All fooling aside, the health law is expensive

Print Friendly and PDF By: Ronald Bachman Published: Jul 16, 2012
Ronald E. Bachman

 Ronald E. Bachman

Oh, the games people play, especially politicians.

Only political junkies really care about the difference between taxes and penalties contained in Obamacare. What Americans care about is “What is it going to cost me?”

Sure, the Republicans can holler that the president lied when saying that the health reform costs were not taxes. And the Democrats can stick with the falsehood that the now constitutionally defined taxes are still penalties.

The reality is that are no new costs in Obamacare. They have been there all along. But most Americans never knew.

As Nancy Pelosi famously said, “We will have to pass the bill for you to find out what is in it.” That is how they did it. Politicians violate Americans’ trust with the “Fooled Ya” game.

The “Fooled Ya” game is played by the unique Washington, D.C., rules of the Congressional Budget Office (CBO). Costs are estimated over a 10-year period. What happens after 10 years doesn’t count in this game.

Here is a Real Life vs. Washington, D.C. example of how the “Fooled Ya” game works:

If you have a 10-year contract to lease a car for $500 per month, what is the cost? Most would say $500 for 12 months
yields an annual cost of $6,000. Therefore, the cost of the contract over 10 years would be $60,000.

But what if your 10 years of payments for that contract were delayed by four years?

Under the “Fooled Ya” rules, your contract costs would be only $6,000 for six years, or $36,000. The last four years
of the contract are initially ignored as outside the calculation period.

Of course, in the real world, the actual cost of your contract is still $60,000. In the “Fooled Ya” game, the actual total costs are not disclosed until time passes and the added years are made a part of a new 10-year calculation period. That is, only after four years would the full $60,000 cost be recognized under “Fooled Ya” estimates.

That is the essence of the initial “Fooled Ya” Obamacare cost estimates. The original 10-year, $940 billion cost
estimate was made in 2010 for the period 2010-2019. The public was told health reform would cost less than $1 trillion.

But the act is not fully implemented until 2018. The actual ongoing 10-year costs will be more fully disclosed with each
passing year, until we get to full implementation in 2018. In 2012, the CBO cost was updated to be $1.8 trillion. By 2013, the cost will be about $2 trillion. By 2018, the full implementation’s 10-year costs will be closer to $2.5 trillion.

So when you read that the cost of Obamacare is increasing, the truth is those costs have always been there. The
true costs are becoming part of each new 10-year calculation. The previously unrecognized “Fooled Ya” costs are now being exposed.

Some supporters of Obamacare don’t care what the costs are. They believe that whatever the costs are, the benefits of universal coverage matter most.

The Supreme Court decision has provided a new opportunity for the general public to become aware of the real costs and the “Fooled Ya” game. The game now shifts from the Supreme Court to the Court of Public Opinion and the November election. Americans can now make their choice through an honest discussion, knowing the act’s taxes and future cost estimates.

It is time we and the politicians stopped fooling around with our kids’ future. You know the old saying, “Fool me once shame on you; fool me twice, shame on me.”

Don’t be fooled twice.

 

Ronald E. Bachman is president and CEO of Healthcare Visions, a firm dedicated to advancing ideas and policy initiatives that are transforming the U.S. health care market.  Bachman is also a Senior Fellow of the Georgia Public Policy Foundation (GPPF), the National Center for Policy Analysis (NCPA), and at the Wye River Group on Health. Mr. Bachman is an actuary with extensive experience in health care strategy for payers, providers and employers, and is a retired partner from PricewaterhouseCoopers.

 

Enjoy Georgia Health News? Sign up for free Email Alerts or follow us on Facebook or Twitter

Help support our nonprofit journalism -- your gift is tax deductible!

  • Russell Toal

    And the cost of not moving forward on health care reform? Mr. Bachman, like most partisan opponents, does not address the cost of the uninsured, the cost of doing nothing about the cost trends of Medicare, the previous cost trends of the private insurance market, the previous out of pocket costs of the elderly dependent on Part D, the costs to a family of not being to get or afford health insurance, the costs of inattention to quality and lack of coordination of care, etc. I could go on.

    The opponents of the Affordable Care Act have offered no meaningful alternatives other than a return to the old market based solutions that did not and will address the many serious problems that exist in the health insurance marketplace, the problems of affordability and the laws in the delivery system. The ACA indeed is not perfect, but it was and is a serious effort to address the many complex challenges in health care. Our time would be better spent addressing improvements that may be needed in both the ACA and the health delivery system.

  • Russell Toal

    My apologies for the error in leaving out a word: market based solutions that did not and will not address the serious problems that exist.

    My point, of course, is that doing nothing to reform the system, or repealing the ACA, would be much more costly to the nation than the concerns cited in Mr. Bachman’s lament.

  • Pingback: Viewpoints: Calif. could take a lesson from Wis. reforms; Republican advocates a 'nixon to China' embrace of Medicare for all

  • Joshua Reynolds

    Wow…I’m surprised Ronald Bachman is willing to call Republican and Democratic politicians liars when he himself is misrepresenting (read: lying about) the costs of Obamacare.

    The updated cost estimates he cites from the CBO refer to “gross federal spending” and do not include savings from expense reductions and new revenue. In reality (where so few of us are left), the net cost estimates from CBO went down in 2011, then down again in 2012.

    That means Obamacare is on track to save (opposite of spend) $210 billion from 2010-2019 and another $1.2 trillion from 2020-2029. To me, that sounds like a good deal and it looks like Ronald Bachman is trying to pass off a “fooled ya” editorial.

Sponsorships















University of Georgia College of Public Health Logo









(Click on the logo for more information about our sponsors.)





Foundation Support for GHN:

Healthcare Georgia Foundation
Kaiser Permanente
Reynolds Charitable Fund
Georgia Health Foundation