The CBO estimated that Obama’s sweeping healthcare reform would reduce the deficit by $143 billion over 10 years. However, they were wrong (unsurprisingly). A new study conducted by the Lewin Group suggests that realistically the bill will begin adding to the deficit by 2015. That’s 5 years from now. So I’m not sure Obama plans on lowering the deficit over 10 years if he starts increasing it in five….
In order to assure the increase in our deficit, the Lewin Group study predicts that $110 billion dollars of taxpayer money will be used to fund federal insurance subsidies. This cost prediction is 578% higher than the former estimate by the Congressional Budget Office. Fairly significant.
Really, the only aspect of Obamacare that its proponents hang their hats on is its ability to reduce the deficit. Well, throw that out the window. Nothing to support now, sorry. (not really)
The CBO predicted that only 7 million Americans would take advantage of the federal tax credits in 2014. This number results in a total budgetary cost of 19 billion. The Lewis Group reports that the cost could actually be 91 billion dollars higher than CBO expectations.
The Lewin Group was commissioned by:
Families USA, a healthcare reform advocacy group based out of Washington D.C. which is closely allied with the White House and leading Democrats in Congress. Then Senator Obama was a keynote speaker at their annual Health Action conference in 2005 and 2007, and House Speaker Nancy Pelosi opened the 2008 event. Other leading Democrats who have participated at Families USA events in recent years include Hillary Clinton, John Kerry, and Ted Kennedy.
Families USA is trying to make a bizarre case to support the bill, touting the $110 billion tax credit program as “one of the largest middle-income tax cuts in history.” That may be true, but it also is ruinous to any possible support of the bill on a platform of deficit reduction. Furthermore, this tax credit is not even necessarily accurate. The numbers are based on Lewin Group projections of all eligible participants by 2014. That number is 28.6 million people. It does not estimate the number of people that will actually take advantage of the program.
So, Families USA, while making the claim that the reform will produce a huge middle-class tax cut, also destroys its argument that the bill will reduce the deficit. Bizarre.
However, even with this error, it is almost assured that Obamacare will produce higher costs than original CBO estimations. The Lewin Group predicts that 28.6 million people will be eligible for federal subsidies. That number is 50% larger than original estimate of eligibility by the CBO. These undervalued CBO predictions provide the data behind their estimate that only 7 million Americans will take advantage of federal insurance in 2014. Since the number of eligible Americans will be as much as 50% greater than the CBO anticipated, the number of people using federal subsidies will no doubt increase as well. By extension, the total cost will increase. Due to increased costs, the projected $143 billion dollar deficit cut is no longer accurate.
So, Families USA tries to make a point to stress the tax breaks to the middle class based on unapplicable data. Were they to use proper estimates, the tax breaks would be lower, which dilutes the intention of their propaganda. Furthermore, while making their faulty point, they seem to overlook the fact that such statistics would increase the deficit. By publishing this study, it is clear that Families USA is using faulty data analysis. However, even without the faulty analysis, the study provides information proving that costs will exceed expectations and increase the deficit.
What a bizarre way to make a point.