AHEC has had an article published in A Line of Sight's January, 2011 newsletter.  The article details how ObamaCare hands the bill for the cost of reform to the states.  An excerpt from the article states:

"A survey of the available of information about the impact of ObamaCare’s Medicaid expansion and its impact on the states reveals a bleak budget forecast for the next decade.

• Florida:  Florida’s Agency for Health Care Administration predicts that ObamaCare will cause the state to experience a $1.1 billion increase in Medicaid expenses in 2017 alone.

• Indiana:  Indiana estimates that the between 388,000 and 522,000 new enrollees will apply for benefits under the state’s Medicaid program with almost half of these enrollees (248,000) moving over to Medicaid after dropping out of their prior (mostly private sector insurance) to receive taxpayer-funded healthcare.  Providing this expanded coverage will cost an additional $2.59 billion to $3.11 billion over a 7-year period.

• Mississippi:  Milliman, Inc., which performed an outside analysis for the State of Mississippi on the costs for the expanded Medicaid program, estimates that Mississippi will add between 206,000 and 415,000 people to its Medicaid rolls due to ObamaCare.  The cost of this expansion will be more than $2.59 billion over 10 years. 

• Nebraska: ObamaCare will cause nearly 20% of all Nebraskans to be covered by Medicaid.

• Nevada:  The cost for Nevada’s Medicaid program is expected to increase by nearly 50% by 2020 because of ObamaCare. 

• Ohio: According to a new study  from the Buckeye Institute, Medicaid expansion under ObamaCare will bankrupt the state in the next decade.  A family of four in Ohio currently pays nearly $2,000 in taxes each year to finance the state's Medicaid program.  The new healthcare law dramatically increases that burden for Ohio taxpayers.

• Texas: In Texas, the state government has concluded that ObamaCare could add up to an additional 2,000,000 new people to the Texas Medicaid program, which would cost state taxpayers nearly $27 billion over the coming decade.  In light of these startling facts, Texas Governor Rick Perry (R) is currently investigating the possibility of withdrawing his state from the federal Medicaid program, and instead putting in place a more efficient program that Texas would administer and oversee.

• Washington:  According to the Washington Policy Center, the State of Washington is faced with a decision to either opt out of Medicaid or eliminate its state-based healthcare programs for low-income residents.

• Wyoming: This Medicaid expansion even threatens Wyoming, which is one of the most fiscally responsible states in the United States. The state recently conducted a study on the burden of expanding Medicaid, which concluded that Wyoming will have to consider dropping out of Medicaid.  Wyoming is in a particularly vulnerable position because ObamaCare provides for even more Medicaid funding for “frontier states” (including Wyoming).  This funding declines precipitously after 5 years, leaving the frontier states to shoulder all of the new costs associated with the ObamaCare programs that are being implemented in the state." 

The full text of the article can be found here.

Cost was the nearly universal trope in the Democrats' opposition to H.R. 2 in the House debate this afternoon. More specifically, it seemed that almost every Democrat used at least a portion of their 1-2 minute time allotment to argue that the passage of the repeal bill would enormously increase the national deficit. Underpinning these assertions was the now notorious CBO report that said over the next decade the repeal of ObamaCare would balloon the deficit $230 billion. But a timely Wall Street Journal article explains why the Democrats should tread more lightly with the CBO "data" as it actually proves the Republicans' case for repeal.

