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CBO Raises Cost of New Health Care Law by $115 Billion - Virtually Eliminating the Earlier Estimated Savings; Post date: 7-29-2010

Washington, May 12 -

Yesterday the Congressional Budget Office (CBO) released a revised cost estimate of the new health care law upping the total cost by $115 billion thereby virtually eliminating the earlier estimated cost savings that was touted by the Majority when the bill passed in March. This is due to the fact that in their original cost estimate, CBO excluded many of the add-on discretionary costs. The CBO said the administrative costs of implementing the Patient Protection and Affordable Care Act (H.R. 3590) combined with various federal grants programs and mandatory Medicaid expansion will now push the overall cost of the legislation to well over $1 trillion.

“I joined with many of my colleagues in Congress to point out this very flaw in the CBO cost estimate leading up to a final vote on the bill,” said Congressman Bill Posey. “Sadly, the Majority in Congress and advocates of the bill chose to ignore the facts and misled the American people to the tune of at least $115 billion. Now the fact has been laid bare for all to see clearly.”

In his March 21st House floor statement and prior press releases, Posey stated that the bill “creates dozens of new programs, however the CBO cost estimate does not include any costs associated with these programs. The Senate Budget Committee estimates the ten-year costs of these programs at $114 billion.” Posey’s complete statement can be viewed HERE.

Overall, the actual cost of the health care reform bill, when you exclude all of the gimmicks, is $500 billion more than advertised in just the first 10 years.

“This underscores the need for a more honest and transparent legislative process in Washington,” added Posey. “There was a rush to pass this bill before the full costs and effects were known by the public, and sadly, the media largely played along.”

Additional developments since the bill was passed include:

• CBO and CMS now estimate that rather than reducing the cost of health insurance premiums, enactment of the health care reform will drive up the cost of medical insurance by as much as $2,100 per year for family coverage. (House Ways and Means Committee, April 28, 2010, NYT)
  
  
• A cost estimate released by the Administration’s own Center for Medicare and Medicaid Services finds that the bill will not slow the rate of growth in national health care spending as promised by its backers, but will increase it by more than $310 billion. CMS further estimates that 18 million Americans will remain uninsured. (CMS, April 22, 2010)
  
  
• American businesses have already been forced to re-estimate earnings downwards by billions of dollars. (WSJ)
  
  
• The CBO also estimated that the cost of fixing the payment system for doctors under Medicare will be $280 billion. This provision was dropped from the health care reform bill in March because it would have pushed the costs of health care reform even higher. Absent this fix, doctors face a 21% cut under Medicare. (CBO, April 30, 2010)
  
  
• More than 20 states have sued the federal government over the provisions of the bill (individual mandate and Medicaid mandates).