Avik Roy on the Rising Projected Cost of PPACA

by Reihan Salam

First the Obama White House acknowledged that the CLASS program was unviable. Now the president’s budget is calling for an increase in exchange subsidies, as Avik Roy reports:

For the years in which the two exchange budgets [FY12 and FY13] overlap—2014 through 2021—the White House states that it expects to spend $111 billion more in its new budget than it projected a year ago. In 2021 alone, the difference between the two budgets is almost $20 billion, implying that exchange spending will be up by over $200 billion in the decade following 2021.

And that’s if we’re lucky. If businesses do what the new health law clearly incentivizes them to do, exchange spending could be up by over $2 trillion in the decade following 2021.

This certainly won’t surprise PPACA’s critics, many of whom argued that the cost projections that helped sell the bill were unrealistic. 

The Agenda

NRO’s domestic-policy blog, by Reihan Salam.