CBO Releases New Numbers on ObamaCare

The Congressional Budget Office released its updated scoring of the costs and benefits of the PPACA (ObamaCare).  (Via NPR.)  Writes Jeffrey H. Anderson,

The latest CBO scoring of Obamacare, in the wake of the Supreme Court’s 5-4 decision upholding the overhaul’s individual mandate as an allowable (although seemingly unprecedented) tax on inactivity, shows that President Obama’s centerpiece legislation would cost about $2 trillion over its real first decade (2014 through 2023). The CBO also says that — despite its colossal cost and its unprecedented expansion of power and control over Americans’ lives — Obamacare would, as of a decade from now, leave 30 million people uninsured.

The CBO may only base its score on the next ten years of costs and income.  Back in 2010, the cost for ten years of ObamaCare was scored from 2010 to 2020.  Benefits begin to accrue in 2014, although the government began allocating money to it in 2010.  This “ten years of income, six years of expenses” set-up enabled the government to claim that ObamaCare was cost-neutral (or even cost-cutting).  However, when the CBO scored the PPACA from 2012 to 2022, it used eight years of expenses and ten years of income, which changes the net costs.

(Continued below the fold)

Obesity is not the new smallpox

For those Fog of Law readers who are living in a cave: New York City Mayor Michael Bloomberg proposed a ban on large sizes of soda.   The local government justifies the ban thus:

“Obesity is a crisis this City cannot afford to ignore.” said Health Commissioner [Thomas A.] Farley. “If a virus were killing 5,800 New Yorkers in a single year, people would be clamoring for government action to stop it. The fact that obesity kills that many year after year only increases our duty to respond.”

Assuming arguendo that obesity does kill almost six thousand New Yorkers annually and that banning soda would appreciably change that number (rather than merely making it difficult for eight million residents and workers to obtain the beverages of their choice, enforced via more bureaucracy and fines), the government’s analogy still fails.

Viruses, plagues, and pestilence demand government attention because they affect the entire population, not merely the affected person.  The right of “every freeman to care for his own body and health as in such way to him seems best”* may yield to a law to ensure that other people are also able to care for their own bodies, or an emergency that presents a grave threat to the public health; a pestilence-ridden human is a danger not just to himself, but to others.  Public schools require vaccinations and an annual check-up to ensure that the pupil is in good health and able to obtain the benefits of an education, and to prevent that pupil from infecting his peers and shutting down the school in the face of a plague.  Adults and children may be forced to be vaccinated so that herd immunity prevents the spread of disease.  Inebriation is permissible; drunk driving is not.  Even the heavy-handed smoking bans do not ban cigarette sales nor smoking; they merely ban smoking in areas where other members of the public have little choice but to refuse to use public school or to inhale the carcinogens.

None of that logic applies to a ban on soda.  There mere existence of a large bottle of soda does not induce diabetes in passerby; one person’s purchase does not compel another to purchase and consume the same.  One person’s obesity does not trigger an epidemic of bad eating habits, type II diabetes, or unchecked weight gain.  There is some research to suggest that people mimic the behaviour of their peers, and obesity will occur in clusters of friends and co-workers, but such simply cannot be likened to pestilence nor of sharing the road with a drunken sot who cannot steer properly.

*Jacobson v. Commonwealth of Massachusetts, 197 U.S. 11 (1905).

Digging into that “ObamaCare ruling saves $84 billion” statistic

The Congressional Budget Office announced that the Supreme Court’s ObamaCare ruling would save the federal government $84 billion.  Pro-PPACA groups hailed this as a victory for socialised medicine.

Here is what the CBO said about the cost savings:

The Supreme Court’s decision has the effect of allowing states to choose whether or not to expand eligibility for coverage under their Medicaid program pursuant to the ACA. Under that law as enacted but prior to the Court’s ruling, the Medicaid expansion appeared to be mandatory for states that wanted to continue receiving federal matching funds for any part of their Medicaid program.3 Hence, CBO and JCT’s previous estimates reflected the expectation that every state would expand eligibility for coverage under its Medicaid program as specified in the ACA. As a result of the Court’s decision, CBO and JCT now anticipate that some states will not expand their programs at all or will not expand coverage to the full extent authorized by the ACA. CBO and JCT also expect that some states will eventually undertake expansions but will not do so by 2014 as specified in the ACA.

National Federation of Independent Businesses, et. al v. Sebelius was not only about the individual mandate; it was also about whether the federal government could force states to expand Medicaid; the Supreme Court ruled 7-2 against the federal government.

Legally, many states will not be forced to expand Medicaid and thus the federal government will spend less money, as it will implement less of ObamaCare/PPACA.  If you read beyond the headlines, this does not mean that the PPACA saves money; quite the opposite is true.

Finally, there is this gem:  CBO also said that 1.5 million of the people rendered ineligible for Medicaid by the Supreme Court’s ruling would have been eligible for the program if the health care bill had never passed into law. As it is, they now “will be less likely to become aware of and sign up for either program.”

(For more on the CBO’s assumptions as to the costs of ObamaCare, see Avik Roy’s post here.)

The Individual Mandate Tax, explained

Grace-Marie Turner of The Galen Institute outlines the many taxes and fees that will be imposed upon Americans who do not buy government-approved health insurance.  She also hits on this important point:

Remember that the government will determine what health insurance policies meet its approval to satisfy the individual mandate. If citizens decide they prefer a different health plan, they would have to pay for that insurance as well as pay the new tax.

The press often presents the individual mandate as a dichotomy: buy health insurance, or pay a fine.  It ignores the fact that you can have health insurance – and good health insurance, appropriate for your own needs – and still have to pay several hundred dollars in penalties.

If your health care plan doesn’t cover birth control, prescription drugs, several “free” doctor’s visits, or has an out-of-pocket limit that is “too high”, you will end up buying health care and paying a fine.  The alleged purpose of the individual mandate is to protect consumers from waiting until ill to purchase health care – the quid pro quo of requiring insurance companies to take all comers, thus preventing consumers and insurance companies from cherry-picking.

There is an iota of logic in not wanting people to switch from an inexpensive, high-deductible plan to an expensive, comprehensive plan should they fall ill, as there is some logic in reducing uncompensated care.  However, the government’s solution of requiring every person to buy high-priced health insurance creates an entirely new group of problems (i.e. raising the cost of care and the bureaucracy needed to access said care), and is aimed directly at “reforming” that which works well.   The 250 million Americans with health insurance are not the problem in need of a solution: approximately 90% of them are satisfied with the health care available to them. Yet the slew of ObamaCare requirements will obligate millions of those Americans to change their health care plan or to pay a fine.

Welcome!

Welcome to “Fog of Law,” a health care law and policy blog.  The “fog of law” refers to the confusion as the media reported on the ObamaCare ruling.

I’m a Massachusetts-based lawyer who was the spokeswoman for a ballot initiative to repeal the state-wide individual mandate.