The Corner

Just a $450 Billion Obamacare ‘Glitch’, That’s All

Surprise, surprise. In “a twist government number crunchers say they discovered only after the complex bill was signed,” a provision in Obamacare would allow early-retiree couples earning as much as $64,000 to join the rolls of Medicaid — that’s up to three million people. Here’s Avik Roy, and via him chief Medicare/Medicaid actuary Richard Foster, on the cost of the provision:

If we do a back-of-the-envelope calculation, in which the average annual Medicaid expenditure per early retiree is $15,000 per year, the ten-year cost of this glitch is $450 billion. “It’s almost like allowing middle-class people to qualify for food stamps, [Foster] suggested”:

“I don’t generally comment on the pros or cons of policy, but that just doesn’t make sense,” Foster said during a question-and-answer session at a recent professional society meeting…”This is a situation that got no attention at all,” added Foster. “And even now, as I raise the issue with various policymakers, people are not rushing to say … we need to do something about this.”

Indeed, administration officials and senior Democratic lawmakers say it’s not a loophole but the result of a well-meaning effort to simplify rules for deciding who will get help with insurance costs under the new health care law.

The reason for the glitch, if you can call it that, is that prior to Obamacare, retirees’ Social Security benefits were counted as income in order to determine eligibility for Medicaid. Post-PPACA, Social Security benefits are no longer counted as income for this purpose, allowing millions of additional Americans to qualify for taxpayer subsidies.

Nancy Pelosi isn’t often right, but her wisdom is again and again borne out on one topic. We passed the bill over a year ago, and we’re still finding out what’s in it.


The Latest