Study: ObamaCare could cost billions more than anybody projected

posted at 4:41 pm on September 11, 2013 by Erika Johnsen

Here’s a complementary pair of Reuters stories from the early half of the week, just to help build up the sense of excitement I’m sure you’re all feeling as the first open enrollment day of ObamaCare approaches in T-minus three weeks.

First, when the much-vaunted ObamaCare exchanges open for business on October 1st, the potential for massive delays, abuse, and fraud through the largely untested online systems is still going to be huge:

“At this moment, not a single state appears to be completely ready,” W. Brett Graham of the Salt Lake City-based consulting firm Leavitt Partners said in testimony to a Republican-controlled oversight panel in the House of Representatives.

He said states should be capable of providing “baseline functionality” when enrollment begins in three weeks. But he cautioned about the potential for delays: “Most, if not all, exchanges will experience a rocky enrollment period as they work to overcome both known and unknown operational challenges.” …

Some states are having difficulty integrating exchange technology with existing Medicaid and other state systems, according to Graham, who said the results could include slow enrollment, delayed eligibility determinations and increased potential for fraud and abuse.

Well, you might say, so what if the states aren’t ready to cope with the still-unknowable volume of people who’ll soon begin shifting onto the exchanges? We always knew this was going to be a messy and learning-oriented process with lots of, ahem, glitches. The point is that eventually everything will be smoothed out and ObamaCare will help us reduce both consumer health care costs and insurance premiums as well as help control the federal government’s (i.e., taxpayers) health-care spending, right?

Wrong. As estimates of exactly how much the huge new entitlement program that is the “Affordable” Care Act is going to impact the federal debt and deficit have shifted over the past few years (and not in a good way), the fact is that the top-down attempt to remake an entire sixth of the U.S. economy is bound to be fraught with still more unintended consequences and hidden costs than you can shake a stick at. For instance, a new study from Stanford notes that ObamaCare creates a major incentive for employees to eschew their employer-offered plans and instead take the cash and find a subsidized plan through the exchanges, while lots of employers in turn will find that it helps their bottom line to quit offering health insurance and pay the employer-mandate tax instead. This could lead to a huge migration to the exchanges that would stress the system in ways for which the “Affordable” Care Act’s authors never planned, plus add a heck of a lot more costs:

As many as 37 million Americans who receive health coverage through employers may be better off with the government-subsidized insurance plans that will be offered under President Barack Obama’s healthcare reform law for next year, according to a study released on Monday.

The analysis, compiled by researchers at Stanford School of Medicine and published in the journal Health Affairs, suggests that some employees may choose to dump the coverage they receive at work. It also points to a potential counter-trend to surveys of employers, which show that up to 30 percent would consider terminating health coverage for their workers within the first few years of “Obamacare.” …

That scenario, which would cost the federal treasury billions of dollars above what it has already projected, reflects the complicated financial carrots and sticks at the heart of Obama’s 2010 Affordable Care Act (ACA). …

Roughly “37 million people would be financially better off switching to the exchange” from employer-sponsored insurance, said Dr. Jay Bhattacharya of Stanford School of Medicine, who led the study.

If all of these 37 potential incentive-responders were indeed to switch to the exchanges, the government stands to spend up to $132 billion more in subsidies than they projected. Great.


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obama’care’ and amnesty will ruin the land.

Boycott all these.

Schadenfreude on September 11, 2013 at 4:45 PM

This is an incredibly small price to pay for our glorious socialism, Comrades!

faraway on September 11, 2013 at 4:47 PM

Factored into Obamacare is a giant treasure–the Death Panels rushing older more well off folks to their demise whereby their estates become accessible to the feds.

Don L on September 11, 2013 at 4:49 PM

Okay Bishop!

Don L on September 11, 2013 at 4:49 PM

Factored into Obamacare is a giant treasure–the Death Panels rushing older more well off folks to their demise whereby their estates become accessible to the feds.

