No, ObamaCare Won’t Reduce the Deficit

A new paper by one of Medicare’s Trustees reveals the disastrous budgetary consequences of the health law.

(Page 2 of 2)

It’s the fault of the administration and its allies in Congress, who've shamelessly abused the scoring process in an effort to cover the health law's budgetary shortcomings with a fig leaf of fiscal responsibility. In congressional testimony last year, Sebelius was asked whether the Medicare savings money would be used to fund ObamaCare's healths subsidies or extend the life of Medicare. Her response? "Both." 

Indeed, as Blahous notes, federal scorekeepers have “taken pains to warn lawmakers that the provisions of the ACA intended to produce budgetary savings ultimately may be less than fully effective.”

But ObamaCare's backers in Congress and the White House ignored those warnings, preferring to have it both ways—insisting over and over that the law will both reduce the deficit and keep Medicare's finances afloat. Ultimately, the accounting will catch up to them. 

Peter Suderman is a senior editor at Reason magazine.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Old Mexican||

    But make no mistake. This is a form of double counting, as the same Congressional Budget Office that provided the favorable scores agreed.

    "It's not accounting fraud when we do it!"

  • lightning||

    My reaction to the title of this article:

    No duh! My 5 year old knows the math doesn't work.

  • Sevo||

    "If the savings mechanisms don't pay off, the damage will be even worse."

    'Nuff said.

  • R C Dean||

    I thinkn your autocorrect inserted "If" when you meant "When".

  • NoVAHockey||

  • Old Mexican||

    The first thing to understand here is that this is not a study by a government agency. It’s a paper by Charles Blahous. Who is Charles Blahous? He’s a Republican policy guy.

    "No need thus to go over the numbers! Nothing to see here!"

  • Registration At Last!||

    Maybe if Old Mexican continued to read the posting by Chait, he would have noticed this passage, where Chait 'goes over the numbers:'

    "...the roughly $500 billion in Medicare savings that Obama used to help cover the uninsured is money that Blahous assumes the government wouldn’t have spent anyway. Without the health-care law, in other words, we would have had Medicare cuts but no new spending on the uninsured. Now we have the Medicare cuts and new spending on the uninsured. Therefore, the new spending in the law counts toward increasing the deficit, but the spending cuts don’t count toward reducing it.

    That is a completely bizarre assumption. It’s not an assumption that any scoring agency ever applies in other situations."

    ... and here's where Old Mexican, confronted with the red-handed evidence of his own off-the-cuff-stupidity, starts going ad hominem, dodging the issue, and moving the goalposts in 3... 2... 1...

  • wareagle||

    so de facto Dem policy guy Chait is to believed over Repub policy guy Blahous why? Chait assumes there would be "Medicare cuts but no new spending on the uninsured". By what political calculus does Chait assume Medicare cuts would have occurred? And to call $500-billion in Medicare payments NOT made a type of "savings" requires a totally new dictionary.

  • KPres||

    Savings - reduction in the rate of growth by my team.

    Draconian cuts - reductions in the rate of growth by their team.

  • mr simple||

    The first thing to understand here is that this is not a study by a government agency.

    And only the government can be trusted.

  • mr simple||

    It was published by the Mercatus Center, a Koch-funded organization that produces some quality work as well as a fair amount of schlock that does not meet the standards of your typical university economics paper.

    Ad hominem attacks and hatchet job comlumns, however, are the surest sign of quality journalism

  • wareagle||

    and what exactly are the standards of the "typical university economics paper" that makes them so credible? Probably because no problem was ever found in a paper produced by academia.

  • wareagle||

    why does anyone pretend that Obamacare will reduce the deficit? It has nothing to do with either the deficit OR reducing health care costs. The IRS fines for non-compliance are purposely low so that businesses will voluntarily pay the fine instead of buying insurance for their staffs, thereby creating a single payer system by default.

  • Tman||

    I wonder if we bought everyone a Pony -a nice pretty Pony- would THAT reduce the deficit?

  • mr simple||

    We'll never know until we try. I have a right to a pony!

  • Gadianton||

    Do we all have a right to a pony? If so, I need a Pony Subsidy.

  • albo||

    The whole idea is a whopper from the start: That the federal government could create a massive entitlement that would save, not cost, money? It would be the first one ever.

    I guess people and the media went along because if anyone could do it, the Annointed One could.

    But it's willful idiocy. Like being convinced that the Adam Sandler movie you're gonna see will be the comedic next coming of Animal House.

  • Avater||

    Sadly, this valid argument will do little to sway supporters of Obamacare. To them, deficits and debt are irrelevancies.

  • Concerned Citizen||

    Unless Team Red is in the White House.

  • TheZeitgeist||

    From personal greed perspective, there is going to be big business - and investment opportunity - in offshore medical facilities for people who can pay their own insurance.

    Insurance Co. is going to realize paying $400 for MRI in Costa Rica + cost of ticket, hotel, meals for two days = $2000 for grand total of $2400 vs. shelling out ~$5,000 for MRI in the States.

    Something's gotta give there and Obamacare - if implemented - will break that camel's back.

  • CE||

    Why not an offshore ocean liner with a hospital, in international waters?

  • TheZeitgeist||

    That is not a bad idea.

  • CE||

    Next by Peter Suderman: why a shopping spree won't pay off your credit cards.

  • ||

    Whoa now. A federal entitlement program whose budget projections are a complete load of shit? Well I'll be damned...

  • Harvard||

    Tony? Bueller? S'plain all this in that funky no nonsense way of yours.


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