The Corner

You Might Want to Sit Down for This One

Whew, you ready? Okay. Okay.

Obamacare will cost more than advertised.

I know! I’m sure you’re wondering, as I am, how there can be poetry in a world where the Democrats can underestimate the cost of a byzantine entitlement structure that floods one-sixth of our economy with so many perverse incentives that it should be subject to Megan’s Law.

A new report by the economists at Health & Human Services doesn’t answer that question, but it does conclude that rather than cutting costs, the Affordable Care Act will increase medical spending by at least 1 percent over ten years, a figure that could get bigger since — as literally everybody in the entire world knows – the government is unlikely to follow through on proposed Medicare cuts that would push 15 percent of hospitals into the red and likely result in service cuts for seniors:

The report acknowledged that some of the cost-control measures in the bill — Medicare cuts, a tax on high-cost insurance and a commission to seek ongoing Medicare savings — could help reduce the rate of cost increases beyond 2020. But it held out little hope for progress in the first decade.

“During 2010-2019, however, these effects would be outweighed by the increased costs associated with the expansions of health insurance coverage,” wrote Richard S. Foster, Medicare’s chief actuary. “Also, the longer-term viability of the Medicare … reductions is doubtful.” Foster’s office is responsible for long-range costs estimates.

The report also projects that cuts in Medicare Advantage, the wildly popular market-driven alternative passed by Republicans, will drive as many of 50 percent of seniors out of their plans and into more traditional (and more insolvent) Medicare plans, while raising their out of pocket costs.

Oh, and a new long-term care insurance program buried in the bill, whose premiums were among those items wrongly double-counted as deficit-reducing, faces “a very serious risk” of insolvency, according to the report.

Naturally, HHS Secretary Sebelius was quick to react to the devastating report:

“The Affordable Care Act will improve the health care system for all Americans, and we will continue our work to quickly and carefully implement the new law,” she said in a statement.

The full report is above, an AP summary is here.

Pass the bill to find out what’s in it.

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