Study: Health care overhaul would raise deficit by at least 340 billion dollars
Tuesday, April 10, 2012
Study: Health care overhaul would raise deficit by at
least $340 billion
By: Associated Press, April 10, 2012
WASHINGTON - Reigniting a debate about the bottom line for
President Barack Obama's health care law, a leading conservative
economist estimates in a study to be released Tuesday that the
overhaul will add at least $340 billion to the deficit, not reduce
it.
Charles Blahous, who serves as public trustee overseeing
Medicare and Social Security finances, also suggested that federal
accounting practices have obscured the true fiscal impact of the
legislation, the fate of which is now in the hands of the Supreme
Court.
Officially, the health care law is still projected to help
reduce government red ink. The Congressional Budget Office, the
government's nonpartisan fiscal umpire, said in an estimate last
year that repealing the law actually would increase deficits by
$210 billion from 2012 to 2021.
The CBO, however, has not updated that projection. If $210
billion sounds like a big cushion, it's not. The government has
recently been running annual deficits in the $1 trillion range.
The White house dismissed the study in a statement late Monday.
Presidential assistant Jeanne Lambrew called the study "new math
(that) fits the old pattern of mischaracterizations" about the
health care law.
Blahous, in his 52-page analysis released by George Mason
University's Mercatus Center, said, "Taken as a whole, the
enactment of the (health care law) has substantially worsened a
dire federal fiscal outlook.
"The (law) both increases a federal commitment to health care
spending that was already unsustainable under prior law and would
exacerbate projected federal deficits relative to prior law,"
Blahous said.
The law expands health insurance coverage to more than 30
million people now uninsured, paying for it with a mix of Medicare
cuts and new taxes and fees.
Blahous cited a number of factors for his conclusion:
- The health care's law deficit cushion has been reduced by more
than $80 billion because of the administration's decision not to
move forward with a new long-term care insurance program that was
part of the legislation. The Community Living Assistance Services
and Supports program raised money in the short term, but would have
turned into a fiscal drain over the years.
- The cost of health insurance subsidies for millions of
low-income and middle-class uninsured people could turn out to be
higher than forecast, particularly if employers scale back their
own coverage.
- Various cost-control measures, including a tax on high-end
insurance plans that doesn't kick in until 2018, could deliver less
than expected.
The decision to use Medicare cuts to finance the expansion of
coverage for the uninsured will only make matters worse, Blahous
said. The money from the Medicare savings will have been spent, and
lawmakers will have to find additional cuts or revenues to
forestall that program's insolvency.
Under federal accounting rules, the Medicare cuts are also
credited as savings to that program's trust fund. But the CBO and
Medicare's own economic estimators already said the government
can't spend the same money twice.
Blahous served in the George W. Bush White House from 2001-2009,
rising to deputy director of the National Economic Council. He
currently is a senior research fellow at the Mercatus Center.
His study was first reported late Monday by The Washington
Post.