GAO: ObamaCare could add $6.2 trillion to national debt
There is some more bad news for ObamaCare. According to a recently released report from the Government Accounting Office (GAO), the Patient Protect and Affordable Care Act (PPACA) — President Obama’s signature domestic policy achievement — could cost taxpayers dearly in the long-term if cost-savings measures don’t work as intended.
The report, which was requested by Sen. Jeff Sessions (R-AL), who is the ranking Republican on the Senate Budget Committee, explains that the “effect of PPACA on the long-term fiscal outlook depends largely on whether elements designed to control cost growth are sustained.”
“Overall, there was notable improvement in the longer-term outlook after the enactment of PPACA under our Fall 2010 Baseline Extended simulation, which, consistent with federal law at the time the simulation was run, assumed the full implementation and effectiveness of the costcontainment provisions over the entire 75-year simulation period,” noted the GAO. “In contrast, the long-term outlook in the Fall 2010 Alternative simulation worsened slightly compared to our January 2010 simulation. This is largely due to the fact that cost-containment mechanisms specified in PPACA are assumed to phase out over time while the additional costs associated with expanding federal health care coverage remain.”
The baseline scenario is used by the government budget officials to determine the the cost effects of current law. However, the alternative scenario gauges budget implications based on past behavior of Congress, such as its proclivity for bypassing scheduled Medicare payments to doctors (also known as the “doc fix”).
Interestingly, Richard Foster, Chief Actuary of the Centers for Medicare and Medicaid Services, cast doubt on these cost-savings during a congressional hearing back in January 2011.
Rep. Tom McClintock (R-CA) asked Foster whether the White House’s claim that ObamaCare would bring down healthcare costs was true or false. Foster, who chuckled at the question, replied, “I would say false…more so than true.”
So what is the likely damage? The GAO predicts that if these the cost-savings mechanisms don’t hold up, ObamaCare could as as much as 0.7% to the national debt, which would be driven by “increased spending on Medicaid, CHIP, and exchange subsidies.” That may not sound like a lot of money, but Sen. Session’s office did the math and found that to be a $6.2 trillion increase in the national debt because of ObamaCare.
Here’s the breakdown from the GAO:
And given history, this is what we should be expecting in the long-term from ObamaCare — Americans will lose their coverage, premiums will skyrocket, there won’t be any cost-savings, and the national debt will continue to explode.
H/T: Philip Klein