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Says "new estimates from the Congressional Budget Office conclude the final price-tag" for the health care law "will exceed $2 trillion — more than double what was initially reported."

Frank LoBiondo on Monday, March 19th, 2012 in a letter to the editor

Frank LoBiondo says health care reform law will cost more than twice the original estimate

The court of public opinion has already struck down the health care law, according to one Republican.

Now, U.S. Rep. Frank LoBiondo said, it’s the U.S. Supreme Court’s turn.

The southern New Jersey congressman said in a letter to The News of Cumberland County that health care reform passed without bipartisan consensus. And, he said, although the tentacles of "ObamaCare" are not yet fully extended, the cost of the law is already increasing.

"Many of the tax increases and penalties have yet to take effect while new estimates from the Congressional Budget Office conclude the final price-tag will exceed $2 trillion — more than double what was initially reported," LoBiondo wrote in the letter published online a week before the Supreme Court started hearing arguments over provisions in the law.

PolitiFact New Jersey found two problems with LoBiondo’s statement: it relies on a misleading comparison and the "final price-tag" is marked up.

So how much will the law cost?

LoBiondo was referring to gross, rather than net, costs. The gross cost --  the cost without accounting for additional revenues the government will collect from the law  -- was estimated at $938 billion by the nonpartisan Congressional Budget Office, or CBO, two years ago. That estimate includes costs from 2010 to 2019.

In a recent report, the congressional agency updated its estimate to $1.762 trillion for 2012 to 2022.

The updated figure doesn’t "exceed $2 trillion." LoBiondo spokesman Jason Galanes cited other estimates the CBO released to back up the point. In those estimates, the agency tests how the costs would change in scenarios that differ from the agency’s expectation that there will be a small reduction in employment-based health insurance.

Galanes said in an e-mail that "LoBiondo believes it is reasonable to project that the law could in fact reach or exceed $2 trillion in costs as three of the four scenarios considered by CBO suggest."

But under the congressional agency’s current assumptions, the projected gross cost is $1.762 trillion. And that’s not "more than double what was initially reported." To reach that conclusion, the congressman made a misleading comparison.

The congressional agency’s original estimate of $938 billion included 10 years of data, from 2010 to 2019. In its latest estimate, the CBO projects the gross cost of the law over 11 years, from 2012 to 2022, for a total of $1.762 trillion.

So, the figures include a different number of years. Also, the latest estimate represents nine years when the law is fully implemented and,  therefore, costs more. The earlier estimate included several years when the law was not fully implemented and so costs were lower.

When the gross costs from 2012 to 2019 -- the years included in both reports -- are compared, the difference is significantly less than double.  It’s an increase of 8.6 percent, from $931 billion to $1.01 trillion.

The difference in the net cost estimate over the same time frame further erodes LoBiondo’s point. It has decreased slightly from the earlier estimate.

Two years ago, the CBO projected the health care law would have a net cost  of $777 billion from 2012 to 2019. Now, that estimate is $772 billion.  

Our ruling

LoBiondo said "new estimates from the Congressional Budget Office conclude the final price-tag" for the health care law "will exceed $2 trillion — more than double what was initially reported."

CBO recently projected the gross cost of insurance coverage provisions in the law at $1.762 trillion from 2012 to 2022. In 2010, the agency estimated the gross cost at $938 billion from 2010 to 2019.

It’s misleading to compare those two figures since they represent different years. When comparing the years included in both estimates -- 2012 to 2019 -- it’s clear the cost did not double. It increased by 8.6 percent. And during the same time, the net cost of the law decreased.

We rate this claim False.

To comment on this ruling, go to NJ.com.

About this statement:

Published: Sunday, April 1st, 2012 at 7:30 a.m.

Subjects: Health Care


NJ.com, Health care law fails the test, March 19, 2012

Congressional Budget Office, "Updated Estimates for the Insurance Coverage Provisions of the Affordable Care Act," March 2012

Congressional Budget Office, CBO’s Analysis of the Major Health Care Legislation
Enacted in March 2010, March 30, 2011

Congressional Budget Office, "Selected CBO Publications Related to Health Care Legislation, 2009–2010," December 2010

Congressional Budget Office, The Effects of the Affordable Care Act on Employment-Based Health Insurance, March 15, 2012

E-mail interview with Jason Galanes, spokesman for U.S. Rep. Frank LoBiondo, March 27, 2012

Factcheck.org, "Health Care Costs Didn’t Double," March 16, 2012

PolitiFact, Rep. Robert Hurt says $900 million health reform price tag has swelled to $1.8 trillion, March 26, 2012

Written by: Erin O'Neill
Researched by: Erin O'Neill
Edited by: Caryn Shinske

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