When it comes to Social Security, any proposal to reduce future COLA increases it is characterized as cutting benefits. When it comes to Obamacare, a lowered increased cost projection comes out as proof of the savings being generated by the Affordable Care Act. Neither is true‼️ If you expected a raise of 4%, but got 3.5%, you still received a raise. If you expected to spend $500 more, but spent $450, you still spent more.
Even if you accept on face value that the Affordable Care Act is directly responsible for slowing the growth in health care spending (which it is not), you must offset that with the new taxes imposed on individuals and organizations, with the penalties paid, the administration of the law and with the cost-shifting of medical expenses to many more individuals than are benefiting from new subsidized coverage.
The Congressional Budget Office’s new report shows updated cost projections for the insurance coverage expansion in the Affordable Care Act. With the debate over the ACA remaining so intensely polarized, advocates moved aggressively to spin this routine update as reflecting favorably on the law. A front-page article in the Washington Post referred to the new findings as showing “savings,” quoting a supporter as saying, “I can’t see how people can continue to say . . . that Obamacare had no cost containment in it.” Such comments in the wake of CBO’s update are flawed interpretations of the new estimates and what they signify. The following explains what CBO has actually projected: basically that the ACA will do less to expand coverage than previously estimated.
#1: CBO’s latest re-estimates are of ACA’s costs, not of savings or of effectiveness in cost containment.
Specifically, CBO has re-estimated the costs of providing subsidies (tax credits) for participants in the ACA’s health insurance exchanges, as well as the law’s Medicaid expansion and small-business tax credits. Against this CBO has netted out some of the ACA’s measures designed to offset a portion of the costs, including penalties paid by individuals who fail to carry insurance, penalties paid by employers who fail to offer sufficient coverage, and an excise tax on high-premium health insurance plans. The re-scored provisions taken together are not by any stretch “savings,” but rather represent significant federal costs created by the ACA.
For the most part, press coverage has reflected good understanding of this point. As the aforementioned Post article states, “the law is still expensive,” and the headline of that article refers correctly to what the law “will cost taxpayers.” CNBC’s headline also refers to “Obamacare costs,” and even MSNBC’s refers to the “cost of the Affordable Care Act.” It is certainly good news when something costs less than we formerly thought it would, but the ACA still embodies costs that taxpayers did not face until its passage.
http://www.economics21.org/commentary/cbo-says-aca-insure-fewer-people-predicted-2015-03-16
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