Surprise! Obamacare subsidies will cost 65% more than estimated in 2012 budget

Rick Moran
See Obamacare. See Obamacare subsidies. See Obamacare subsidies rise. Rise, rise rise. See Mr. and Mrs. America. See Mr. and Mrs. America get mad. Mad, mad mad.

Perhaps the White House should take a remedial reading course.

Politico:

According to the new White House budget, from the time the exchanges open in 2014 to 2021, the administration expects to spend about $606 billion on subsidies, a massive commitment of federal resources.

That's about 27 percent more than the $478 billion projected in the president's budget last year, and 65 percent more than the $367 billion for the same period in the 2012 budget.

But experts -- and government actuaries -- attribute much of the jump to the Supreme Court's changing the rules of the game when it made the Medicaid expansion under the health law optional for states.

[...]

The Congressional Budget Office estimates that it will cost about $9,000 in subsidies for a person who would have qualified for Medicaid under the expansion -- compared to $6,000 for Medicaid coverage.

On the other hand, CBO projects that 3 million fewer people will be covered in 2022 because of state decisions not to expand Medicaid. On balance, CBO projects the ruling will save the government about $80 billion through 2022.

The Supreme Court ruling might be "a blessing in disguise," said Len Nichols, director of the Center for Health Policy Research and Ethics at George Mason University and a supporter of the health law. "It provides some savings upfront, which is welcome and will give states some time to buy in."

But the budget makes the numbers difficult to compare. It projects the expected premium subsidies specifically but does not break out the expected spending on the Medicaid expansion in a similar way. This year, the budget did revise down its total expected Medicaid spending in 2020 by about $135 billion, although the reduction is only partly due to consequences from the court.

The truth is that the cost is still a guessing game. States are still trying to make up their minds on what to do. And it's not known how many people will enroll in the state-based exchanges, with or without Medicaid expansion.

Every six months or so, the CBO revises it's estimate of the cost of Obamacare. Remember the good old days when the estimate was only about $1 trillion? In February, the CBO jacked up its estimate again:

First, more expensive: The CBO significantly hiked the amount of money needed to fund the subsidies available through Obamacare's exchanges, hiking them by $233 billion. IBD explains: "The CBO's new baseline estimate shows that ObamaCare subsidies offered through the insurance exchanges -- which are supposed to be up and running by next January -- will total more than $1 trillion through 2022, up from $814 billion over those same years in its budget forecast made a year ago. That's an increase of nearly 29%. The CBO upped the 10-year subsidy cost by $32 billion since just last August." Part of that is expecting more people in the exchanges thanks to employer dumping and more limited Medicaid expansion, but "The rest is largely the result of the CBO's sharp increase in what it expects the average subsidy will be. Last year, the CBO said the average exchange subsidy for those getting federal help when ObamaCare goes into effect next year would be $4,780. Its latest estimate raised that to $5,510 -- a 15% increase. All these numbers are up even more from the CBO's original forecast made in 2010, which had the first-year subsidy average at $3,970."

No doubt, those numbers will change again before year end as the bureaucrats bury us in new regulations and rules that are bound to make Obamacare even more expensive.

See Obamacare. See Obamacare subsidies. See Obamacare subsidies rise. Rise, rise rise. See Mr. and Mrs. America. See Mr. and Mrs. America get mad. Mad, mad mad.

Perhaps the White House should take a remedial reading course.

Politico:

According to the new White House budget, from the time the exchanges open in 2014 to 2021, the administration expects to spend about $606 billion on subsidies, a massive commitment of federal resources.

That's about 27 percent more than the $478 billion projected in the president's budget last year, and 65 percent more than the $367 billion for the same period in the 2012 budget.

But experts -- and government actuaries -- attribute much of the jump to the Supreme Court's changing the rules of the game when it made the Medicaid expansion under the health law optional for states.

[...]

The Congressional Budget Office estimates that it will cost about $9,000 in subsidies for a person who would have qualified for Medicaid under the expansion -- compared to $6,000 for Medicaid coverage.

On the other hand, CBO projects that 3 million fewer people will be covered in 2022 because of state decisions not to expand Medicaid. On balance, CBO projects the ruling will save the government about $80 billion through 2022.

The Supreme Court ruling might be "a blessing in disguise," said Len Nichols, director of the Center for Health Policy Research and Ethics at George Mason University and a supporter of the health law. "It provides some savings upfront, which is welcome and will give states some time to buy in."

But the budget makes the numbers difficult to compare. It projects the expected premium subsidies specifically but does not break out the expected spending on the Medicaid expansion in a similar way. This year, the budget did revise down its total expected Medicaid spending in 2020 by about $135 billion, although the reduction is only partly due to consequences from the court.

The truth is that the cost is still a guessing game. States are still trying to make up their minds on what to do. And it's not known how many people will enroll in the state-based exchanges, with or without Medicaid expansion.

Every six months or so, the CBO revises it's estimate of the cost of Obamacare. Remember the good old days when the estimate was only about $1 trillion? In February, the CBO jacked up its estimate again:

First, more expensive: The CBO significantly hiked the amount of money needed to fund the subsidies available through Obamacare's exchanges, hiking them by $233 billion. IBD explains: "The CBO's new baseline estimate shows that ObamaCare subsidies offered through the insurance exchanges -- which are supposed to be up and running by next January -- will total more than $1 trillion through 2022, up from $814 billion over those same years in its budget forecast made a year ago. That's an increase of nearly 29%. The CBO upped the 10-year subsidy cost by $32 billion since just last August." Part of that is expecting more people in the exchanges thanks to employer dumping and more limited Medicaid expansion, but "The rest is largely the result of the CBO's sharp increase in what it expects the average subsidy will be. Last year, the CBO said the average exchange subsidy for those getting federal help when ObamaCare goes into effect next year would be $4,780. Its latest estimate raised that to $5,510 -- a 15% increase. All these numbers are up even more from the CBO's original forecast made in 2010, which had the first-year subsidy average at $3,970."

No doubt, those numbers will change again before year end as the bureaucrats bury us in new regulations and rules that are bound to make Obamacare even more expensive.