Don L on September 11, 2013 at 4:49 PM

So, Obama will be sitting at the bottom of the cliff, going through the pockets of old folks in their wheel chairs?

faraway on September 11, 2013 at 4:55 PM

If people bow out for the exchanges they cannot get the subsidy if their employer provides affordable benefits. I realize that HHS says they and the IRS aren’t going to check whether anyone is eligible – that probably will be challenged. Well, actually it laready is being challenged, and legislation will be coming forcing the democrats to vote for fraud.

Think after Obama screwed all these democrats to the wall over a potential Syria vote they are going to stick their neck out to help him on anything else?

Zomcon JEM on September 11, 2013 at 4:57 PM

Is obama showing how much is left of his credibility or his presidency?

Schadenfreude on September 11, 2013 at 4:57 PM

However much the government says something’s going to cost, triple it first, and that will probably be a touch low.

Red Cloud on September 11, 2013 at 4:58 PM

Incentives matter. Depending on virtuous behavior to contain costs rarely works.

[Where I live at State level] Free insurance (i.e. fully subsidized premiums) for [probably some] children. Many parents pay the (then) $300 per month premium but some cannot or do not. Implement a program so those children who don’t have insurance (a comparatively small number) can get free insurance. Watch the program strain and implode as people who used to pay for their children’s insurance (and meet the qualifications) drop the insurance in favor of the FREE insurance which vastly increases the number of participants.

PPACA assumed that business and employees would act virtuously even though they could benefit from taking advantage of the law’s provisions. Any surprise about that?

Russ808 on September 11, 2013 at 4:59 PM

All part of the left’s destructive plan to invoke single-payer.

It’s a feature, not a bug.

Common Sense Floridian on September 11, 2013 at 5:01 PM

So what, it was always meant to be a wealth transfer device.

Monkeytoe on September 11, 2013 at 5:02 PM

NO CRAP YOU IDIOTS.

WHY THE F’ING HELL DO YOU THINK WE SAID IT WOULD BE SO?

TX-96 on September 11, 2013 at 5:02 PM

If all of these 37 potential incentive-responders were indeed to switch to the exchanges, the government stands to spend up to $132 billion more in subsidies than they projected.

Intended consequences.

The jacobin / progressives couldn’t, despite their substantial majorities in the House and Senate, get everything they wanted because even a few Dems didn’t accept or believe the solution was a US NHS.

But since hard left couldn’t get what they wanted, they pushed for the next best thing – a clusterfark that would not only fail to address the challenges in the US healthcare industry, but collapse in such a way where it would pave the path for the ‘only solution’ – single payor.

Athos on September 11, 2013 at 5:02 PM

Given the original cost projections for Medicare – and how wildly off they were, that $132 billion projection is probably off by a factor of 4.

GarandFan on September 11, 2013 at 5:04 PM

oboehnercare

davidk on September 11, 2013 at 5:06 PM

Than Liberals predicted, I think the 48% of the reset of us knew that.

rgranger on September 11, 2013 at 5:08 PM

Grant AMNESTY and watch that Obamacare over cost figure skyrocket to over $2Trillion…. interestingly enough, the same figure that was touted when about $1 Trillion total was carved out of Medicare .

…and watch the border, and our sovereignty, become irrelevant as anyone in the world who wants to come to this nation for free medical care and other benefits arrive in droves.

thatsafactjack on September 11, 2013 at 5:08 PM

“…more than anybody projected”

Anyone? I think you mean any Democrat.

DamnCat on September 11, 2013 at 5:09 PM

The sequester is having it’s effect, Obama is now robbing banks to pay for his socialist utopia.

faraway on September 11, 2013 at 5:09 PM

“Unexpectedly”

I think it will be trillions, not billions.

talkingpoints on September 11, 2013 at 5:10 PM

Would someone please send this to Boehner?

ctmom on September 11, 2013 at 5:10 PM

Well, I had thought the sky was the limit on costs…

So its actually reached orbit?

Talk about under-estimation!

ajacksonian on September 11, 2013 at 5:10 PM

ObamaCare could cost billions more than anybody projected

Numbers shmumbers!!!/

If all of these 37 potential incentive-responders were indeed to switch to the exchanges, the government stands to spend up to $132 billion more in subsidies than they projected. Great.

