Obamacare: what the CBO and OACT really said

In his recent “pep talks” about Obamacare, the President has frequently mentioned the Congressional Budget Office’s findings to support his arguments. As I have read those findings, as well as those of the Office of the Actuary for Medicare and Medicaid (OACT) I am perplexed by the President’s comments.

We are told that Obamacare will reduce everyone’s premiums.  Here is what the CBO actually said:

CBO found that premiums in the individual market will rise by 10% to 13% more than if Congress did nothing. Family policies under the status quo are projected to cost $13,100 on average, but under ObamaCare will jump to $15,200.

We are told that Obamacare will not only be deficit neutral, but, will actually create a $139 billion dollar surplus over ten years.  The only problem with that statement is that the Senate bill does not include what is known as the “doctor fix”.  Although originally in all versions of Obamacare, it has been dropped from the final Senate version.  Why?  Because it will add $250 billion to the cost of Obamacare, making the bill not only not deficit neutral, but, in fact, a $110 billion deficit over the first 10 years.  Not to worry, docs, the “doctor fix” is now in a separate bill. 

Here’s what the OACT says could happen if the federal government doesn’t update it’s payment rates to doctors:

Over time, a sustained reduction in payment updates…would cause Medicare [and Medicaid] payment rates to grow more slowly than…the providers costs of furnishing services to beneficiaries.  Thus providers…could find it difficult to remain profitable, and might end their participation in the program…possibly jeopardizing access to care

Another reason President Obama can claim the bill to be “deficit neutral” over the first 10 years is because of the new federal disability program (CLASS) contained in the Senate bill.  It will begin collecting premiums in 2010, but would not have to pay out any claims until 2015.  In the interim, those premiums are counted as “income” to defray the cost of Obamacare.  Here’s what the OACT had to say about CLASS:

…we estimate a net federal savings for the CLASS program of $39 billion during the first 9 years of operation-the first 5 of which are prior to the commencenent of benefit payments…in 2025 and later, projected benefits exceed premium revenues

We are also told that Obamacare will actually reduce the amount of money spent in this country on health care (i.e., bend the cost curve).  Not so, according to OACT.  By 2019 under Obamacare we will be spending 21.1% of our GDP on health care, versus 20.8% without Obamacare.

And, finally, President Obama says that Obamacare will extend the life of Medicare, now set to go broke in 2017, by five more years.  It won’t, according to a letter from the CBO.  That letter explains to Congress that it can’t cut $500 billion from Medicare and claim to have extended Medicare’s  life by 5 years, while simultaneously using that same $500 billion to insure those who are currently uninsured.

I don’t usually write a post of this length, but, I am growing increasingly tired of hearing claims that are, charitably, well, just untrue.

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The Sound Off Sister was an Assistant United States Attorney for the Southern District of Florida, and special trial attorney for the Department of Justice, Criminal Division; a partner in the Florida law firm of Shutts & Bowen, and an adjunct professor at the University of Miami, School of Law. The Sound Off Sister offers frequent commentary concerning legislation making its way through Congress, including the health reform legislation passed in early 2010.


  1. Anne-EH on March 10, 2010 at 2:39 pm

    President Obama's nose growing longer again, caught in another fib.

  2. brianh on March 11, 2010 at 8:32 am

    …in addition to CLASS act revenue, more of your income is subject to SS tax under the bill and that revenue is included. And as of today, CBO says the "deficit reduction" from the passed Senate bill is down to $118B. Of course, this is essentially based on  10 years of revenue and 6 years of coverage (not care). And how does the bill reduce the 2nd decade? CBO was told to assume that the bill would reduce costs 15-20%! After all, the thousands of pages of beauracracy in the bill and what's to follow from H&HS, must reduce cost 🙂 Yeah, right.

    P.S. Anne, When I see Obama speak, I do envision his nose growing 🙂

  3. Dimsdale on March 11, 2010 at 4:39 pm

    "…..I am perplexed by the President’s comments."


    Why?  After more than a year of misrepresentation, misdirection, obfuscation, Obama style transparency, hyperbole, exaggeration, spin, broken promises and pledges, and yes, outright lying, I would almost be disappointed if the guy or his mouthpiece, Baghdad Bob Gibbs, told the truth.  I would probably faint away, to tell the truth.


    The real crime is the mainstream media rolling over on its back like a puppy (or worse analogies), regurgitating everything the White House tells them to.  It would have been trivial for them to have done what you did, with their money and resources, but they just can't seem to do it.  I watched the perky one dutifully report the "Obamacare will reduce everyone’s premiums" pablum without blinking an over mascaraed eye.


    As George Costanza once said, "it's not lying if you believe it's the truth".  Too bad belief has trumped investigative journalism.

  4. mike on March 12, 2010 at 5:40 am

    The other day Obama quoted some report put together by the brain trusts at Goldman Sachs which stated how much money the health insurance industry made last year.  What Goldman and Obama didn't say is that close to $3 Billion of this profit was a one time gain by one of the insurance companies due to the sale of one of its subs.  And wasn't Obama bashing Goldman a month or two back calling them fat cat bankers.  What was Goldman's profit last year.  And remember Goldman received $20 BILLION from us the US taxpayer because they bet wrong on credit default swaps with AIG.  And also remember Jim Himes who represents Fairfield County worked for Goldman.  He doesn't like to tell us.  He tells us he worked on Wall Street

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