Health Care

Health Care Provisions of Democratic Spending Bill Would Add More than $500 Billion to the Deficit

New analysis from the nonpartisan Congressional Budget Office shows massive deficit increase as a result of spending bill’s health care provisions.

|

The massive Democratic spending package now working its way through Congress is not, strictly speaking, a health care bill. But it's not not a health care bill, either. Many of its biggest, most expensive provisions are expansions of government-run or federally subsidized health care programs. Those provisions represent the largest expansion of federal health care spending since Obamacare.  

And now we have a much better sense of just how big and costly some of those expansions would be. Just two provisions alone would cost about $533 billion, according to a new analysis by the nonpartisan Congressional Budget Office (CBO). 

The first provision is a further expansion of Obamacare's subsidies for private insurance, at a cost of $209.5 billion. A temporary, two-year version of this expansion, which boosts subsidies for people earning less than 400 percent of the poverty line and opens up subsidies to people making more than that, already appeared in the $2 trillion American Rescue Plan that Democrats passed earlier this year; the reconciliation bill would extend the larger subsidies. 

Not only would this be expensive, as health policy consultant and former Trump administration economic adviser Brian Blase points out, CBO's analysis suggests that the majority of the beneficiaries would be people who already have health coverage: About 2 million of the 3.4 million people projected to move onto coverage through Obamacare's health exchanges already have some sort of insurance. Moreover, about two-thirds of the new enrollees would be relatively well off, with household incomes above 400 percent of the poverty line, which currently equates to about $106,000 for a family of four. 

The second major provision is a $323.1 billion expansion of Medicaid to cover people in the so-called Medicaid gap, which refers to people who make too much to qualify for traditional Medicaid (and too little to qualify for Obamacare subsidies) in the dozen states that have not expanded Medicaid. This is effectively a policy patch on top of an earlier program, Obamacare's Medicaid expansion, that was itself already a kind of health program patch. 

The CBO analysis also looks at two smaller, more technical provisions dealing with employer-sponsored coverage and unemployment, respectively, each of which would cost a little more than $10 billion. 

The CBO analysis doesn't even cover the spending package's proposed Medicare expansion. A previous estimate of a similar proposal in 2019 came in at around $358 billion over a decade. 

It is possible, of course, that some of these programs will be cut, trimmed, or otherwise altered by the time Democrats vote on final legislation. As it has become clear that Democrats don't have enough votes to pass a $3.5 trillion spending bill, there's been a lot of discussion about what, if anything to cut or pare back—possibly by employing timing gimmicks that merely fund a smaller number of years worth of program expenses. (The Medicaid expansion has been singled out as a candidate for the timing-gimmick treatment.) 

Nevertheless, the CBO analysis confirms that these programs as initially conceived are both expensive and not particularly well targeted or cost-effective. 

NEXT: South Dakota Lawmakers, Activists Try To Work Around Gov. Kristi Noem’s Opposition to Marijuana Legalization

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 Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Fortifying elections comes at a cost. But just to folks that pay net positive taxes.

    1. SleepyJoe said the cost was zero.

      1. btw, this is the real DrOz diet everyones talking about, being reviewed at... http://www.Fitapp1.com

      2. I am making a good salary online from home. I’ve made 97,999 dollar’s so for last 5 months working online and I’m a full time student.VBn I’m using an online business opportunity I’m just so happy that I found out about it.

        Try it, you won't regret it!........ VISIT HERE

    2. For citizens of a state with one of the most inhuman healthcare systems, it makes no difference how much money is invested in it. It needs to be redrawn from scratch. Getting sick is simply scary and deadly. I care about my health because I understand: I can not afford treatment. Recently I added https://www.dermalrepaircomplexbhmd.com/ to the list of preventive methods and I hope my skin is not in danger.

  2. "CBO's analysis suggests that the majority of the beneficiaries would be people who already have health coverage:"

    But they don't have GOVERNMENT health coverage.
    How can the fascists be sure of complete control over them?

  3. "Add More than $500 Billion to the Deficit"

    You know what else Democratic control in Washington DC does? It adds $272 billion to the net worths of the 10 richest Americans in just 9 months. So whatever Democrats are doing, it's working.

    #InDefenseOfBillionaires
    #LibertariansForBiden
    #LibertariansForPelosi

  4. I don't understand how you can be calculating the "cost" of free healthcare. What part of free healthcare don't you understand? It's free!

    1. My annoying Reason Movie Ad was for a government program "that costs taxpayers nothing!"
      It's amazing how the actors, as well as the government bureaucrats, are so willing to work for nothing in this specific area.