The authors remind us first thing that the cause of our current federal deficit crisis is our country's entitlement culture particularly as it concerns health care. The Democrats' much-loved talking point about the universal access to health insurance provided by ObamaCare all too often pushes aside the nearly $1 trillion cost (until 2020) associated with this expansion. To "pay" for this and essentially break-even, the article points out the following "budget gimmicks, deceptive accounting, and implausible assumptions used to create the false impression of fiscal discipline":

• $1 trillion cost projection is an underestimate that includes only 6 rather than 10 years of subsidies; $2.4 trillion is a more accurate cost projection for the first decade.
• The Community Living Assistance Services and Supports Act (CLASS) built into ObamaCare will not generate the $70 billion expected. Rather than serve as a reserve fund for the first decade, the authors predict the long-term care entitlement program will be accessed immediately to pay for sick enrollees while non-sick enrollees pay the premiums.
• Spending cuts to Medicare in ObamaCare are not real and based upon a flawed premise that Medicare payments to doctors can fall below payments from Medicaid.
• ObamaCare's nonimpact on the deficit depends on $410 billion tax increase over the next decade on new Medicare and Cadillac health insurance plans. 
• CBO assumes that in 2019 only 19 million Americans will receive insurance through the health care exchanges, when in fact most workers will be better off foregoing employer health care coverage, taking cash instead of the benefits, and using ObamaCare's entitlement package for their health care.

In their concluding remarks, the authors nicely put everything into perspective: 

 "The history of federal entitlements is one of inexorable growth. Once erected, more and more people get added to the programs. The ACA [ObamaCare] will be no different. Spending will soar, and the tax hikes and spending 'offsets' that were cobbled together to get the bill passed will either wither away or vanish altogether."

In tomorrow's debate and then again when the repeal bill enters the Senate, the CBO study along with claims of ObamaCare's net deficit neutrality will undoubtedly be referenced again and again. When this happens, keep these facts, figures, and budget tricks in mind.       

Supporters of ObamaCare claim the law will reduce the deficit.  A recent article from National Review Online and an opinion piece from Politico debunk the myth of deficit reduction.  As the Politico piece states: "...the supposed deficit reduction over the next decade is built on standard budgetary smoke and mirrors."  

The Politico piece, written by James Capretta and Douglas Holtz-Eakin, the former Congressional Budget Office (CBO) director, states: "It takes a special kind of audacity for ObamaCare's apologists to continue to insist that the new law will cut the projected budget deficits.  Evidence clearly shows otherwise."

As National Review Online states: "Government agencies nearly always overestimate the revenue generated from tax increases, and nearly always underestimate the new spending caused by new entitlements.  Americans are a lot smarter than they look from inside the Beltway, and they modify their behavior to avoid new taxes and obtain new largesse.  Federal bureaucrats may be good with calculators, but they're weak on human nature."  

By way of background, the deficit reduction claims trace their origins back to the "scoring" or budgetary analysis of the law by CBO.  How could CBO conclude the law reduces the deficit?  CBO scores legislation by looking at what the law says.  So if Congress says in a bill, "savings will come later," CBO assumes that to be true - no matter how unlikely that statement is. For example, as the Politico piece points out, ObamaCare fails to truthfully deal with the $300 billion physician payment issue. Each year, Congress has to pass a costly law to prevent deep cuts to doctors who treat Medicare patients (failing to do so would likely cause doctors to drop out of Medicare).  Not only does ObamaCare fail to deal with this issue, but it also assumes similar cuts to Medicare for hospitals and other services to "pay for" the new entitlement spending under ObamaCare.  So, for its part, CBO has to assume these cuts will occur, even when there is zero chance of that actually occurring.  

CBO also tries to calculate how people will react to the law, and CBO's assumptions in the case of ObamaCare are unlikely. CBO forecasts that only 19 million out of the potential 111 million people eligible for premium assistance insurance subsidies will get them in 2019.  In fact, Holtz-Eaken and Capretta point out that the cost for ObamaCare's premium assistance would rise by nearly $1 trillion (from $450 billion to $1.4 trillion) from 2014 to 2019 under a more reasonable (more likely) set of assumptions.  

The Congressional Research Service (CRS) released a report last month detailing the large amount of money contained in ObamaCare to fund implementation over the next ten years.  To those who read ObamaCare before it passed none of these individual spending provisions should come as a surprise.  The noteworthy aspect of the CRS document is that it aggregates these spending provisions, putting them into a concise document which details a vast amount of spending.

