Study: ObamaCare Would Increase Deficit


obama-health-careA former Bush administration official and leading conservative economist says President Obama’s health care law will add at least $340 billion to the national deficit, a claim the White House denies.

In a study to be released today, Charles Blahous, who serves as public trustee overseeing Medicare and Social Security finances, says federal accounting practices have obscured the true fiscal impact of ObamaCare.

Officially, the health care law is still projected to help reduce government red ink. The Congressional Budget Office, the government’s non-partisan fiscal umpire, said in an estimate last year that repealing the law actually would increase deficits by $210 billion from 2012-2021.

The CBO, however, has not updated that projection. If $210 billion sounds like a big cushion, it’s not. The government has recently been running annual deficits in the $1 trillion range.

“Taken as a whole, the enactment of the (health care law) has substantially worsened a dire federal fiscal outlook,” Blahous wrote in his 52-page analysis, released by George Mason University’s Mercatus Center. “The (law) both increases a federal commitment to health care spending that was already unsustainable under prior law and would exacerbate projected federal deficits relative to prior law.”

Blahous cited a number of factors for his conclusion:

— The health care’s law deficit cushion has been reduced by more than $80 billion because of the administration’s decision not to move forward with a new long-term care insurance program that was part of the legislation. The Community Living Assistance Services and Supports program raised money in the short turn, but would have turned into a fiscal drain over the years.

— The cost of health insurance subsidies for millions of low-income and middle-class uninsured people could turn out to be higher than forecast, particularly if employers scale back their own coverage.

— Various cost control measures, including a tax on high-end insurance plans that doesn’t kick in until 2018, could deliver less than expected.

The decision to use Medicare cuts to finance the expansion of coverage for the uninsured will only make matters worse, Blahous said. The money from the Medicare savings will have been spent, and lawmakers will have to find additional cuts or revenues to forestall that program’s insolvency.

Under federal accounting rules, the Medicare cuts are also credited as savings to that program’s trust fund. But the CBO and Medicare’s own economic estimators already said the government can’t spend the same money twice.

However, the White House said Monday that Blahous’ “new math” calculations are false, and that the health care law will reduce the deficit by billions.

“Claims that the Medicare savings in the ACA have somehow been “double counted” are without merit,” Jeanne Lambrew, the Deputy Assistant to the President for Health Policy said in a release, citing the Center on Budget and Policy Priorities. “Deficit-reduction legislation that includes Medicare provisions has been accounted for in exactly the same way in previous Congresses under both political parties.”

Lambrew said Blahous’ findings fit a “pattern of mischaracterization” about the law, while the facts show the law would reduce the deficit.

Blahous served in the George W. Bush White House from 2001-2009, rising to deputy director of the National Economic Council. He currently is a senior research fellow at the Mercatus Center.

His study was originally cited in The Washington Post Monday.

{Fox News/ Newscenter}


  1. Remember Churchill?
    He said “the best thing you can do is put milk in babies mouths. A healthy citizen is a nations greatest asset”. So while this could increase some of our obligations to spend, it might also result in healthier citizens who can work and contribute too. Not a bad trade off dont you think?

  2. Lousy trade-off. National Health Care has worked really well for the UK, has it? It’s bankrupting them and it’s going to do the same for us!