      1. Strange because I’m sure the child actors that VP Harris hired to do her NASA video did get paid. Not sure there has been a comedy in that genre as good since Spaceballs.

  5. You guys remember when Peter Suderman opposed cutting $772 billion from Medicaid--back when Donald Trump was president?

    https://www.cbo.gov/publication/52849

    I'll never forget it.

    1. Then you could provide a link to whatever you are referring to?

      1. the little magnifying glass icon doubles as a search bar

        1. You’ll have to send a link to the search bar.

          1. A link to a video using animation showing how to access and use the search bar. Things must be HO2-ed down for Dee to cawmprehend.

      2. Fuck off Dee.

    2. Suderman has already. He'll never forget MEAN TWEETS which destroyed the Republic.

  6. The push is on to get as many of these Santa Claus presents distributed before the mid-terms. Then, if (when) the House flips back to the GOP, the GOP won't have the stones to rescind any of the programs; they'll be continued indefinitely with a larger budget each year.

  7. Money printer go brrrrr

    1. BTC over 66k today. Real money keeps getting more valuable as the fiat loses value.

  8. Attitude is a little thing That makes a big difference. To be inspired and always have the best royal attitude status in english to win in life.
    https://bit.ly/3DS3fRo

  9. "...too little to qualify for Obamacare subsidies"

    That doesn't make any sense. The overwhelming number of persons on "Obamacare" ["market" plans] are subsidized to the extent they may pay as little of $60 a month for insurance ["silver" plans]; you cannot have "too little" to qualify for a subsidy. Those who are very low asset/ income qualify for Medicaid.

    As for those who don't qualify for a government subsidy to pay for most of their premium? It is too expensive. Small business owners and sole proprietors are the hardest hit here. And it is shitty insurance besides with huge deductibles and limited coverage.

  10. FWIW, there have been two specific things that are reported to be cut out of the $3.5 trillion budget reconciliation bill.

    1) A program that gives government payments to utilities that increase alternative energy production by 4% per year and penaltaxes those that fail to achieve that goal.

    2) Free community college for everybody.

    One is obviously a chip off the Green New Deal, and the other is a chip off of socialism.

    Free community college would have been a new entitlement that, like the ACA Medicaid expansion, would probably never go away. I oppose expanding entitlements more than anything else because I'm a fiscal conservative and because I hate socialism--but also because everything else is relatively easy to repeal. Everything the progressives do will be heartbreaking, but if all we end up with is stuff that can be undone, we'll be far luckier than we deserve to be for giving these progressives control of policy.

    The worst of it may be expanding Medicare to cover vision and dental. That's almost as bad as George W. Bush expanding Medicare to cover prescriptions. If Medicare had been covering vision and dental in the past, the cost of everything from frames and lenses to laser surgery would have exploded instead of declined.

    The worst victims will be millennials and younger. The jobs and opportunities they're losing will go to pay for the eye and dental care of people much wealthier than they are--instead of the investment and consumption that would have grown the economy and given them higher incomes and more and better opportunities. It's too bad that they're so ignorant. Being libertarian is about always trying to make people see the world they're sacrificing. And to be an honest progressive, you have to be willfully stupid about the trade offs.

    1. P.S. Income growth isn't driven by education. Income levels are driven by supply and demand. Giving people free community college educations doesn't more valuable--if you're squandering their opportunities by crushing the investment and consumption that would drive demand for their employment.

      I remember in the early days of the War on Terror, people used to talk openly about the demand for Jihadis and what was driving it. Some said it was wealthier men with four wives hogging all the women. Others said that although the madrasas of Pakistan and the Middle East produced a lot of students who could recite the Quran, there isn't a big market for people with those skills. Normally, you'd expect them to make an income with an education and start a family, but madrasa graduates were often qualified for little else by joining the Taliban.

      To whatever extent community colleges are NOT a hotbed of students majoring in political advocacy, it's probably because so many of them are working full time and paying their own tuition. Pay for all the people to go to school who would be too lazy to work for the tuition if the government weren't paying for it, and that all goes away. Those lazy fucks won't be majoring in Information Technology. They'll be taking grievance studies, ecology, and anthropology.

      1. Senior class project is strapping a mattress on one’s back and galavanting around campus feeling sorry that some guy no longer likes her.

    2. Meanwhile, the Republican Party, who purportedly understand economics and the power of free markets, could do something useful for once and come up with a plan for free market reforms of healthcare. Instead, Republicans put all their energy into telling us how awful Democrats are.

