I’ve written extensively about how the most fiscally hazardous aspect of Obamacare is its creation of a new entitlement for subsidized private insurance, through the law’s state-based exchanges. If employers dump many of their workers onto the exchanges, as numerous independent analyses suggest is likely, taxpayers may need to spend as much as $200 billion a year extra on these exchange subsidies. Well, it turns out that the Obama Administration concurs that initial spending estimates are too low. The White House’s fiscal year 2013 budget adds $111 billion in exchange spending between 2014 and 2021, with even more spending to come in future years.
Below is a comparison of a section of Table 33-1, “Federal Programs by Agency and Account,” in the White House Office of Management and Budget’s fiscal year 2012 and 2013 budgets. (If you want to look it up yourself, go to the “refundable premium assistance tax credit” entry on pages 322 and 315 of the FY 2012 and FY 2013 budgets, respectively.) You can click on the table to enlarge it:
For the years in which the two exchange budgets overlap—2014 through 2021—the White House says that it anticipates to spend $111 billion more in its new budget than it projected a year ago. In 2021 alone, the difference between the two budgets is nearly $20 billion, implying that exchange spending will be up by over $200 billion in the decade following 2021.
And that’s if we’re lucky. If businesses do what the new health law clearly incentivizes them to do, exchange spending could be up by over $2 trillion in the decade following 2021.
It will be interesting to see if Obama budget officials can explain why their estimates are so different this day than they were a year ago, or if they will simply shrug their shoulders and say, “What’s $111 billion among friends?”
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Submited at Wednesday, February 29th, 2012 at 8:00 pm on Health by Alina
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