WhatFinger


Which is why they fail to recognize that the Republican replacement could reduce new debt by $1 trillion over the course of a decade.

Most people have no idea how much ObamaCare busts the long-term budget



Most people - OK, not Democrats or journalists - understand that ObamaCare represented a big-government takeover of health care. It didn't actually make it part of the government, but it manipulated care and insurance markets in such a way that it essentially put politicians in control of this entire segment of the economy. You get that. What you probably don't get, because it's not widely understood, is just how pernicious the design of ObamaCare was - or I should say is, because as of this moment it's still on the books and there's no guarantee as I sit here right now that it's going to be repealed. ObamaCare was designed to increase, over time, the number of people dependent on Medicaid and subsidized ObamaCare policies in order to get their health care. This, consequently, was designed to necessitate far greater tax increases than the ones imposed initially when ObamaCare passed.
Charles Blahous, a fellow at the Mercatus Center and the Hoover Institution and a former public trustee for the Social Security and Medicare programs, explained in Friday's Wall Street Journal just how perilous the fiscal stakes are if ObamaCare is allowed to survive - but also the potential fiscal rewards of repealing it as soon as possible. The whole thing is worth a read, but here's a crucial excerpt:
Three factors contribute significantly to widespread confusion about the ACA’s damaging fiscal effects. The first is that many of the provisions designed to finance its expansion of insurance coverage haven’t borne fruit. Various financing provisions have instead been repealed, suspended, postponed or weakened by regulation. More than half of the ACA’s projected deficit reduction over its first 10 years was to come from surplus operations of its long-term care program called Community Living Assistance Services and Supports, or Class, which was suspended in 2011 and repealed in 2013 because it was actuarially unsound. The ACA’s “Cadillac tax” was immediately postponed until 2018 in the 2010 reconciliation bill; later it was weakened and further postponed until 2020. The ACA’s health-insurance fees and medical-device taxes have been suspended. Expected revenues from the individual and employer mandate penalties were reduced, first by delaying their implementation and later via new exemptions. As these various financing mechanisms have been weakened or discarded, the ACA’s financial effect has become more unfavorable than even the most pessimistic critics predicted. The second confusing factor is the complex system of scorekeeping rules Congress imposes on the Congressional Budget Office, which evaluates the budgetary effects of legislation. Those rules require the CBO to compare the effects of legislation to a baseline that differs from actual law in various critical respects.

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Specifically, the CBO was required to compare its projections for the ACA to an assumption that lawmakers would otherwise enact legislation to increase allowable spending by the Medicare Hospital Insurance Trust Fund. The CBO projected that the ACA would reduce deficits only relative to this hypothetical Medicare spending increase; scorekeeping under the requirements of the existing Medicare law would instead have shown the ACA increasing deficits. The third significant reason for confusion has been misinterpretation of intermittent CBO reports over the past several years on the evolving cost estimates for the ACA’s coverage expansion. These have tended to come in below initial projections due to lower-than-expected enrollment in the ACA’s insurance marketplaces, and to a deceleration in national health-spending growth that began before the ACA was enacted, but for which the data were not widely available until afterward. These reports of seemingly good fiscal news have only reflected certain specific pieces of ACA finances. We have not received similar reassessments of the ACA’s various financing provisions that have fallen apart.
Blahous estimates that the real 10-year savings from repealing ObamaCare may be as much as $1 trillion rather than the CBO's guess of $337 billion, precisely because the CBO is not allowed to take into consideration likely long-term impacts on markets like the ones Blahous talks about here.

I know a lot of conservatives are unhappy with the proposed American Health Care Act - the current idea for what should replace ObamaCare - and I share some of their concerns. It could be a much better bill. It's a shame we have such a small majority in the Senate and we have to water down otherwise good legislation to keep moderates like Susan Collins and Lisa Murkowski on board. But I part company with them when they suggest the AHCA is such a disappointment that we'd be better off just keeping ObamaCare. No. We wouldn't. ObamaCare is laced with time bombs and landmines that will set off far greater fiscal disasters in coming years. We have to get rid of it, as soon as possible. If we can't pass the bill we'd prefer now, then as much as you don't want to hear this, we have to do the best we can and then come back later to improve it. Maybe the three-phase effort will really work. I'm pretty confident about Phase 2 because that's simply Tom Price using his authority as HHS Secretary to undo the regulations Kathleen Sebilius put in place. Phase 3 - passing even more conservative market reforms by somehow getting eight Democrats to vote for cloture because Mitch McConnell doesn't want to kill the filibuster - eh, we'll see about that. But understand: ObamaCare cannot remain in effect. If you didn't get this before, maybe Blahous's piece will help clarify things. There's a fiscal disaster looming and it has to be stopped. And believe me, this country has enough fiscal problems on its hands without letting this one gestate into the monster it's designed to become.


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Dan Calabrese -- Bio and Archives

Dan Calabrese’s column is distributed by HermanCain.com, which can be found at HermanCain

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