The CBO says the cost of health care reform will rise to $1.8 trillion, "increasing the price to far greater than the $900 billion" originally projected.
Robert Hurt on Monday, March 19th, 2012 in a statement.
Rep. Robert Hurt says $900 million health reform price tag has swelled to $1.8 trillion
U.S. Rep. Robert Hurt says Americans can’t afford the Patient Protection and Affordable Care Act.
Commonly called ObamaCare, the 2010 law that expands Medicare eligibility and requires all legal U.S. residents to have some form of health care insurance.
In a March 19 posting on his web site Hurt, R-5th, called the law "budget-busting." He cited a March 10 report from the Congressional Budget Office and reeled off potential problems with the reforms.
"Additionally, the report projected that the cost of this health care law will increase to nearly $1.8 trillion – increasing the price to far greater than the $900 billion than was projected when it was enacted – raising costs for American taxpayers at a time when we can least afford it," he wrote.
We wondered if the new CBO report really did project a 100 percent increase in the cost of health care reform.
When President Barack Obama proposed the health care legislation in September 2009, he said, "Now, add it all up, and the plan I'm proposing will cost around $900 billion over 10 years -- less than we have spent on the Iraq and Afghanistan wars, and less than the tax cuts for the wealthiest few Americans that Congress passed at the beginning of the previous administration."
In March 2010, the CBO calculated the gross cost at $938 billion for 2010 through 2019. But that figure did not take into account revenues the law would produce by imposing taxes on top earners, levies on high-cost insurance plans and penalties on individuals and employers who remain uninsured. The net cost of health care reform was projected at $788 billion for the decade.
It’s important to remember that the law phases in over the decade. From 2010 to 2013, the CBO projected the gross and net costs of the law at less than $10 billion a year.
The gross cost estimate swelled to $54 billion and the net to $49 billion for 2014, when major reforms begin, such as expanded eligibility for Medicaid and the Children’s Health Insurance Program, as well as subsidies for insurance exchanges. For 2019, the CBO estimated the gross cost at $214 billion and the net at $172 billion.
Now, let’s look at the CBO’s latest report. It provides updated figures but looks at different years than the first study.
The new gross cost is $1.762 trillion from 2012 to 2022, which Hurt accurately rounded up. The net cost is $1.252 trillion. But the total numbers are for an 11-year period, whereas the earlier report’s figures were for 10 years. And the new timespan, 2012 to 2022, adds three years at the end when reforms are fully implemented and removes two years at the beginning, when costs were minimal.
So has the CBO doubled its original projections on the cost of health care reform, as Hurt suggests? We compared the years both reports have in common -- 2012 through 2019 -- and came up with these results:
*The total gross cost in the first report was $931 billion, compared with $1.011 trillion in the second study. That’s an 8.6 percent increase.
*The total net cost in the first report was $777 billion, compared with $772 billion in the second study. That’s an 0.6 percent decrease.
Hurt said the CBO has estimated that the cost of health care reform will rise to $1.8 trillion, "increasing the price to far greater than the $900 billion projected" when the law was signed in 2010.
The Republican correctly rounded off numbers contained in two CBO reports, but then he made a misleading comparison between them. The first estimate covers a 10-year period -- from 2010 to 2019 -- including four early years when costs for the phased-in reform are minimal. The second projection covers an 11-year period -- from 2012 to 2022 -- that adds three years when the program is in full force and drops the first two low-cost years of the law. Hurt did not mention these key differences.
When you compare the years the reports have in common -- 2012 to 2019 -- gross-cost projections in the the latter study are 8.6 percent higher than in the initial work.
So there’s some truth in Hurt’s claim that estimates for the cost of health care reform have increased. But his statement implies he projections have doubled, and that’s plain wrong.
We rate Hurt’s statement Mostly False.