health care

Study: Obama’s Health-Care Law Would Actually Add to the Deficit

US President Barack Obama takes a reporter's question during a press conference in the Brady Briefing Room of the White House in Washington, DC. AFP PHOTO/Mandel NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
Add it up. Photo: MANDEL NGAN/2012 AFP

Conservative policy analyst Charles Blahous, approved by President Obama in 2010 as the Republican trustee for Medicare and Social Security finances, will release a study on Tuesday that finds that Obama’s health-care law would increase the national deficit by $340 billion, not decrease it.

Does the health-care act worsen the deficit? The answer, I think, is clearly that it does,” Blahous, a senior research fellow at George Mason University’s Mercatus Center who served for the George W. Bush administration, told the Washington Post. “If one asserts that this law extends the solvency of Medicare, then one is affirming that this law adds to the deficit. Because the expansion of the Medicare trust fund and the creation of the new subsidies together create more spending than existed under prior law.”

Blahous’s study conflicts with the findings of the nonpartisan Congressional Budget Office, which has determined that the law would reduce the deficit. But Blahous said that the CBO’s report double counts elements of proposed Medicare savings and doesn’t “fully illuminate the financial impact of the health-care law.” A White House budget official said of Blahous’s to-be-released study, “Opponents of reform are using ‘new math’ while they attempt to refight the political battles of the past.”

According to the Associated Press, Blahous cites the following factors in his analysis:

The health care’s law deficit cushion has been reduced by more than $80 billion because of the administration’s decision not to move forward with a new long-term care insurance program that was part of the legislation. The Community Living Assistance Services and Supports program raised money in the short turn, but would have turned into a fiscal drain over the years.

The cost of health insurance subsidies for millions of low-income and middle-class uninsured people could turn out to be higher than forecast, particularly if employers scale back their own coverage.

Various cost control measures, including a tax on high-end insurance plans that doesn’t kick in until 2018, could deliver less than expected.

In the meantime, the Supreme Court is determining whether a part or the whole of the law passes constitutional muster.

Study: Obama’s Health-Care Law Would Actually Add to the Deficit