New Study Questions Cost Efficacy of Health Law


New Study Questions Cost Efficacy of Health Law

Tuesday, April 10th, 2012 - 10:45
Tuesday, April 10, 2012 - 10:23
Conservative analyst claims $340 billion will be added to federal deficit.

The Washington Post reports that instead of providing a net positive of $132 billion per the Congressional Budget Office's (CBO) initial projections when the health reform law was enacted in 2010, Charles Blahous, a conservative policy analyst and the GOP trustee for Medicare and Social Security suggests otherwise. Blahous was put in his position by President Obama. In the wake of the Supreme Court's review of the individual mandate and potentially the entire health care law, Blahous is questioning the validity of the law's cost containment estimates.

The major point of contention is whether the raising of Medicare taxes can, which would traditionally be used to pay for Medicare beneficiaries, can also be applied to covering the millions of newly insured as guaranteed by the ACA. Blahous admits that his budgeting model departs from the typical rules employed in previous government estimates.

The double-counting issue of new Medicare revenues has been raised with actuaries at the CBO and Medicare on recent occasions. Last year, Medicare actuary Rick Foster wrote: "In practice, the improved [trust fund] financing cannot be simultaneously used to finance other federal outlays (such as the coverage expansions) and to extend the trust fund, despite the appearance of this result from" traditional budget rules.