Obamacare's Deficit Promise a Lingering Myth


We’ve addressed this before, but claims about “Obamacare” being deficit neutral are STILL heard to this day. In an effort to once again diffuse this misconception, let’s examine how the Patient Protection and Affordable Care Act (ACA) has been scored over time – for anyone citing old numbers, this should put to bed any “deficit-neutral” talk.

For those inclined to believe the President, its understandable why they might echo his original claims on the subject. In September 2009 the President claimed "I will not sign a plan that adds one dime to our deficits — either now or in the future."

While budget gimmickry allowed for Congressional Budget Office scores that backed these statements, anyone paying attention over the last three years should know better – there’s that word again!

Just before the law was passed in March 2010, the Congressional Budget Office estimated that the law would save $130 billion over its first decade.

We started the saga of these Affordable Care Act claims with that CBO estimate, yet when picked apart, it was revealed to be rather concocted for a number of reasons.

First, the package given to the CBO ignored what’s dubbed the “doc fix”. This $371 billion Medicare reimbursement cut for doctors is routinely delayed or “fixed”, meaning Medicare habitually ignores it and spends the ever increasing sum anyway. Not including this hefty price in government healthcare artificially lowers its total cost by compartmentalizing the spending in multiple bills.

The law also double counted about $70 billion in savings from the CLASS Act, along term care program. Finally, the CBO is forced to assume that Congressional projections for health spending will be abided by and not dumped out of political convenience, another dubious notion.

As the law came ever closer to implementation, the delay in the employer mandate happened. This will cost as much as $10 billion as expected fines are not collected over the year-long postponement, according to CBO. The mandate delay is also expected to push additional Americans into the federally subsidized exchanges, which would push costs up by as much as $5 billion more.

Now, CBO has revised its ten-year cost estimate for Obamacare to upwards of $180 billion.

The CBO report is paired with a Government Accountability Office report from January which maintains most of the supposed savings from the ACA are contingent on cost saving mechanisms and assumptions that place the political burden on Congress to maintain. The GAO “expressed concerns” about the will of Congress in this regard. That same report calculated the ACA would add an additional $6.2 trillion to America’s long term deficit.

This information should preclude any claims that Obamacare is deficit-neutral or even reduces the deficit. Unfortunately, we have to keep saying “should”, which means the parties guilty of continuing these claims are likely to continue, and we can keep calling them on it.