This is another problem with ObamaCare, it puts nearly $100 billion of spending to implement ObamaCare on autopilot and makes the job of Congress to conduct oversight regarding implementation harder.  Now that spending is already in motion, it will be harder for Congress to cut spending or withhold spending to gain leverage over the leviathan that is HHS.

AHEC has compiled a brief list of the amount and description of the Appropriations (the page numbers correlate to the hyperlink for ObamaCare contained above):

Section 1002 (page 139) – Consumer Assistance (Grants)
First FY, $30,000,000
Subsequent years, such sums as may be necessary

Section 1003 (page 140) – Federal Takeover of Premium Reviews (Grants)
$250,000,000

Section 1005 (HCERA) – Reform Fund
$1,000,000,000

Section 1101 (page 143) – Administrative Costs of High Risk Pools
$5,000,000,000

Section 1102 (Page 145) – Coverage for Early Retirees
$5,000,000,000

Section 1311 (page 173) – Health Benefits Plans
Blank Check – “amount necessary” to carry out this section

Section 1322 (page 188) – Grants to Create Non-Profit Insurers
$6,000,000,000

Section 1323 (page 195) – Community Health Insurance Option
Such sums as requested by the Secretary
$1,000,000,000

Section 2405 (page 305) – Expansion of A/D Resource Centers
$50,000,000 ($10,000,000 x 5FY)

Section 2701 (page 318) – Adult Health Quality Measures
$300,000,000 ($60,000,000 x 5FY)

Section 2707 (page 327) – Medicaid Psychiatric Demonstration Project
$75,000,000

Section 2801 (page 328) - MACPAC
$11,000,000

Section 2951 (page 343) – Home Visiting Programs
$1,500,000,000

Section 2953 (page 352) – Personal Responsibility Education
$375,000,000 ($75,000,000 x 5)

Section 2954 (page 352) - Education
$250,000,000

Section 3013 (page 384) – Quality Measure Development
$375,000,000 ($75,000,000 x 5)

Section 3014 (page 387) – Quality Measurement
Up to $100,000,000

Section 3021 (page 394) – CMS Innovation
$5,000,000
$10,000,000,000

Section 3024 (page 408) – Demonstration Project
$30,000,000

Section 3026 (page 415) – Transition Program
$500,000,000

Section 3027 (page ____) – Demonstration Project
$1,600,000

Section 3306 (page 470) – Assistance for Low-Income Programs
$300,000,000

Section 3403 (page 506) – Board
$150,000,000 ($15M adjusted annually for inflation)

Section 4002 (page 541) – Prevention Fund
$5,000,000,000

Section 4101 (page 547) – School Based Health Centers
$200,000,000 ($50M x 5)

Section 4108 (page 564) – Incentives to Prevent Chronic Diseases n Medicaid
$100,000,000

Section 4202 (page 570) – Wellness
$50,000,000 transfer

Section 4204 (page 473) – Immunization
$1,000,000

Section 4306 (page 587) – Child Obesity Programs
$125,000,000

Section 5210 (page 615) – Ready Reserve Corps
$100,000,000

Section 5507 (page 668) – Demonstration Projects
$425,000,000 ($85M x 5)
$15,000,000

Section 5508 (page 672) – Teaching Capacity
$230,000,000

Section 5509 (page 675) – Grad Nurse Program
$200,000,000

Section 6201 (page 727) – Background Checks
$160,000,000

Section 6301 (page 728) – Research
(1) Amounts in a fund
(2) $1.26B + trust fund sources (see formula)
(3) Fund based appropriations

Section 6402 (page 761) – Program Integrity
$350,000,000

Section 8001 (page 842) – Class Act
Up to amount collected in a trust fund

Section 9023 (page 883) – Therapeutic Discovery Project
Such sums

Section 10203 (page 931) – Enrollment Prgrams
$40,570,000,000

Secs. 10211-10214 (page 931) – Pregnancy Assistance grants
$250,000,000

Section 10323 (page 959) – Medicare for Hazardous Exposure
$215,000,000

Section 10502 (page 1003) - Facility Construction
$100,000,000

Section 10503 (page 1004) – Community Health Center Fund
$1,500,000,000
$1,500,000,000

