CBO missed ObamaCare cost by $1 trillion?
posted at 10:45 am on August 8, 2009 by Ed Morrissey
The Congressional Budget Office has done a good job of sticking to its independent analysis, even in the face of unprecedented attempts to intimidate director Douglas Elmendorf into backing away from his positions on the deficit damage ObamaCare will do. However, Dr. Stephen Parente of Minnesota’s Carlson School of Management says that the CBO used outdated models to determine short- and long-term costs of Barack Obama’s health care reform package. Newer and more applicable models that the CBO declined to use show that the actual cost will be more than double the CBO estimates (via Newsbeat1):
The CBO is actually being kind to the would-be reformers. Its analysis likely understates—by at least $1 trillion—the true costs of expanding health coverage as current Democratic legislation contemplates. Over the last few months, my colleagues and I at the consulting firm Health Systems Innovations have provided cost estimates of health-care reform to both Republican and Democratic members of Congress, and we’ve posted these estimates on our website as well. We believe that the Democratic bills currently under consideration in the House and Senate would cost $2.1 trillion and $2.4 trillion, respectively—much higher than CBO’s figures. …
Why the difference in these estimates? We believe that we have better data on this issue than the CBO, which uses simulation models of health-insurance plans based on much older health-plan data—typically from 2001 or even 2000. Our estimates are grounded in 2006 commercial-insurance data to which the CBO doesn’t have access (the data are not publicly available and the CBO didn’t make provisions to purchase them). These data reflect the advent of much cheaper, high-deductible health plans and limited-provider network plans. If the government modeled its public option on these inexpensive plans, the result would be cheap enough to lure far more people away from private health insurance than the CBO estimates.
Our model has a good track record. The last time government introduced a major health-insurance innovation was 2004, which saw the introduction of Health Savings Accounts. We used the same model to predict that 3 million people would adopt these HSAs by the beginning of 2006. Our estimate, which we published in the peer-reviewed journal Health Affairs, was spot-on, predicting the market response more accurately than most other models, which produced adoption-rate estimates at least one-third lower.
The higher rate of adoption will mean higher payouts from the government as people dump private insurance, especially employers who want to rid themselves of the direct costs of providing health insurance. That places a much higher burden on the government, which amplifies the effect on the deficit and the need for taxation. After all, the tax income in the CBO chart below isn’t indexed to enrollment, and the revenue remains fairly constant regardless of how many people wind up in the plan:
Perhaps someone can suggest to Elmendorf that the CBO should pay to get the data and check its models once again.
Blowback
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Speaking of HSAs, what happens to them in Obamaland?
Ronnie on August 8, 2009 at 10:48 AM
Is anyone here surprised?
Vashta.Nerada on August 8, 2009 at 10:50 AM
This fiasco is about to reach critical mass . . . everybody get under your desks.
rplat on August 8, 2009 at 10:50 AM
They are fudging and spinning all the economic data points the government puts out. Look at yesterday’s BLS employment report.
elduende on August 8, 2009 at 10:51 AM
I am, the number has got to be larger than that.
Tommy_G on August 8, 2009 at 10:51 AM
“Numbers never fed a starving child” – Obama… or was that Bill Clinton?
Skywise on August 8, 2009 at 10:51 AM
But!But!But! When we see the 5.1% growth????????
Everthing the Fed’s project usualy turns out to be Bull Shit!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Rick007 on August 8, 2009 at 10:53 AM
l
Sporty1946 on August 8, 2009 at 10:55 AM
Anyone suprise by this? No.
Dritanian on August 8, 2009 at 10:56 AM
The price tag for crap like this is always worse than we thought. There is a freaking pattern here.
jimmy2shoes on August 8, 2009 at 10:57 AM
My head is going to explode!
ladyingray on August 8, 2009 at 10:57 AM
This man needs to shut up and get out of the way.
/s
MarkABinVA on August 8, 2009 at 10:57 AM
hate speech!
rob verdi on August 8, 2009 at 10:57 AM
A Trillion here………
………. a Trillion there.
Pretty soon we are going to be talking about real money…….
Seven Percent Solution on August 8, 2009 at 10:59 AM
This is all insurance paid propaganda. The protesters are fakes, the opposition inflated, and I’m Peter Pan.
Ironic isn’t it? For forty years – if not longer – liberals have been scaring senior citizens and others that the Republicans were going to take away their SS or Medicare/Medicaid.
And it worked.
Now, those same seasoned citizens (broadly speaking) are turning on their creators.
SteveMG on August 8, 2009 at 10:59 AM
Geithner “The US Debt ceiling it too low at 12 trillion dollars Congress needs to raise it
William Amos on August 8, 2009 at 10:59 AM
Do they factor in the loss of tax revenue from the collapse of the insurance industry?
Skandia Recluse on August 8, 2009 at 11:03 AM
Facts are stubborn things, but statistics are more pliable.
Mark Twain
Uniblogger on August 8, 2009 at 11:03 AM
One serious problem in this non-debate debate is that there is not one single ‘plan’ out there. I think that is “on purpose” by the way insofar as it allows the Administration to, er, posit its “intentions” but not the details. But this blog post indicates that HSA’s would likely die in the current proposals.
clorensen on August 8, 2009 at 11:04 AM
I cease to be surprised.
More cost, more dead, less care—what a plan
ted c on August 8, 2009 at 11:05 AM
These sort of numbers? I refuse to believe it is merely a minor accounting oversight? This is intentional.
coldwarrior on August 8, 2009 at 11:08 AM
This is where Beck and Limbaugh, I think, are wrong.
The danger with the expansion of government into all of these areas of our lives is not just that the powers will be abused or misused. It will be that the system will simply collapse. Or be unresponsive.
Hannah Arendt once pointed out that “Democracy is rule by the many; oligarchy is rule by the few; and bureaucracy is rule by no one.”
The massive bureaucracies, the layers of laws and regulations and rules is stifling. To be sure, the potential is there for abuse. But the real danger of abuse comes not from a man on horseback or a dictator but from the bureaucrats.
Think of California times 100.
SteveMG on August 8, 2009 at 11:09 AM
The member of the European Parliament Daniel Hannan informed Fox News watchers (on Glenn Beck yesterday) that the British Health Care System is the third largest employer IN THE WORLD! (Only the Chinese army and the Indian Rail system are larger.) If that’s the case, can you imagine how big the U.S. Nationalized Health Care System is going to be??? And like he said, once you’ve got it, you never get rid of it.
Christian Conservative on August 8, 2009 at 11:10 AM
Obama is spinning faster than an Iranian centrifuge
faraway on August 8, 2009 at 11:10 AM
The lies and deceptions by Obama and his thugs
are now part of the CBO’s operating procedures. When an administration is incapable of the truth, why should any one element be believed.
volsense on August 8, 2009 at 11:11 AM
It will have to be unresponsive. The entire idea behind this is to raise revenue to cover the huge deficits in medicare and medicaid. Revenues have to increase, and costs have to decrease, therefore the plan has to decrease or ration care, and substantially raise taxes, just to cover the existing deficit (medicare alone is running a deficit this year in excess of $300 billion).
Vashta.Nerada on August 8, 2009 at 11:12 AM
Excerpted From:
On the Price of Corn, and Management of the Poor
The London Chronicle, November 29, 1766
By Benjamin Franklin
For my own part, I am not so well satisfied of the goodness of this thing. I am for doing good to the poor, but I differ in opinion of the means. — I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. In my youth I traveled much, and I observed in different countries, that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer. There is no country in the world where so many provisions are established for them; so many hospitals to receive them when they are sick or lame, founded and maintained by voluntary charities; so many alms-houses for the aged of both sexes, together with a solemn general law made by the rich to subject their estates to a heavy tax for the support of the poor. Under all these obligations, are our poor modest, humble, and thankful; and do they use their best endeavours to maintain themselves, and lighten our shoulders of this burthen? — On the contrary, I affirm that there is no country in the world in which the poor are more idle, dissolute, drunken, and insolent. The day you passed that act, you took away from before their eyes the greatest of all inducements to industry, frugality, and sobriety, by giving them a dependance on somewhat else than a careful accumulation during youth and health, for support in age or sickness. In short, you offered a premium for the encouragement of idleness, and you should not now wonder that it has had its effect in the increase of poverty. Repeal that law, and you will soon see a change in their manners. St. Monday, and St. Tuesday, will cease to be holidays. SIX days shalt thou labour, though one of the old commandments long treated as out of date, will again be looked upon as a respectable precept; industry will increase, and with it plenty among the lower people; their circumstances will mend, and more will be done for their happiness by inuring them to provide for themselves, than could be done by dividing all your estates among them.
Ben Franklin >>>> Barack Obama
MarkABinVA on August 8, 2009 at 11:12 AM
Hell no. Get out from under your desk and participate. I mean, our leader said to “get in their face”.
Aye Aye, sir. I’m on the way.
BacaDog on August 8, 2009 at 11:12 AM
Yeah I’m surprised. Because it’s going to cost a lot more than an extra $1 trillion.
Half of Mexico will move here, then they will all have 5 babies per family.
Riposte on August 8, 2009 at 11:15 AM
The rule of thumb is take the original figure and triple it.
But that aside, who cares? The numbers no longer have any meaning. Long ago we jumped the shark. The debt numbers are so huge, even by Obama’s lying figures, they will never be repaid.
The real discussion is how and when we are going to default leading to a complete collapse of the US and world order. The good news is most of us will be dead by then. The process will probably take 75-100 years while we morph into some Orwellian state ending up in a Soylent Green final environment.
patrick neid on August 8, 2009 at 11:18 AM
And if the Chinese decide not to bankroll our fancy new health insurance plan, I bet that 5.1% “growth” curve will bend the other way.
Anyone seen that new book “How to invest and win in the era of crushing taxation and runaway inflation”? Yeah, me either.
TexasDan on August 8, 2009 at 11:18 AM
+100!
May I use that?
coldwarrior on August 8, 2009 at 11:19 AM
Has there ever been any type of entitlement that didn’t cost lots more than the most outrageously extravagant estimates?
The new estimate is way low.
Just sayin’…
applebutter on August 8, 2009 at 11:21 AM
Isn’t there one that goes something like, “There are lies, there are damn lies and then there are statistics and statistics can be made to say anything.”
Yakko77 on August 8, 2009 at 11:23 AM
“Missed it by ‘that’ much”–Maxwell Smart
ParisParamus on August 8, 2009 at 11:23 AM
sure, we’ll split the profits :)
faraway on August 8, 2009 at 11:23 AM
If that bill should some pass and become law, the outrage that will follow will destroy the Democratic Party.
GarandFan on August 8, 2009 at 11:24 AM
We should AUTOMATICALLY depose any Republican who votes for this abomination. No questions asked.
Mojave Mark on August 8, 2009 at 11:29 AM
It’s later than you think. Personally, I don’t see that as a good thing. When there were two center right parties, the world was a happier place.
applebutter on August 8, 2009 at 11:31 AM
Is the rumor that Parker Brothers are going to assist the treasury true? They will be printing the new “Obama” currency for general use.
conservativegrandma on August 8, 2009 at 11:32 AM
Has Linda Douglas been informed of this fishiness?
BuckeyeSam on August 8, 2009 at 11:33 AM
Here a trillion, there a trillion
Everywhere a trillion trillion
Good Obama has a plan
You pay, you pay, oh!
Liam on August 8, 2009 at 11:35 AM
Obamopoly?
coldwarrior on August 8, 2009 at 11:36 AM
Does that mean Joe Biden will be in charge of the four railroads?
BuckeyeSam on August 8, 2009 at 11:36 AM
As it was said:
Centinal did, indeed, not trust that group that brought the Constitution together. Not because of who they were, but what they overlooked. The nature of man in society with government appears to have been better understood in 1787-89 than it is today.
That is not a good thing.
We are unaware of just how precious our liberty is… until the despotic powers trying to block the avenues of liberty let their mask slip.
It has now slipped, and badly.
The day of Liberty approaches, yet again.
ajacksonian on August 8, 2009 at 11:37 AM
I see no way that any of what you said contradicts any of what Limbaugh or Hannity have said, and certainly doesn’t contradict conservative talk radio in aggregate. Hugh Hewitt in particular has done great work on the question of denial of coverage.
applebutter on August 8, 2009 at 11:37 AM
Paul Krugman says that Professor Parente is a racist.
ChrisB on August 8, 2009 at 11:39 AM
OOOOOOOOOOOh God…you mean it could get worse.
Well I would bet that we will start to see the same problem with numbers concerning un-employment rates.
They already dropped off over 700,000 people so that the numbers would look better.
Their will be more crack head economic games to come I am sure.
Baxter Greene on August 8, 2009 at 11:40 AM
The general rule to goverment spending: What ever number they give you double it and add a half for interest.
soooo 1 trillion is actually 2.5 trillion and so on. Trust in govermnet entities are at 0 with the milatary being the exception.
Dritanian on August 8, 2009 at 11:41 AM
Official Obamaspeak Translation Dictionary
“As I’ve always said”
He either never said it or said exactly the opposite.
“I don’t want to take over (fill in the blank)”
Dump the stock… he will be taking it over shortly.
“I promise to (again, fill in the blank)”
Bank on the opposite happening.
The “facts” reported from the government will be whatever Obama needs them to be. His whole style of handling anything serves to destroy any faith in government… which I believe is his true goal. The only truth is whatever he says. He wants judges with “empathy”. Translation: Decide each case based on how I want it decided, not on the law.
CC
CapedConservative on August 8, 2009 at 11:49 AM
coldwarrior on August 8, 2009 at 11:36 AM
BuckeyeSam on August 8, 2009 at 11:36 AM
I think we are all being taken for a ride on the Shortline Railroad.
It’s obvious that Obama’s long term fix for unemployment is government jobs. He won’t be satisfied until everything is owned by him, because it is all about the One. He knows whats best for us. Waiting for him to suggest the European school system where only the priveleged few get educated. The remainder go to trades/vocational schools.
conservativegrandma on August 8, 2009 at 11:54 AM
Maybe I missed it, but is dental health care included in the Obama plan?
If not, how will dental health care be handled for the uninsured?
albill on August 8, 2009 at 11:55 AM
This $2.4 trillion prediction would be perfect for some Nazi to ask about at a townhall meeting.
ChrisB on August 8, 2009 at 11:57 AM
I think Obama and his minions operate on the “Torture numbers long enough and they’ll confess to anything” axiom.
Patrick S on August 8, 2009 at 12:02 PM
Dental care?
Are you kidding?
Dental care will be handled by ACORN/SEIU thugs armed with baseball bats.
coldwarrior on August 8, 2009 at 12:03 PM
LOL… +10
Dritanian on August 8, 2009 at 12:05 PM
It seems to me that Beck’s argument (and I think both Limbaugh and Hannity make the same general case) is that Washington or the federal government will be controlling our lives and using these powers to promote their “progressive” vision of how America should look like.
I think the danger is more bureaucratic; that is, Washington isn’t controlling our lives – the bureaucracies, unresponsive to the public and the elected officials, will be doing so.
SteveMG on August 8, 2009 at 12:06 PM
Bluntly…do we really want the DMV to handle our medical choices?
coldwarrior on August 8, 2009 at 12:07 PM
I love the way these morons try to put this crap together. And they are so disconnected from the real world, they seem to actually believe their own crap. You can’t call them con artists, because a real con doesn’t believe the crap he’s putting out. No, I think they’re actually, truly, not very bright: they believe morons like Harry and Nancy, don’t read what they’re signing (isn’t that from high school economics – read before you sign anything?) and stick to the party line no matter what.
451 days until Election Day 2010.
n0doz on August 8, 2009 at 12:26 PM
Maybe the National Health Care program can teach people how to bend over and kiss their ass goodbye?
izoneguy on August 8, 2009 at 12:28 PM
Most of the morons who put it together won’t be covered by it. Why the hell should they care? Just like the unions won’t be covered by national health care. Why are they showing up at townhalls? It is clear what is going on.
This is the final push to socialize America. This can be defeated.
Even if it gets passed – we can abort it just like Obama does to unborn children.
izoneguy on August 8, 2009 at 12:35 PM
The banking cartel speaks, politicians do.
True_King on August 8, 2009 at 12:36 PM
MarkABinVA on August 8, 2009 at 11:12 AM
Nice. Thank You.
riverrat10k on August 8, 2009 at 12:39 PM
Astroturf, clearly Astroturf.
Angry Dumbo on August 8, 2009 at 12:45 PM
I am guessing the actual cost of this Obamanation will be between $3 and $4 Trillion over ten years.
Assuming we still have a country in ten years.
Dave R. on August 8, 2009 at 12:47 PM
albill on August 8, 2009 at 11:55 AM
Dental? Yes
This is a link to a PDF of one version of health care. It is HR 3200. Go to to page 84.
http://tinyurl.com/mns8rt
OR try thomas.loc.gov find HR3200
Pelayo on August 8, 2009 at 12:52 PM
Clarification;
Go to thomas.loc.gov
Pelayo on August 8, 2009 at 12:53 PM
I smell fish.
Joe Caps on August 8, 2009 at 12:55 PM
Old Sea Story
There’s an old sea story in the Navy about a ship’s Captain who inspected His sailors, and afterward told the Chief Boson that his men smelled… Bad. The Captain suggested perhaps it would help if the sailors would change underwear occasionally.
The Chief responded, “Aye, aye sir, I’ll see to it immediately!”
The Chief went straight to the sailors berth deck and announced, “The Captain thinks you guys smell bad and wants you to change your underwear.
Pittman, you change with Jones, McCarthy, you change with Kwiatkowski, and Brown, you change with Schultz. Now get to it!!!”
THE MORAL:
Someone may be promising “Change” in Washington; but don’t count on things smelling any better!
Spiritk9 on August 8, 2009 at 12:57 PM
Memo to congress critters
Google is a search engine name, not a spending target
CommentGuy on August 8, 2009 at 12:58 PM
The CHO only missed the mark by one digit. Unfortunately it was the place at the trillion place. “Missed it by that much!”
larvcom on August 8, 2009 at 12:59 PM
At some point soon here the fascist in chief is going to have to drop the pretense that this is about health care. He wants this country to be socialist, the first step on the path to total control of everything within the borders of this country.
Spiritk9 on August 8, 2009 at 1:02 PM
My pleasure, entirely. I thought it to be pertinent to many aspects of today’s liberal agenda. The Founders were far more intelligent than most today give credit.
One part of this excerpt that I found interesting was this:
“In my youth I traveled much, and I observed in different countries, that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer.”
So, Franklin and then Obama became “Worldly” but came away with entirely different remedies to the ills they saw that plagued various populations on Earth. The difference between the men, I believe, is that Franklin was a believer in human nature while Obama advocates that ideology and political action is the remedy. Obama on an ideological level completely discards the fact that there will be winners and losers in life. At all costs, he can make it right to all the down trodden if we can just spend trillions to level the playing field.
When your kid comes in crying with a scrapped knee you clean it up, put some Neosporin and a band-aid on it and tell them to go back out and they’ll be fine. You don’t let them cry crocodile tears for 15 minutes, make them popcorn and put in their favorite movie with a pillow and blanky.
Sorry for the tangent…..
MarkABinVA on August 8, 2009 at 1:23 PM
Well, considering that the original estimates for Medicare was around 9.9 billion by 1990 and that it had actually ballooned to over 110 billion, I think we can safely conclude that the real cost of Obamacare will be in the neighborhood of 10 trillion dollars.
JimK on August 8, 2009 at 1:56 PM
What’s this ‘we,’ kemosabe?
Ed, please don’t include us in under-estimating the incompetence of the government. WE do no such thing.
chimney sweep on August 8, 2009 at 2:09 PM
Just to use one example – I enjoy the jokes here as much as the hard information.
In fact, the hard information is so depressing that the jokes become a necessary analgesic for the pain of reality.
And an inspiration to get out and (Tea) PARTY!!!
BTW, any news of St. Louis SEIU protest today??
http://stlouisteaparty.com/2009/08/07/demand-justice-denounce-violence-saturday-at-seiu-office/
fred5678 on August 8, 2009 at 2:23 PM
Take the newer model CBO health care estimates, double that figure to allow for the usual pork, kickbacks, kidney-shaped swimming pools for all members of congress plus private aircraft and also add the cost of hiring union goons to “pacify” the “protesting peasants”. Then add a 2-3 million government administrative staff, who like SC justices, have lifetime tenure to mismanage the whole shebang and making sure the old die young and the young don’t live at all and all others have to wait eternally. By the time we are finished the cost will be 5,6,7 or even 8 times Obama estimates and it will FAIL. Of course congressional members won’t be burdened with this enormous POS-hiring their own doctors privately.
MaiDee on August 8, 2009 at 2:25 PM
When the crash comes, and you’re out in the streets, looking for food, maqke sure you pay the Democrats back, violently.
Jeff from WI on August 8, 2009 at 2:26 PM
Just when you thought you’d heard it all.
Gotta keep my whiskey bottle away from my gun cabinet.
SKYFOX on August 8, 2009 at 3:35 PM
Late to the party here today.
Steve you have it partially correct. Ever wonder why nothing changes regardless of the party in control. We keep moving left. That is because the rule of the bureaucracies, unresponsive to the public and the elected officials, have been doing so since the advent of Civil Service protections.
chemman on August 8, 2009 at 3:47 PM
Expect the SEIU to claim that ultra-right wing extremist were impersonating union members to slander the union.
chemman on August 8, 2009 at 3:53 PM
I think the real question here is….Once the Government collapses from all this debt, how do we stop it’s heart, operate on the patient and restart it?
What’s it going to take for our country to shut this government down, remake it the way our Founding Fathers meant for it to be, and re-start it with new safeguard controls in place, that will not allow the Government to get out from under the control of “We The People”?
FreedomLover on August 8, 2009 at 4:06 PM
Do you own a pair of pliers?
trigon on August 8, 2009 at 4:43 PM
Ofcourse not,why would they do a fool thing like that? The numbers are bad enough as they are.
whbates on August 8, 2009 at 9:54 PM
-
Now… you’re scaring me. There is a B. O. railroad in that game. Darn, I need to figure a way to meld Monopoly and Ouija board… I’ll get back to you with the skinny asap.
-
RalphyBoy on August 8, 2009 at 11:14 PM
I STILL think that number sounds low.
clement on August 9, 2009 at 9:08 PM
Take away Pelosi’ checkbook please. We ain’t talkin a new pair of shoes at Macy’s here.
johnnyU on August 10, 2009 at 9:29 AM
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