 10 years is a tax on manufacture of medical devices. The Democratic controlled Senate though just recently voted in non binding fashion to eliminate this tax by a vote of 79-20. But if there is wide support even in the Senate how long can we expect this tax to last? That is more revenue disappearing from the ACA.
Thoughts? Will this ever achieve cost savings? Will it increase our spending? Will one of the Democrats and President Obama's biggest supporters end up fighting against ACA? The AFL-CIO already estimates 35% of its membership votes Republican, will this shift more?
