Surprise! New Stanford University study finds costs of Obamacare higher than estimated

I’m just kidding. I’m not surprised. Here’s the story from Reason magazine.

Excerpt:

Obamacare could cost a lot more than the official estimates, according to a new study by researchers at Stanford University.

That’s because the law will create big incentives for employers to drop worker health coverage so that employees can get health insurance through the law’s insurance exchanges. Anyone who buys insurance through an exchange and has a household income between 133 and 400 percent of the poverty line is eligible for publicly funded subsidies. So if a lot more people than expected end up in the exchanges, that means a lot more subsidies — and a much higher total cost for the law.

The study, published this week in the journal Health Affairs, estimates that some 37 million people would benefit from shifting out of employer coverage and into exchanges. What “benefit” means, in this case, is that those people would be better off getting cash from their employer instead of coverage, and then buying subsidized coverage on the exchanges.

If all 37 million people in this category were to switch into exchange-based coverage, it would result in a dramatic increase in the law’s cost: about $132 billion annually in additional federal outlays, according to the study.

[…]The paper concludes with a warning: policy makers “should plan for the possibility that the exchange subsidies may end up costing the federal government much more than currently projected.”

It’s a warning they should take seriously. It’s also one they ought to have heard before. Former Congressional Budget Office director Douglas Holtz-Eakin and James Capretta of the Ethics and Public Policy Center have been sounding this alarm for years. Back in 2010, they estimated that, because of the law’s incentives to drop coverage, 35 million more Americans than expected could end up in subsidized coverage through the exchanges.

On election day in 2012, I wrote this post that quoted Investors Business Daily’s warning about Obamacare:

Despite repeated promises that the more we knew about ObamaCare, the more we’d like it, the law has never been less popular. Just 38% now approve of it, down from 46% when it passed in March 2010, according to the latest Kaiser Family Foundation survey.

But unless voters defeat Obama on Tuesday, they’ll never get rid of his disastrous “reform.” Even before ObamaCare takes full effect, its damage is evident.

Insurance premiums, which Obama promised to slash $2,500 by the end of his first term, have climbed 14% since the law went into effect. Nearly six in 10 doctors say ObamaCare has made them less positive about the future of health care in America, and almost two-thirds say they’d retire today if they could, according to a Physicians Foundation survey.

Businesses are holding back on hiring, or are shifting workers to part time because of ObamaCare’s looming coverage mandate. Darden Restaurants, for example, has stopped offering full-time schedules at several of its popular eateries “to help us address the cost implications of health care reform.”

This is only one of the horrors ObamaCare will unleash if fully implemented in 2014. Among others:

  • ObamaCare will force as many as 20 million workers into government-run insurance exchanges after their employers drop coverage, according to the Congressional Budget Office.
  • More companies will follow Darden’s example, refusing to schedule workers more than 30 hours wherever they can to avoid the coverage mandate.
  • Insurance costs will explode. Even ObamaCare’s fans admit that its benefit mandates, marketplace rules and bans on coverage caps will force premiums to skyrocket. Jonathan Gruber, who helped design ObamaCare, says the law will add 30% to premiums in the individual market in the states he’s studied.
  • Doctor shortages will reach 90,000 in about a decade, according to the Association of American Medical Colleges.
  • Seniors will find it increasingly difficult to get treatments, as ObamaCare’s deep Medicare payment cuts cause one in six hospitals to become unprofitable and still more doctors to refuse to see Medicare patients.
  • Even when a patient does get to see a doctor, ObamaCare will intrude, using the law’s “Patient-Centered Outcomes Research Institute” to create top-down rules for what doctors can prescribe for any given ailment.
  • ObamaCare’s vast new taxes — including a crippling $20 billion surtax on the medical device industry and a $123 billion surtax on investors — will slow down medical innovation.
  • And when these and dozens of other new taxes fail to cover ObamaCare’s massive 10-year $1.76 trillion price tag, everyone will suffer a bigger tax bite.

Not to mention the fact that ObamaCare will, for the first time in our nation’s history, force people to buy a government-approved product, setting a frightening new precedent for federal intrusiveness.

That’s a warning that we should have heeded as voters in the 2012 election. But we didn’t. And 2014 is almost here.

Look, even when a person means well and wants to help others, if they don’t know what to do to help others, then we shouldn’t put them in charge. The best way to tell if someone knows how to do what they say they want to do is to look at their record and see if they have been able to do what they say they want to do in the past. That’s what a job interview is – it’s when the people doing the hiring look at the candidate’s record – not his rhetoric – and decide whether to hire him to do certain specific tasks. The requirements of the job should be key to the decision of whether to hire or not. Obama had no experience passing health care laws that lowered costs, improved access, and so on. He had never done anything remotely like that in all of his life. If we wanted to fix health care, then we should hire people like Bobby Jindal. People who know how to do the work because they’ve actually done the work before.

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