Monday, June 22, 2015
The Congressional Budget Office Still Does Not Get ObamaCare
The Congressional Budget Office Gets It Wrong Again on ObamaCare The CBO issued a report last week stating that full repeal of ObamaCare, The Affordable Care Act to the CBO, will increase the deficit by $137 billion over 10 years. $13.7 billion/year is petty cash, or “chump change,” to this Administration, but that’s not the point. The CBO spent six months working with the Democratic Congress to massage the figures to make ObamaCare appear to reduce the deficit prior to enactment. Thus, a series of tax increases resulted, many of which are devastating to the economy. The Act resulted in a decrease in full time jobs, workers being shifted to part time, and millions losing their existing coverage, receiving lesser coverage at a higher cost The CBO analysis is simple. Federal subsidies will drop by $1.15 trillion, a net gain. The decrease in subsidies would be accompanied by a $631 billion drop in tax receipts through the dozens of taxes contained in the act. Further, cost controls, that is, price constraints on insurers, hospitals and others will be lifted, increasing costs by $879 billion, leading to the $137 billion deficit. This is the analysis of bean counters, oblivious to reality. It totally ignores reality. ObamaCare will bankrupt the economy. It defies the basic laws of economics and the reality of the marketplace – the law of supply and demand. It increases demand for medical services while restricting, indeed shrinking, supply. The cost restrains on doctors are driving them out of the market, thereby restricting supply. Yet nothing in the Bill was intended to increase the supply of doctors. The cost constrains are like a pressure cooker, which is threatening to blow. Implicit in CBO analyses is that tax increases, money flowing into the government’s coffers, are good for the government, and hence the country and economy. The CBO reported a few months ago that ObamaCare has reined in cost increases. That is an amazing statement considering that premiums in the non-group market rose 24.4% in 2014. All but six states are witnessing substantial premium increases in the non-group market. Maryland and Tennessee are looking at 30% increases while Oregon is seeing a 25% rise in premiums. The premium rises, coupled with the high deductibles and limited coverage of most plans, will drive many Americans out of the health insurance market. The premiums and high deductibles will suck away much of the disposable income of less affluent Americans, also thereby creating a drag on the economy. Even the insurance companies, hospitals, and pharmaceutical companies are realizing they made a fool’s bargain in getting sucked into supporting ObamaCare. The public still opposes the Act. The CBO does not get the message.