Health Reform Could Cost More than First Thought

June 15th, 2010 | Sources: Washington Post

Subjects:

The recently enacted health reform law could cost taxpayers $115 billion more over the next decade than originally proposed, if Congress approves all spending proposals outlined in the legislation, according to the Congressional Budget Office.

Smoking Genie LampThe increase would push overall costs of the law beyond $1 trillion, an amount the Obama administration has tried desperately to stay under.

The new law extends health coverage 30 million people that are currently uninsured, primarily through tax credits that can be used to purchase insurance via competitive markets that are scheduled to begin operations in 2014. The law was signed by President Obama on March 23 following a CBO estimate that it would cost $938 billion over the next decade, even as it cut the federal deficit by $143 billion.

According to the CBO, the incremental spending includes $10-20 billion in administrative costs, $39 billion directed at Native American health care programs, and $34 billion for local health centers.

Apparently, most folks knew about these additions before the law was passed, but they were not included because the spending was discretionary. Congressional Republican had argued that they should have been.

“Congress does not always act on authorizations that are put into legislation by drafters,” Kenneth Baer, a CBO spokesperson told the Washington Post. “Authorizations for discretionary spending are not expenditures.”

In its recent update, the CBO also mentioned that costs of the law could be higher still, since the law approved several programs for which specific funding levels have yet to be established.

Baer did suggest that the president would stipulate that any added spending would have to be offset by reductions in other programs. “The president made clear he will enforce that with his veto pen,” Baer told the Post.


 

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