      1. The GOP had four years to come up with a plan and - Bupkis. Nothing.

        This is why I want gridlock.

        both parties suck

        1. turd lies. It’s what turd does. IF turd is typing, turd is lying.
          turd is a pathological liar, and an ignoramus besides; far too stupid to understand that he is lying, and too stupid to realize everyone else knows he’s lying.
          If turd posts numbers, they are either outright lies or cherry-picked such as to be worthless.
          turd lies; it’s what he does.

      2. Oh, and steaming pile of shit Mike? turd's abysmal stupidity is unquestioned; Mike wishes he were *that* stupid and dishonest. He isn't even close.
        Fuck off and die, Mike; make your dog happy.

      3. Because that's impossible to do. Eliminating entitlements and going back to a free market healthcare system is political suicide. Thus, no Republican will broach that.

        Moreover, proposing to help fix the government programs without eliminating them would piss off the hardcore base of the Republican Party, so they won't do anything with that either.

        Therefore, there is no political incentive for Republicans to do anything but complain.

        That's the problem with electing people to represent, they respond to public pressure when they make decisions. And for Republicans, healthcare is a no-win situation.

        1. They could fix several things without eliminating entitlements: hospital licensing, cross-state insurance markets, malpractice reform, FDA inefficiencies, medical licensing, encourage telemedicine and medical tourism, etc.

          1. Told ya he was stupid!

      4. Meanwhile, the Republican Party, who purportedly understand economics and the power of free markets, could do something useful for once and come up with a plan for free market reforms of healthcare.

        The Republican party if filled with a--holes like Cheney, Bush, Romney, Amash, Kinzinger, etc. Those people like what the Democrats are doing: it makes them and their donors wealthier.

        That's why we didn't get free market reforms of healthcare: the a--hole wing of the Republican party prevented it.

        1. The most significant free market reform of healthcare would be cutting Medicaid, and the Republicans came within three votes of voting to cut it by $772 billion. Rand Paul even voted against doing that. I hope he regrets that now.

      5. Dee responded with a both sides? Shocking!

      6. 1) Remove CON laws
        2) Remove the artificial doctor cap
        3) Allow graduates from specific overseas schools to immediately start working without residency first

        All these things have to be done before you get single payer anyway, because the supply needs to grow so much. Why not do them now?

        1. Supply doesn’t need to grow if the goal is to control access to healthcare.

  11. Meh. It's only money. If it saves one life. Or makes one child smile. Besides, I'm told it'll be Other People's Money so no skin off my nose.

    1. "WASHINGTON—Sen. Kyrsten Sinema’s opposition to tax increases is causing Senate Democrats to look at financing their sprawling social policy and climate package without raising tax rates on businesses, high-income individuals or capital gains, according to people familiar with the matter.

      The Arizona Democrat has told lobbyists that she is opposed to any increase in those rates, according to a person familiar with her remarks, but her stance is now pushing Democrats to more seriously plan for a bill that doesn’t include those major revenue increases."

      ----WSJ

      If Sinema were a Republican, she might be like the new Barry Goldwater. I think she's already to the right of John McCain. Why not make it official Kyrsten? She's definitely to the right of Susan Collins. And There is plenty of room on the other side of the aisle for anti-war types.

      1. In other words,this isn’t going anywhere because the socialists will still kill it. I’ll take a little click bait over the reality that this will become law.

        I agree she should flip and fire Schumer.

        1. I've read that she's bisexual? Maybe that's holding her back. I'm not sure that's as much of a deal breaker for Republican voters as it used to be. The emphasis of the culture war has changed, and, fair or not, relatively conservative guys may be more accepting of bisexual women than men.

          https://www.youtube.com/watch?v=bKq84YDhy7A

          1. How many little girls are being molested by women?
            How mamy bathhouses (or any other random locale frequented for the purpose of anonymous sex) cater to females?
            How many gay women spread deadly viruses around the globe?
            Gay men are a plague.

            1. Seems there is dykotomy between gay men and gay women.

  12. The CBO does no research at all; it examines and analyzes what data congress delivers. During the O-care debate, CBO determined that there would be zero impact on the federal budget, such was the bullshit provided by congress.
    So if congress isn't able to provide sufficient bullshit such that the CBO finds this addition to the deficit, assume it is far, far worse than claimed.

  13. Jen Psaki said it the whole $3.5 trillion package won't add 1 cent to the deficit, and when ask how that could be, she said because "she said so".
    No that is transparency!!! (sarc)

  14. great Post!!! thanks For Sharing this
    Post

  15. Nice site, i like this site tiger388

Please to post comments

Comments are closed.