Legislative Resources: ObamaCare Bill Text

The new law known as ObamaCare is comprised of two different bills that passed Congress:

(1)           H.R. 3590 – The “Patient Protection and Affordable Care Act” which became Public Law 111-148 when it was signed into law on March 23, 2010; and

(2)           H.R.  4872 – The Healthcare and Education Reconciliation Act of 2010, which became Public Law 111-152 when it was signed into law on March 30, 2010.

Congressional Budget Office & Joint Tax Committee Resources

The Congressional Budget Office (CBO) March 20, 2010 letter on H.R. 4872 & H.R. 3590 includes a detailed cost estimate of the new law.  Other CBO cost estimates can be found here.

The Joint Committee on Taxation (JTC) analyses regarding the new health care law including the following (each link below will download the document):

(1)           Technical Explanation Of The Revenue Provisions Of The “Reconciliation Act Of 2010,” As Amended, In Combination With The “Patient Protection And Affordable Care Act.” JCX-18-10 (March 21, 2010).

(2)           Estimated Revenue Effects Of The Amendment In The Nature Of A Substitute To H.R. 4872, The "Reconciliation Act Of 2010," As Amended, In Combination With The Revenue Effects Of H.R. 3590, The "Patient Protection And Affordable Care Act ('PPACA')," As Passed By The Senate, And Scheduled For Consideration By The House Committee On Rules On March 20, 2010.  JCX-17-10 (March 20, 2010).

(3)           Estimated Revenue Effects Of The Amendment In The Nature Of A Substitute To H.R. 4872, The “Reconciliation Act Of 2010,” In Combination With The Revenue Effects Of H.R. 3590, The “Patient Protection And Affordable Care Act (‘PPACA’),” As Passed By The Senate.  JCX-16-10 (March 18, 2010).

(4)           Estimated Revenue Effects Of The Manager’s Amendment To The Revenue Provisions Contained In The “Patient Protection And Affordable Care Act,” As Passed By The Senate On December 24, 2009.  JCX-10-10 (March 11, 2010).

(5)           Estimated Revenue Effects Of The Manager’s Amendment To The Revenue Provisions Contained In The “Patient Protection And Affordable Care Act.” JCX-61-09 (December 19, 2009).

It turns out that ObamaCare will increase the cost of prescription name-brand drugs.  

On November 10, 2010, Rep. Paul Ryan received a letter from the Congressional Budget Office in response to his inquiry about the impact of ObamaCare's taxes on name-brand prescription drugs.

The letter concludes what conservatives have warned all along: taxing pharmaceutical companies and innovative drug companies will have the impact of driving up costs.  Furthermore, this letter details how seniors on Medicare will pick up some of the tab for these price increases.

According to this CBO analysis (see Table 4) issued at the time of the final House vote on the bill, the new law will cause approximately 3 million non-elderly people to lose their employer sponsored health care by 2016 (the third year the law’s subsidies take effect) and another 5 million people would drop their individual health insurance plans by 2016.  Accordingly, 8 million people will lose and/or drop their current, private coverage as a result of ObamaCare.

At the same time, CBO estimates that the law will add 16 million more non-elderly people to the Medicaid and CHIP roles by 2019.  Accordingly, fully 50% of the 32 million that CBO estimates will no longer be uninsured as a result of the law will become fully dependent on government health care instead of enrolling in a market-based, private insurance plan.

Rather than incentivize more people to gain private insurance, ObamaCare incentivizes government dependence – at a significant cost to the taxpayers.  But this is not just a cost that will be born by the federal government – given that CHIP and Medicaid are also funded by the states this aspect of ObamaCare will also place a greater burden on state budgets as well.