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All Da King's Men

ObamaCare Reduces The Deficit ?

By Da King Published: January 8, 2011

The new Republican-led House voted to repeal ObamaCare yesterday by a vote of 236-181. It was a bipartisan effort, with four Democrats joining Republicans in the repeal effort....oh alright, it wasn't very bipartisan at all. The repeal legislation will now move on to the Democrat-led Senate, where it will die. Even if it did somehow pass the Senate, I think I can say with confidence that Obama will veto repeal of his signature legislation.

Democrats have been trumpeting the fact that ObamaCare will reduce the deficit by $230 billion over ten years. Republicans are extremely skeptical of that figure. The Beacon Journal ran a New York Times article on friday supporting the notion that ObamaCare would reduce the deficit. Because the article left out a lot more than it explained, allow me to elaborate.

The CBO did score ObamaCare as reducing the deficit by $230 billion over ten years. That much is true, but there's a lot more to that story. The Times left out HOW this alleged deficit reduction would occur. From the American Spectator:

The Congressional Budget Office, in an email to Capitol Hill staffers obtained by the Spectator, has said that repealing the national health care law would reduce net spending by $540 billion in the ten year period from 2012 through 2021. That number represents the cost of the new provisions, minus Medicare cuts. Repealing the bill would also eliminate $770 billion in taxes. It's the tax hikes in the health care law (along with the Medicare cuts) which accounts for the $230 billion in deficit reduction.

Thus, repealing ObamaCare would REDUCE federal spending by $540 billion, REDUCE taxes by $770 billion, and eliminate Medicare cuts. Maybe it's just me, but I think these things were worth mentioning by either the New York Times or the Akron Beacon Journal, seeing as how they are, you know, alleged NEWS organizations.

They also might have mentioned that adding over 20 million people to the Medicaid rolls, as ObamaCare would do, would further burden state governments that are already in the red and trying to figure out how to cover their budgetary shortages.

They also might have mentioned that Medicaid is ALREADY in fiscal trouble, even without ObamaCare:

Medicaid—the joint federal–state health insurance program for numerous categories of the poor—has significant problems. Medicaid spending growth is unsustainable, increasing over 6 percent annually (in inflation-adjusted dollars) during the past two decades.[2] Medicaid growth has resulted in three federal bailouts in the past decade, and its growth is crowding out other state priorities, such as education, transportation, and law enforcement.

Yet, we're supposed to believe adding over 20 million more people to Medicaid will make things better ? Here's what CMS, the government office that manages Medicare/Medicaid, had to say:

Despite Medicaid’s enormous problems, Obamacare expands it dramatically. Beginning in 2014, states are required to cover all individuals below 138 percent of the federal poverty line with Medicaid.The CMS estimates that this will increase enrollment in Medicaid by 23 million individuals in 2014 at an added annual cost of over $70 billion.

Obamacare requires that states increase Medicaid reimbursement rates for PCPs to applicable Medicare payment rates for 2013 and 2014 to encourage PCPs to treat Medicaid patients. The estimated annual cost of raising the reimbursement rates by state is provided in Table 1. However, on January 1, 2015, both the mandate and the federal funding paying for it expire.

The "Table 1" mentioned above in reference to increasing reimbursement rates to physicians, is known as the "doc fix." Here is Table 1:

If you read the print at the top of Table 1, you will see that the CBO ObamaCare cost estimates do not include the $3-6.83 billion annual "doc fixes." Nor does it include the additional healthcare costs incurred by the states.

The Wall Street Journal noted other bogus cost estimates within ObamaCare:

The accounting gimmicks are legion, but we'll pick out a few: It uses 10 years of taxes to fund six years of subsidies. Social Security and Medicare revenues are double-counted to the tune of $398 billion. A new program funding long-term care frontloads taxes but backloads spending, gradually going broke by design. The law pretends that Congress will spend less on Medicare than it really will, in particular through an automatic 25% cut to physician payments that Democrats have already voted not to allow for this year.

Finally, let's look at the the government's track record on estimating healthcare costs. From the Daily Caller:

Tthe House Ways and Means Committee estimated that the original Medicare hospital insurance program would cost $9 billion annually by 1990. Actual spending that year was $67 billion.

The same committee predicted in 1967 that the total Medicare program would cost $12 billion in 1990. Actual spending was $110 billion.

In the case of Medicaid DSH — a program that reimburses states for payments to hospitals that treat Medicaid and uninsured patients — CBO estimated in 1987 that payments would amount to less than $1 billion in 1992. The actual cost that year was $17 billion

As is typical of our federal government, costs usually exceed the a whole bunch.

If you want to know why Republicans are extremely skeptical, these are a few of the reasons why. Count me as extremely skeptical too. I've seen our government in action too many times to have much faith in them (see: $14 trillion debt, the rape of the Social Security Trust Fund, $55 trillion in unfunded entitlement mandates, etc, etc, etc). Now the government is telling me that adding tens of millions of people to the entitlement rolls for healthcare will reduce the deficit...and I'm supposed to believe them ???? Sorry. I can't suspend my disbelief that far. What ObamaCare gives us is what almost all Democratic programs give us - tax and spend. That is the precise mindset I'm dedicated to defeating, before we all go broke.

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