The nonpartisan Congressional Budget Office (CBO) released an absolutely devastating report on this morning, finding that Obamacare will cost the United States $2 trillion over the next 10 years. In addition to budgetary implications, the report explains that the law will reduce the number of full-time workers by 2.5 million workers over the same timeframe.
The costs of the taxpayer-funded health insurance subsidies and Medicaid expansion provisions of the Affordable Care Act will exceed $2 trillion between 2014 and 2024. Once tax receipts related to Obamacare are factored in, the net-cost of the law is nearly $1.5 trillion in the 10-year budget window.
The CBO estimates that budget deficits will increase by $7.3 trillion over the next 10 years, up from the $6.3 trillion projection it made last year. Obamacare is one of the contributing factors to the $1 trillion increase.
In March 2010, the CBO projected that Obamacare would cost $940 billion over 10 years and reduce the budget deficit by $138 billion. That projection was based on rosy scenarios that weren’t consistent with reality in Washington. It also included just six years of expenditures related to the law.
The CBO revised has constantly revised its cost estimates of Obamacare, accounting for a full 10 years worth of expenditures. In May 2013, for example, the agency revised its projection to $1.8 trillion, up from the $1.76 trillion price tag the previous year.
Perhaps the most devastating part of the report relates to Obamacare’s affect on employment. According to the CBO, the law will reduce compensation by 1% and the labor force by some 2.3 million full-time workers by 2021 and 2.5 million by 2024.
“ACA will cause a reduction of roughly 1 percent in aggregate labor compensation over the 2017-2024 period, compared with what it would have been otherwise,” noted the CBO. “The reduction in CBO’s projections of hours worked represents a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024.”
“Although CBO projects that total employment (and compensation) will increase over the coming decade, that increase will be smaller than it would have been in the absence of the ACA,” the report added.
In February 2011, CBO Director Doug Elemendorf said that Obamacare would reduce employment by 800,000 by 2021. The reason for the upward revision is that Obamacare subsidies encourage people not to work as much as they could.
The CBO also revised the number of Americans it expects to enroll in the Obamacare exchanges from 7 million, down to 6 million.