How expensive will Obamacare be? Ever since the gimmick-laden law limped over the finish line, questions have arisen. Will the failure to bend the health-care “cost curve” translate into higher insurance premiums, greater subsidies, and bigger deficits? Will employers and employees do the collective math and send millions more into the federally subsidized exchanges? Does the reality of a sub-par recovery mean more unemployed, more poor, and thus more subsidies?
These remain important questions. But perhaps obscured by this discussion is the fact that the subsidies are already 25 percent more expensive than originally envisioned. As I laid out in a recent study, a straightforward reading of CBO reports shows a striking cost escalation between March 2010 (the time of passage) and June 2012 (after the Supreme Court decision).
Specifically, looking at the years covered by all cost estimates during that period (2012–2019), at the time of passage the ACA subsidies were projected to cost the federal taxpayer $462 billion. Less than a year later, the cost had risen to $515.5 billion — an increase of 11.6 percent. By 2012, the estimated price tag had jumped to $574 billion, fully 24.2 percent higher than originally anticipated.
It could get worse, but the budget cost of subsidies is already on a scary trajectory.
And that is not the only cost to worry about. The impact of Obamcaare on the economy has been a concern from the outset. There is nothing about its toxic mix of explosive entitlement spending, higher taxes, and overwhelming regulation that constitutes pro-growth policy.
A striking reminder of the regulatory impacts was offered up in yesterday’s Wall Street Journal by self-described Obamacare supporter and former Treasury official David Gamage. His conclusion: “I have been researching ObamaCare and assisting with its implementation, and have come to this realization: Without further reforms, the law will create unnecessary costs for working-class Americans.” The only news there is the messenger.