No, the CBO hasn’t doubled its cost estimate for health-care reform

at 08:51 AM ET, 03/20/2012

No, the Congressional Budget Office hasn’t doubled its cost estimate for the Affordable Care Act.

Here’s an apples-to-apples graph of the gross spending on health-care coverage — remember, these numbers don’t take into account the Medicare cuts or other pay-fors — that the CBO predicted in March 2010 and their most recent release:

It’s up by 8 percent, mostly because the recession has made people poorer, and so the health-care law is going to have to spend more to help them get health insurance. That’s what it’s supposed to do.

Here’s an apples-to-apples graph of the “net” cost of the coverage provisions — so, the spending minus the savings in that category — from the two CBO reports:

The net cost, as you can see, is down slightly, mostly because Congress has tweaked some penalties.

So how is Conn Carroll getting his numbers? By comparing apples to oranges. The first CBO estimates he quotes run from 2010 to 2019. The second set run from 2012 to 2022. That is to say, the first set of estimates spans 10 years and includes four years where the bill is being implemented (2010-2013) and six in which it’s fully operational (2014-2019). The second set spans 11 years and includes only two years in which it’s being implemented (2012, 2013) and nine years in which it is fully operation (2014-2022).

But as you can see in the graphs above, if you compare any given year that the two CBO estimates share, the cost hasn’t doubled, or even done anything close. The disparity in the cost estimates only comes when you take a different sample of years, in which the law is doing different things, in an economy of a different size. And even then, costs went up only if you take “gross” costs rather than “net” costs, which is a rather unusual way to think about the budget.

 
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