And what happens if amnesty, in any form, gets passed? At some point in the future, those numbers will also need to be included in to the calculus which is Obamacare’s flawed numbers. You could easily add 50% more to that number, making it more like $200 billion. Because we know that the majority of the people who will be amnestied are low-wage workers, who will receive subsidies. So that will be a double hit.

Patriot Vet on September 11, 2013 at 5:13 PM

Study: ObamaCare could cost hundreds of billions more than anybody the democrats that illegally pushed it through in the middle of the night projected lied to us about.

jukin3 on September 11, 2013 at 5:13 PM

Obamacare is just one of the numerous agenda initiatives of ‘fundamental change’ – the equation of Alinsky plus Cloward & Piven that is at the core of the jacobin / progressive agenda being enacted by the Obama Administration.

The cost is immaterial to the left -it’s all part of a means to achieve the desired ends.

Athos on September 11, 2013 at 5:17 PM

Would someone please send this to Boehner?

ctmom on September 11, 2013 at 5:10 PM

He knows and his face is wet (not tears, saliva) as he thinks about possibly being in control of doling out that much government largesse. Oh, how he’ll reward his friends by lining their pockets. They’ll all dine scrumptiously at the public trough.

Kafir on September 11, 2013 at 5:17 PM

Employers are dumping full time employees in order to avoid paying excessive premium under Obamacare.

The nation will rapidly become a part time employment nation.

That doesn’t mean people will work less. It means that the average worker, instead of having one full time job and working 40 hours per week, will have to have at least two part time jobs, and since employers will still wish to get as much work as possible from each employee, will likely work the 29 1/2 hours per week to qualify for part time status….meaning that a person who did work 40 hours per week at one full time job will now work 59 hours per week to maintain two part time jobs…all without benefits.

This condition, along with the associated stress of the necessity of holding two jobs and satisfying two employers, mortgages, children’s educations, dental bills, etc, servicing household bills and living expenses, all contingent and dependent upon holding those jobs, will lead to greater health issues far quicker than a worker employed in a steady, full time, 40 hour per week job with benefits.

thatsafactjack on September 11, 2013 at 5:18 PM

Wow, who could have seen this coming?

Chris of Rights on September 11, 2013 at 5:19 PM

Our company plans on dropping medical insurance, paying the fine and telling employees to go to Obamacare. It’ll save us a big chunk of the cost of our present coverage, but it obviously will cost the taxpayers that savings plus whatever it costs to operate the bureaucracy that administers these rules.

The insurance company will probably be our present company, the insurance will be essentially the same as we have today, though the details on out of pocket etc will change a bit, and our employees will have to live through the rocky start up years. The taxpayers will pay through the nose; I’ll bet it will cost the government a couple thousand dollars per employee.

Quoting Max Baucus, who was in all fairness, only referring to the implementation while I think it applies to the whole monstrosity, “this is a train wreck”.

MTF on September 11, 2013 at 5:20 PM

And what happens if amnesty, in any form, gets passed?

Patriot Vet on September 11, 2013 at 5:13 PM

We had a guest speaker at our TEA party meeting on Monday. The Senate immigration bill gives a certain legal status to current illegals. At the same time, Øbamacare exempts persons in that status from any of the mandates. Therefore, if the immigration bill passes, employers will have an incentive to hire former illegals since they won’t have to provide insurance for them. More unintended consequences (or are they?)

Kafir on September 11, 2013 at 5:21 PM

Study: ObamaCare could cost billions more than anybody projected

.
NATCH !!! As expected… !!!!!!!!!!!!!!

ExpressoBold on September 11, 2013 at 5:22 PM

If all of these 37 potential incentive-responders were indeed to switch to the exchanges, the government stands to spend up to $132 billion more in subsidies

Couldn’t it also have an impact on a business being able to keep the insurance plan it currently offers? (If the employer pays a portion of the premium)

I know that rates are cheaper if you have more employees to put on a plan. If employees drop off, come renewal time, the employer might not be able to afford the higher rates and will drop the plan all together.

MississippiMom on September 11, 2013 at 5:22 PM

Under a trillion dollars! Huh.

Doctor Evil couldn’t be prouder.

djaymick on September 11, 2013 at 5:26 PM

Also, employers don’t forget about the Oct 1st deadline to notify your employees. $100 per day fine if you don’t. You must comply even if you only have one employee.

Here and here

MississippiMom on September 11, 2013 at 5:27 PM

If people bow out for the exchanges they cannot get the subsidy if their employer provides affordable benefits.
Zomcon JEM on September 11, 2013 at 4:57 PM

I’m pretty sure that you can still qualify for a subsidy even if your employer pays a part of your insurance, if the plan/amount does not meet the “minimum value standard”. I’m still trying to figure out what that means exactly.

MississippiMom on September 11, 2013 at 5:33 PM

Study: ObamaCare could will cost billions more than as anyeverybody knew and projected expected

FIFY

bgibbs1000 on September 11, 2013 at 5:42 PM

“Wow! That’s really shocking,” said no one ever.

Philly on September 11, 2013 at 5:43 PM

So they dump their workers onto the exchange and pay the tax, then the tax goes up to $20,000.

And then the deductible goes up to $5K per person in a family of four.

The idea is to get all the money coming into the government and give out as little as possible back to the person with the policy.

Fleuries on September 11, 2013 at 5:45 PM

It’s not just the cost of obozocare that’s going to be a crushing blow to our country – there are thousands of doctors graduating each year into a massively stagnating job market for health care providers – particularly Specialists.

What’s going to happen when those folks start dropping out of the workforce because there’s no work for them?

And what does that mean to the overburdened health care system in regards to patient care???

KMC1 on September 11, 2013 at 5:45 PM

But, I can still keep my Obamaphone, right?

An’ my EBT card?

I don’t care none at all.

Ain’t my money.

You go, Barry!!!

coldwarrior on September 11, 2013 at 5:48 PM

What’s really sad here is that, to the political class, gauged against the cost of Obamacare…$132 billion seems inconsequential… not even a whole drop in the bucket… and they’re so used to spending the tax dollars squeezed out of the working citizens of this nation in any way they please… these numbers mean less to them than Monopoly money.

thatsafactjack on September 11, 2013 at 5:59 PM

I don’t think I’ve seen any of these ‘research’ pieces address the fact that there aren’t more doctors, and more importantly, O’Care is going to reimburse at a lower rate. I already have VA health care in addition to what I usually use, if I want an appointment, it’s going to be six months to be seen. Not sure how many Americans are going to find O’Care to be a great improvement…

John_G on September 11, 2013 at 6:01 PM

This could lead to a huge migration to the exchanges that would stress the system in ways for which the “Affordable” Care Act’s authors never planned

No, this is deliberate. It will give us de facto single payer.

obladioblada on September 11, 2013 at 6:01 PM

I have a dream, that Obama, instead of being what he is, which I don’t have a clue what that is, would have been a doctor, then, he’d have a very different take on ObamaCare. Because doctors have to take the training, accept patients, do the work, and get paid. Which Obama seems to have completely overlooked.

/everyone gets free stuff because it’s fair

Paul-Cincy on September 11, 2013 at 6:02 PM

Will Obamacare be repealed or won’t it? Will Congress fund it or won’t it? Blah, blah, blah. We the people just need to do what we need to do and Congress be damned. Resist. Refuse. Revolt. EXEMPT OURSELVES! We did not comply with Prohibition and we simply should not comply with Obamacare. For religious reasons. For privacy reasons. For the cause of liberty and freedom and in protest of the idea that the federal government (under one party rule, no less), can force private citizens to purchase anything with our own money. Are we citizens or subjects? Mice or men(women)? Just say NO to socialism and to the corrupt, unionized, far left IRS, the gestapo of America’s political class. After all, the federal government ignores millions of illegals who are breaking U.S. immigration law every day and nothing happens to them. Selective enforcement of our laws is just as UN-Constitutional as the Obamacare law itself! (Supreme Court be damned as well). Our Founders pledged their lives, their fortunes and their sacred honor. All we have to do is just say no to a scheme we all know is un-American and a violation of our most basic founding fundamentals of privacy, self reliance, limited government and individual freedom.

devan95 on September 11, 2013 at 6:11 PM

Mr Obvious is back….too bad there are far too many Mr and Mrs Obliviouses.

CW on September 11, 2013 at 6:22 PM

obama’care’ and amnesty will ruin the land.

Boycott all these.

Schadenfreude on September 11, 2013 at 4:45 PM

i think it is important to look at what these huge corporations are saying

Among these was a recommendation that immigration reform “address the reality that there is a global war for talent and that countries are competing to attract and retain the human capital essential to a culture of productivity and innovation.” The report contained a number of recommendations aimed at attracting and retaining immigrants with strong science, technology, engineering and math (STEM) skills. The Senate bill includes strong provisions along the lines of our recommendations, and we would encourage the House to adopt a similar approach.

Even with the economy still recovering, many of our companies continue to have difficulty finding sufficient American workers to fill certain lesser-skilled positions.

it is pretty clear to me that either they are being massively pressured by the barry/left to get on board….Or, this is a huge vote of No Confidence in our current population.

1. labor participation rate low as is the percent of population that works

2. People quit looking for work in droves each month forcing the unemployment numbers lower

3. no one cares…lots of free stuff…and also lots of tax refundable credits/EITC, etc

4. education sucks big time…no one cares

5. companies wonder why they can’t find people to work…therefore we must import our workers…

r keller on September 11, 2013 at 6:49 PM

Feeling the heat

Schadenfreude on September 11, 2013 at 7:30 PM

I am just going to ignore the open enrollment. I couldn’t afford to pay the $765 per month policy last January for an HMO for just me. I figure if I get really, really sick, on my way to the hospital, I can stop by somewhere and get a policy the day I need it.

How are they going to enroll people who might be a year or 2 late filing their taxes? How can they verify income? How can they verify the “tax credit” figured for the 2014 “subsidy”?

Why are they not using current LICENSED health insurance professionals for the rollout?

I am so disgusted. I am choosing to not participate in this mess.

karenhasfreedom on September 11, 2013 at 9:35 PM

ObamaCare could WILL cost billions TRILLIONS more than anybody projected

(Corrected obvious errors in headline)

landlines on September 12, 2013 at 12:47 AM

it is pretty clear to me that either they are being massively pressured by the barry/left to get on board….Or, this is a huge vote of No Confidence in our current population.

1. labor participation rate low as is the percent of population that works

2. People quit looking for work in droves each month forcing the unemployment numbers lower

3. no one cares…lots of free stuff…and also lots of tax refundable credits/EITC, etc

4. education sucks big time…no one cares

5. companies wonder why they can’t find people to work…therefore we must import our workers…

r keller on September 11, 2013 at 6:49 PM

The companies can find people to work: it’s just that if they hire a citizen or a legal immigrant, they must comply with Obamacare and pay for health insurance or a fine. If they hire illegals, there is no requirement to participate in Obamacare: therefore, any rational employer will fire employees who are not illegals and replace them with illegals.

So this is NOT a vote of “no confidence” in our present population of workers, it is simply employers’ self-defense against a poorly-conceived law and its perverse incentives to force firing of legal citizens.

landlines on September 12, 2013 at 1:02 AM

Roughly “37 million people would be financially better off switching to the exchange” from employer-sponsored insurance, said Dr. Jay Bhattacharya of Stanford School of Medicine, who led the study.

Am I missing something? We were told that if we like our insurance, we could keep our insurance. If I lose the insurance I like because perverse economic incentives in Obamacare for my employer to drop coverage, and I’m forced into an exchange that I have no idea whether I’ll like or not, how am I better off?

Will Obamacare kill the insurance industry, or change it into a quasi government entity like public utilities or the “military-industrial complex”?

Ever try to argue with your water company or power company after they’ve shut you off?

I can’t believe Democrats haven’t paid the price they need to pay for foisting Obamacare upon us.

olesparkie on September 12, 2013 at 11:14 AM