Republican innumeracy basically explains half of their policy prescriptions, but as these things go, this is a pretty good one.
The short story is this. The 2010 Affordable Care Act carried a price tag of $940 billion over ten years. This was mainly accomplished by delaying the implementation until 2014 to keep the 10-year budget window costs artificially low. Given how public opinion has lagged on the law, I’m guessing some Democrats would want that decision back.
Anyhoo, fast forward to 2012. The Congressional Budget Office put out their estimate of 10-year costs on the budget, including the Affordable Care Act. And because they’re looking at a different 10 years, adding two implementation years and taking away non-implementation years, the revealed cost was always going to look higher. And Republicans know this, but they prefer to feign ignorance and rally their base with dark fears of “exploding” costs:
“The new CBO projection estimates that the law will cost $1.76 trillion over 10 years — well above the $940 billion Democrats originally claimed,” Rep. Tom Price (R-GA), the No. 4 House Republican, declared in a press advisory. The powerful Energy & Commerce Committee said the CBO report “reveal[s] a shocking new sticker price of $1.8 trillion.”
Fox News and other conservative outlets have trumpeted the out-of-context number as vindication for those who warned it’ll cost far more than advertised.
Even this estimate adds a budget year that it didn’t in the initial analysis, for some reason. So it was destined to be a higher figure.
In fact, if you look at total costs, which Kevin Drum cites, you find that:
The current estimate of the gross costs of the coverage provisions ($1,496 billion through 2021) is about $50 billion higher than last year’s projection; however, the other budgetary effects of those provisions, which partially offset those gross costs, also have increased in CBO and JCT’s estimates (to $413 billion), leading to the small decrease in the net 10-year tally.
So in the aggregate, the net effect to the deficit is about $48 billion lower now than before. But let’s dig a bit deeper than that. Why are the net costs lower?
CBO and JCT’s projections of health insurance coverage have also changed since last March. Fewer people are now expected to obtain health insurance coverage from their employer or in insurance exchanges; more are now expected to obtain coverage from Medicaid or CHIP or from nongroup or other sources. More are expected to be uninsured. The extent of the changes varies from year to year, but in 2016, for example, the ACA is now estimated to reduce the number of people receiving health insurance coverage through an employer by an additional 4 million enrollees relative to the March 2011 projections. In that year, CBO and JCT now estimate that there will be 2 million fewer enrollees in insurance exchanges. In the other direction, CBO and JCT now estimate that, in 2016, the ACA will increase enrollment in Medicaid and CHIP slightly more than previously estimated (but considerably more in 2014 and 2015), and it will reduce the number of people with nongroup or other coverage by 3 million less and the number of uninsured people by 2 million less than previously estimated.
Compared with prior law, the ACA is now estimated by CBO and JCT to reduce the number of nonelderly people without health insurance coverage by 30 million to 33 million in 2016 and subsequent years, leaving 26 million to 27 million nonelderly residents uninsured in those years (see Table 3, at the end of this report). The share of legal nonelderly residents with insurance is projected to rise from 82 percent in 2012 to 93 percent by 2022. According to the current estimates, from 2016 on, between 20 million and 23 million people will receive coverage through the new insurance exchanges, and 16 million to 17 million people will be enrolled in Medicaid and CHIP. Also, 3 million to 5 million fewer people will have coverage through an employer compared with the number under prior law.
Some of these changes are due to new legislation, and others to a revised economic outlook. But I would say that less people covered overall would probably have an impact on the cost of the plan. And the reason that can shift at all is because this is not a universal health care plan. In 2022 there will still be 27 million uninsured Americans, according to this projection. That’s definitely better than where we are today, but it’s just not a universal plan. It’s about half-universal, because it closes the uninsured gap by about half. The big difference between this plan and Romneycare, in fact, was that the Massachusetts plan focused on coverage first and left the dealing with costs for later. The Affordable Care Act did the opposite, and as a result, it’s not a universal plan.