“If you just do simple multiplication, 12 million [insured individuals] into $108 billion, we are talking literally every single [Obamacare] recipient would be costing this government more than $5 million per person for their insurance. It’s staggering….$108 billion for 12 million people is immoral. It’s unconscionable. ”
— Rep. Pete Sessions (R-Tex.), statement on the House floor, March 24, 2015
Sometimes a lawmaker will wander on the floor of the House or Senate and begin speaking without any notes. That’s a big mistake, especially for someone like Sessions — who is chairman of the House Rules Committee and was speaking about the federal budget.
Let’s do some simple math.
First of all, let’s start with the numbers that Sessions cited on the floor. He claimed that the cost of insuring 12 million people would be $108 billion. Then he did some “simple multiplication” and came up with a figure of $5 million per newly insured person.
Actually, if you divide $108 billion by 12 million, you end up with $9,000 a person. That’s a pretty big difference. We might understand why $5 million would be “immoral” or “unconscionable,” as Sessions thundered in his speech, but it turns out to be less than 1/500th of that amount.
None of Sessions’ numbers make much sense, however. The Congressional Budget Office, in a March report, said that the cost of coverage in fiscal 2016 for Obamacare (in the exchanges and Medicaid expansion) would be $95 billion, after penalty payments and other revenue. But the reduction in the number of uninsured Americans would be 23 million people.
So if you do the math correctly, that’s a cost of $4,130 per uninsured individual in 2016. So that’s less than half the figure that would have resulted from properly dividing Sessions’ numbers.
The CBO also reports that about 15 million people on insurance exchanges would qualify for insurance subsidies — and the average subsidy would be $4,040 per person. That’s another way to look at it.
After we contacted Sessions’ office and asked for an explanation, the lawmaker called The Fact Checker and said he had gotten his numbers mixed up. He said that he meant to say that Obamacare had cost $1.2 trillion over the past three years, and yet had only covered 20 million people. (He noted that he is not counting revenues that offset some of the cost.)
That would be $60,000 an insured person. This sounds suspiciously like the bogus Daily Mail claim that the law would cost $50,000 per insured individual, which our friends at PunditFact debunked a few months ago.
The problem with the Daily Mail calculation is that the newspaper took a ten-year budget number and divided by the number of insured individuals in a single year. No serious budget or health expert would use that kind of calculation.
In any case, the CBO estimates the cost of coverage in Obamacare from 2014 to 2016 would be $233 billion. The number of people who gained insurance in that period would be 52 million people. On an annual basis, it would cost $78 billion to insure 17 million people — or about $4,500 per person.
The Pinocchio Test
Senior lawmakers should not be uttering nonsense math on the House floor. No matter how you slice it, the cost per newly insured person is less than $5,000 a year. Whether that’s good or bad is a matter of opinion. But it’s certainly far less than $5 million or even $60,000.
Sessions earns Four Pinocchios.
Send us facts to check by filling out this form
For more Fact Checks on the Affordable Care Act: