Obama Doubles Estimate to $4 Billion for Health Exchanges

[Purveyor]

Source: Bloomberg

By Alex Wayne - Apr 10, 2013

The state health exchanges that are central to the U.S. Affordable Care Act are costing the federal government more than twice its initial budget to complete.

The Obama administration expects to have spent $4.4 billion in fiscal 2012 and 2013 on grants to states that are building new marketplaces to sell subsidized health insurance, according to budget proposals released today for 2014. A year ago, the administration had anticipated spending about $2 billion.

Including grants the administration expects to make in 2014, costs for the state-run exchanges will reach about $5.7 billion. The budget overrun doesn’t include the extra money needed to set up a “Federally Facilitated Exchange” in 34 states that chose not to cooperate with President Barack Obama’s initiative.

“It’s a lot more complicated than anybody imagined,” Joseph Antos, a health economist at the nonprofit American Enterprise Institute who advises the Congressional Budget Office, said in a telephone interview. “To be fair to CBO, this is one of the many areas where they didn’t know how big the bread box was, much less what was in it.”

Read more: http://www.bloomberg.com/news/2013-04-10/obama-doubles-estimate-to-4-billion-for-health-exchanges.html

[antigop]

1. A health economist from the AEI advises the CBO --- who knew? nt

[Kolesar]

3. On how to assess a health plan drafted by the RW Heritage Foundation...eom

[hughee99]

2. If I recall correctly, all this was supposed to SAVE money and keep health care costs down

when does any of that start happening?

[Kolesar]

4. My brother might have lived if he could have got onto Medicaid

But his combined income of $24,000 including my mother's SS check meant that they were too "wealthy" to qualify for Medicaid.

[hughee99]

5. This is absolutely assinine.

I'm very sorry for your brother. It seems like many issues aren't getting resolved, everyone is still unhappy with the system AND it's costing much more than anticipated. If all the old projections are way off and we're going to end up spending far more than planned anyway, they should just do it right and go to a single payer system.

[Kolesar]

7. What, $2 Billion is going to blow up the budget?

You are jumping context.

[hughee99]

9. No, this is just another example of something that costs more than initially projected

or "savings" that never materialized. If the numbers put together in the original ACA legislation are off by such a significant percentage, how can we trust the other numbers (how much it will cost, how much people will save, etc...). If this is all going to cost much more than expected anyway, and we're going to end up spending the money anyway, why not do it right and just put in single payer?

[Kolesar]

11. There's the jump in context

why not do it right and just put in single payer?

Are you asking me why not? Gee, golly, it wasn't my decision.

Lugubrious malaise is such a joy. Carry on

[dpibel]

8. Seriously?

Total health care spending in the U.S. exceeds $2.5 trillion a year and you're sad about a $2 billion overrun on setting up a new program?

So far, the cost has averaged $2.2 billion a year for two years. In the same time, we've spent about a trillion on the military. Which one should I be worried about?

[hughee99]

10. I'm talking about being off on a projection by 100%.

and it's not just this projection. Worry about the military all you want, but keep in mind that the ACA is going to cost FAR more than they told you it would, and if we're going to spend that money anyway, why not have a GOOD system instead?

[Kolesar]

12. Really, how FAR more? eom

[hughee99]

13. The ACA projected about 1.2 trillion from 2012-2022

but most of the real costs kick in after everything is fully implemented so for the first 3 or 4 years, you're spreading the costs over those years, but not the full benefits. If your off by 100% there, now you're talking about spending not 1.2 trillion for 10 years of benefits, but 2.4 trillion for what is, in effect, only about 6 years of benefits.

[dpibel]

16. Logical leap

You are looking at one tiny subunit of the whole program and acting as if it proves that the entire thing will cost twice as much as projected. That's quite a trick.

BTW: I'm not a fan of ACA. I have long favored single-payer; I thought that eliminating the public option without getting anything in exchange was terrible. Not only that, part of the fiscal cliff deal was cutting off funding for state health care cooperatives. All of which indicates that the insurance companies are terrified of anything that will show how ravenous they are.

All I'm objecting to here is your spreading FUD based on one piddly bit of money. That's just silly.

[dpibel]

15. What's your source?

You are stating as an absolute fact that the ACA is going to cost far more than projected. What is your source for this unimpeachable fact?

[hughee99]

17. Up to this point, I'm not aware of anything in the ACA that has cost less than projected.

A number of things have cost considerably more and health care costs in general have skyrocketed (which didn't seem to be in the original plan at all). I'm unclear as to why anyone would believe the original cost estimates were anything more than low-ball estimates at best in order to get this through congress. It's certainly not an ABSOLUTE fact it will cost more, though. It's possible that health care costs could drop through the floor, or a meteor made out of money could fall from the sky enabling everyone to easily afford care, but I'm not counting on either of those things happening. As to how much more it could cost, that's just speculation on my part.

[dpibel]

18. Please list

Since the vast majority of the ACA has yet to take effect, please specify the "number of things" that "have cost considerably more."

As for skyrocketing health care costs, you're saying that they've skyrocketed since the passage of the ACA? Because that's the only sense I can make out of &quot which didn't seem to be in the original plan at all)."

In fact, the original plan was sold in part as a way to rein in skyrocketing health care costs, and there were studies from the CBO that said it would do just that.

And, if I'm not mistaken, the growth rate in health care costs has actually slowed in the last few years. See, e.g.,

"A sharp and surprisingly persistent slowdown in the growth of health care costs is helping to narrow the federal deficit, leaving budget experts trying to figure out whether the trend will last and how much the slower growth could help alleviate the country’s long-term fiscal problems."

So your information seems to be a little out of date.

[hughee99]

19. Here's some links

"CBO Estimates ACA to Cost $54 Billion More Than Expected Between 2012 and 2021"
http://www.calhospital.org/cbo-releases-budget-projections

Here's the CBO report.
http://www.cbo.gov/sites/default/files/cbofiles/attachments/03-13-Coverage%20Estimates.pdf

As most of these overruns are still projected (since, as you said, it's not implemented yet) most of the other projections are from RW sources that I won't post or even attempt to claim are credible here.

As far as dropping rates go...
"Health insurance rate increases threaten seniors"
http://www.sfgate.com/opinion/editorials/article/Health-insurance-rate-increases-threaten-seniors-4307770.php

"Health insurance to rise 20% or more in California"
http://www.nbcnews.com/video/nightly-news/50403478#50403478

"ObamaCare's Health-Insurance Sticker Shock" (yes, its WSJ, so I take it's doom and gloom with a grain of salt)
http://online.wsj.com/article/SB10001424127887323936804578227890968100984.html

Dianne Feinstein fighting outrageous health insurance rate hikes
http://www.mercurynews.com/opinion/ci_22773661/mercury-news-editorial-feinstein-fighting-outrageous-health-insurance

"ACA will push up premiums for individuals"
http://news.nurse.com/article/20130327/NATIONAL02/104010014

Here's some thoughts as to what they COULD do to limit those rates, but none of this is implemented yet.
http://www.nytimes.com/2013/04/05/us/politics/commission-gives-insight-on-expected-health-increases.html




Overall, the federal government is still leaving the health care system largely in the hands of private, for-profit companies. To me, anyway, I can't see how this could possibly stay even close to the initial projections.

[Skip Intro]

6. If it lowers costs, covers uninsured, and maintains quality, it is a success.

If it falls short of doing that, it is a failure, will sink Dems for many elections to come, and permanently mar Obama's legacy.

We'll find out soon enough, but what I'm reading these days sounds like something other than success.

[Cal Carpenter]

14. And all these exchanges do is facilitate purchase of insurance

Just to make sure we are all clear on this. These exchanges are for consumers to compare and choose from primarily for-profit health insurance corporations.

More money that is not going to actual health CARE.

This is a giveaway service to the insurance companies. It's like having Travelocity for overpriced health insurance. At taxpayer expense.

[area51]

21. +1

From the OP:

"It’s a lot more complicated than anybody imagined,"

Well, there's a cure for that ... SINGLE PAYER!

[quadrature]

20. what happens on an exchange, ...

that can't be done on EBAY?