Finally, a Republican has gotten a boost from the CBO. A bipartisan Senate plan to try to stabilize Affordable Care Act marketplaces would lower the federal deficit by nearly $3.8 billion during the next decade and would not affect the number of people with health insurance, Congress’s official budget scorekeepers said Wednesday. This bill does what the CBO predicted Congress would eventually need to do so the costs were built in to existing budget estimates.
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A bipartisan Senate proposal to stabilize health insurance markets and continue paying subsidies to insurance companies would produce a modest reduction in federal budget deficits but would not substantially change the number of people with coverage, the Congressional Budget Office said on Wednesday.
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The federal share of national health spending grew by about one-eighth between 2008 and 2016 and by the year 2025 is projected to have increased by nearly one-fifth. By 2025, federal, state and local taxpayers will be financing fully two-thirds of American health care . Some might say “not bad for government work.”
Careful readers might also note that the state and local government share of national health spending shrank slightly during the same period–a reflection of President Obama’s vision to give Uncle Sam a bigger role in health care, displacing decisions formerly made by stat and local governments and the private sector in the process.
The CBO has refused to adjust its computations to the ever-more-apparent failings of the Affordable Care Act. When the CBO says that 23 million fewer people will have insurance coverage under the AHCA than under the ACA—a statistic that politics have converted into a mantra—that figure is predicated on fictional ACA participation. The CBO assumes 18 million people will be enrolled in ACA exchanges in 2018 and that enrollment will continue to grow until 2026. No one on any side of the political spectrum believes this to be true.
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The Trump budget assumes Obamacare repeal. On the tax side of this, it particularly assumes repeal of the 3.8% point surtax on capital gains, dividends, and other savings (known as the “net investment income tax,” or NIIT). There are approximately 20 other new or higher taxes in Obamacare that also will be repealed. Tax reform assumes they are gone before starting on a new system.
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The Congressional Budget Office released its latest Obamacare-related estimates
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CBO claims that the House repeal and replace bill could degrade the quality of insurance. This editorializing could use some scrutiny. Without government supervision of insurance minutiae and a mandate to buy coverage or pay a penalty, CBO asserts that “a few million” people will turn to insurance that falls short of the “widely accepted definition” of “a comprehensive major medical policy.” Under the House reform, Americans won’t have any problem insuring against a bad health event, even if CBO won’t admit it. The House bill is designed is create more alternatives that can accommodate the diverse needs and preferences of a nation of some 320 million people. CBO has become a fear factory because it prefers having government decide for everybody.
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The political world waited with rapt attention Wednesday for the oracles at the Congressional Budget Office to release their cost-and-coverage predictions for the revised House health reform bill. CBO confirmed that the American Health Care Act (AHCA) is a major fiscal dividend, cutting taxes by $992 billion, spending by $1.1 trillion, and the deficit by $119 billion over 10 years. However, CBO says 14 million fewer people on net would be insured in 2018 relative to the ObamaCare status quo, rising to 23 million in 2026. The problem with this educated guess about enrollment is that CBO’s models put too much confidence in the effectiveness of central planning. CBO’s projections about ObamaCare enrollment are consistently too high and discredited by reality year after year.
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President Trump has proposed a budget that increases government spending from $4 trillion today to $5.5 trillion in 2027. Only in the alternative reality of Washington can this be described as “budget cuts.” Looking at individual programs, it is a gross mischaracterization to state that spending on Medicaid programs will be cut. The new budget proposes to increase federal Medicaid spending from $378 billion a year today to $524 billion a year in 2027. It shows how far removed Washington is from everyday Americans for this increase of $146 billion to be called a cut. The fundamental problem is that special interests are addicted to the rising path of spending. Altering this path by increasing spending at a slower rate opens change-makers to extraordinary attacks.
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Obamacare is collapsing. Its utter failures become more obvious by the day. We all remember the promises of Obamacare, chief among them that the “Affordable Care Act” would lower health care costs. The opposite has occurred. Despite the offer of subsidies through the exchanges, enrollment in Obamacare has been dismal. Younger, healthier individuals have little interest in paying exorbitant premiums for insurance plans that come with $5,000 deductibles. The result has been an unbalanced insurance pool where insurers must charge ever-increasing premiums to continue offering coverage.
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