This much we know: There is no way of figuring out what (or by how much) the Affordable Care Act is going to do to the federal budget compared to the estimates used to push the program through Congress. Back in 2009, it was really important to President Obama that people understand he "not sign a plan that adds one dime to our deficits—either now or in the future. Period." He sold the plan as costing about $938 billion in its first decade of operation.
Nowadays, the Congressional Budget Office (CBO), the agency originally charged with tallying up Obamacare's costs and revenues, says it's no longer able to estimate the law's effects on the deficit. There have been too many delays, postponements, modifications, you name it, to the original bill. "Isolating the incremental effects of those provisions on previously existing programs and revenues four years after enactment of the Affordable Care Act is not possible," the CBO concludes.
Yet if past experience with massive government-run health care programs is any indicator, the odds are high that Obamacare will end up costing way more than it was supposed to. Here are three examples to think about as the health care reform law gears up for its second year of sign-ups (for more information, go here).
1. Massachusetts Commonwealth Care. This is the plan supported by Gov. Mitt Romney that provided the very model for Obamacare. It guaranteed universal coverage and subsidized insurance premiums for low-income residents. Initial cost estimates came in at $472 million while actual costs were closer to $628 million for an error ratio of 1.2:1.
2. Medicare. In 1967, Congress estimated that the nation's single-payer system for the elderly, Medicare, would cost $12 billion in 1990. The actual price tag was $110 billion, for an error ratio on 9.17:1.
3. Medicaid DSH program. Medicaid pays for health insurance for the poor (its expansion represents the main way Obamacare in enrolling new beneficiaries). The "disproportionate share hospital program" (DSH) gives money to facilities that serve a large number of poor patients. In 1987, Congress figured DSH payments would be less than $1 billion in 1991. Instead, they totaled $17 billion, creating an error ratio of 17:1.