Heartland Institute Experts React to Tuesday’s CBO Score of Obamacare

July 24, 2012

The nonpartisan Congressional Budget Office today scored the Patient Protection and Affordable Care Act, also known as Obamacare, in light of the recent U.S. Supreme Court decision upholding the law. The CBO said scoring changes it made based on that decision mean Obamacare will cost $1.168 trillion from 2012 to 2022, $84 billion less than the CBO’s original score for PPACA.

The following statements from health care and budget policy experts at The Heartland Institute – a free-market think tank – may be used for attribution. For more comments, refer to the contact information below. To book a Heartland guest on your program, please contact Tammy Nash at tnash@heartland.org and 312/377-4000. After regular business hours, contact Jim Lakely at jlakely@heartland.org and 312/731-9364.

To review a trove of research, news, and commentary on Obamacare from a variety of free-market think tanks, visit PolicyBot.org.

“The Congressional Budget Office calculations are irritatingly inaccurate but ultimately irrelevant. The CBO dramatically underestimates the woodwork effect, assuming only a small portion of those already eligible for Medicaid will sign up under the expansion of the program, and makes numerous other grand leaps of logic. But thanks to the smaller score regarding these fanciful deficit savings under President Obama’s law, their calculations actually render repeal easier under the reconciliation process should a majority of those opposed to this disastrous law take the U.S. Senate. Let’s hope we never have the opportunity to see how wrong CBO is.”

Benjamin Domenech
Research Fellow, The Heartland Institute
Managing Editor, Health Care News

“The Congressional Budget Office is telling us Obamacare will be a slightly smaller failure than we thought. This is hardly reason to celebrate even if we accept CBO numbers, which often are dubious. The government could have expanded health insurance coverage by giving poor households vouchers to buy insurance. If the federal government can find money for ethanol subsidies, undeclared and unwinnable wars, bailouts of major banks and the United Auto Workers, foreign aid to repressive regimes, and electronic surveillance and storage of every phone call, email, Tweet, and Facebook message, it could have found money to do that.”

Steve Stanek
Research Fellow, Budget and Tax Policy
The Heartland Institute
Managing Editor
Budget & Tax News

“Dollar estimates of the cost of the Affordable Care Act miss the real impact of the law. Over and above the massive direct costs are the indirect costs. A recent survey found 83 percent of doctors are considering quitting medicine due to government interference. What type of person wants to practice medicine when most of his or her time is spent filling out forms, following government mandates, and complying with regulations? The true cost of a law that significantly reduces the number and quality of health care providers is incalculable.”

Robert Genetski
Policy Advisor, Budget and Tax Policy
The Heartland Institute

“It’s impossible for anyone to predict what Obamacare will cost right now, in part due to legal uncertainties. As even the Congressional Budget Office concedes, it’s not known how many states will opt out of the law’s Medicaid expansion. The CBO’s assumption, that about a third of the states will do so, is just a wild guess.

“Even more uncertain is the cost of the subsidies available to those who purchase insurance policies through exchanges. As many as 30 states may not set them up, so the federal government will be forced to step in to do it, resulting in additional federal spending. Moreover, as Michael Cannon of the Cato Institute observes, the law states subsidies are not available to those who buy insurance through a federally established exchange. This could reduce federal spending, but the Obama administration’s IRS is rewriting the law, a move likely to bring a legal challenge.

“The Supreme Court ruling clarified nothing and complicated everything about Obamacare. The CBO ruling is an election-year scam designed to give Obama cover on the most controversial and hated initiative of his presidency.”

Maureen Martin
Senior Fellow for Legal Affairs
The Heartland Institute

“The Congressional Budget Office is trapped by its forecasting models. Since Obamacare is now supported as a ‘tax,’ repealing this tax will ‘increase the deficit.’ Never mind that the forecasts are more commonly wrong than correct.

“If several states refuse to expand Medicaid, it will ‘save money’ for the federal government. If Medicaid were simply repealed entirely, it would save a whole lot of money, too. It is probably useful to have an agency like the CBO make forecasts, but more importantly congressmen and the media should be aware of how truly bad and inaccurate the forecasting business is. Look at CBO forecasts from previous years. It’s not a record to be proud of.”

Joe Cobb
Policy Advisor, Economics
The Heartland Institute

“This re-estimate is as ridiculous as the Congressional Budget Office’s original estimate. A year ago CBO claimed increasing spending by more than a trillion dollars over ten years would reduce the deficit by $210 billion. If that were possible, we’d be luxuriating in budget surpluses now, given all the new spending that has been created during the Obama administration.”

S.T. Karnick
Director of Research
The Heartland Institute

“I don’t think the Congressional Budget Office seeks to advance a partisan agenda. And just because someone donates to one party or the other doesn’t automatically mean her work is biased. But I do think that many of the CBO’s key assumptions tend to favor government over market reforms. The CBO’s health care projections are predominantly influenced by the work of one economist: MIT’s Jonathan Gruber, who happens to have been a key architect of Obamacare.

“Ideally, the CBO would publish its economic models, so that independent economists could road-test their assumptions. But the CBO refuses to allow it. It’s not clear to me why the CBO is afraid of transparency. Shielding its models from the public invites accusations of partisan bias. The CBO’s projections have such a huge impact on Congressional legislation that the public interest in scrutinizing CBO’s methodology far outweighs any countervailing concerns.”

Avik Roy
Policy Advisor, Health Care
The Heartland Institute

The Heartland Institute is a 28-year-old national nonprofit organization headquartered in Chicago, Illinois. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site or call 312/377-4000.