Political Animal

Blog

March 15, 2012 5:50 PM Single-Entry Bookkeeping

By Ed Kilgore

Scanning the morning headlines today, I saw, as probably a lot of you did, the shrieking claims that CBO had “revealed” that “ObamaCare” was going to cost vastly more than originally advertised, and would also force vast numbers of workers out of their employer-sponsored insurance coverage.

I figured someone smart and patient like TNR’s Jonathan Cohn would come along and explain it, and sure enough, he did:

To figure out the cost of health care reform, CBO looks at each of the law’s component parts and, for accounting purposes, groups them into different categories. It calls one category “gross cost of coverage expansions” - that’s the amount of money the federal government will spend to help people get insurance, mostly by offering Medicaid to more people or giving people subsidies they can use to help offset the cost of private insurance. Last year, CBO estimated that the gross cost of coverage expansion from 2012 through 2021 would be $1.445 trillion. Now CBO thinks the gross cost will be $1.496 trillion. The number shifted, in part, because the CBO has changed its projections for economic growth. (MSNBC’s Tom Curry has a nice explanation of this.) But, in the context of such a large a budget projection, that’s barely any difference at all.
In the this latest estimate, CBO extends its projection out one more year, to capture the expenses from 2012 to 2022, in order to capture a full decade. In 2022, CBO says, the gross cost of coverage expansion will be $265 billion. Add that to the $1.496 and you get (with rounding) the $1.76 trillion - the one in the press releases and the Fox story.
But there is nothing new or surprising about this. It’s only slightly more money than the previous year’s outlays. The ten-year number seems to jump only because the time frame for the estimate has moved, dropping one year, 2011, and adding another, 2022. Obamacare has virtually no outlays in 2011, because the Medicaid expansion and subsidies don’t start up until 2014, which means the shifting time frame drops a year of no implementation and adds one of full implementation.

More importantly, of course, the Republican attacks don’t acknowledge that the same CBO reports show that “ObamaCare” will not only pay for itself in offsetting federal savings, but will reduce the deficit even more than it suggested in earlier estimates.

In a similar exercise in single-entry bookkeeping, conservatives are screaming that the CBO reports show many millions of Americans losing their health insurance. That’s because they do not acknowledge that most of these people are transitioning from one kind of insurance to another because it is better and/or less expensive. There is a downward revision in the net insurance figures of a much smaller figure, but as Cohn and others have noted, CBO gave no reason for it and thus it is kind of impossible to analyze or evaluate.

None of this discussion, of course, will do much about the earlier headlines, or the reinforced conviction (or pretence) of many conservatives that health reform cost vastly more than advertised, will greatly increase budget deficits, and will toss large numbers of Americans into uninsured status—all of which is, to use a technical term, hogwash.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

Comments

  • Ron Byers on March 15, 2012 6:17 PM:

    This story should not have made it to first base. It was an easy ground out. The problem is our esteemed administration allowed the story to gain traction before shooting it down. This is a real problem. Republicans will misconstrue, reporters won't fact check. Elected Democrats have a duty to respond with facts as fast as possible.

  • Boronx on March 15, 2012 7:28 PM:

    This story is a good test for finding untrustworthy news outlets. The Republican mouth pieces for some reason linked to the CBO report (you should read it, Ed, it's short), which completely destroys the story.

    It's pretty clear that they just picked the largest number that appears in the report and made up a bullshit story and ran with it.

  • N. Bates on March 16, 2012 9:33 AM:

    Pardon me since I'm sneaking this in between teaching classes, but: do these critics even consider to distinguish net cost (how more *more or less* yadda costs than what we would do otherwise) from "cost" per se (how much we simply spend, period, on yadda)? It makes a big difference, literally, since without ACA there is "what we would have spent on ..." without the ACA. Well?

  • Anonymous on March 16, 2012 2:53 PM:

    9/11 killed over 3000 civillian.
    Iraq War costed about 4000 soldiers' lives. Afghanistan, about 3000.

    an estimated 137,000 people died over 7 years because they were uninsured.

    5% of clinically ill patients account for 50% of all the medical cost.
    we could have prevented their conditions prematurely by having access to medical care before turing 65.

    so why anyone against moderate tax raise on 200,000 earners and those who don't buy insurance plans and initial cost to businesses and government in order to to have universal health care?