The Cost of ObamaCare

The national debt was was over $10.6 trillion when President Barrack Obama took his oath on Inauguration Day, January 20, 2009. It has risen nearly 13% to over $12 trillion on November 25, 2009. It took nearly three years and three months for President Bush to accrue this much debt during his first term in office, while it took Obama only 10 months.

Obama may mean well, but good intentions are not facts. According to the Wall Street Journal article, "ObamaCare's Real Price Tag," the best model for determining the potential cost of ObamaCare is the current Medicare program. When Medicare passed in 1965, the expected cost for 1970 was $3.1 billion. The actual cost was $6.8 billion. In 1967, the expected Medicare cost for 1990 was $12 billion, but the actual cost was closer to $110 billion. That deficit is expected to increase under ObamaCare.

In the New York Times article, "Democrats Say House Bill Cuts Premiums for Many," Robert Pear and Carl Hulse report, "The Congressional Budget Office (CBO) said that middle-income families might be required to pay 15 percent to 18 percent of their income on insurance premiums and co-payments."

According to the CBO statistic, a family making $50,000 per year would pay $7,500 or more per year on insurance premiums and co-payments. This is inline with what a family of four can get from Blue Cross Blue Shield of Michigan's best plan, and the private insurance company would most likely provide better coverage.

According to Martin Feldstein, who was the chairman of the Council of Economic Advisers under President Ronald Reagan, the CBO projects a $1 trillion increase in the federal deficit over the next 10 years under Obama's health care reform plan. Their calculations do not take into consideration the accrued interest of financing $1 trillion dollars, nor do they take into consideration the unexpected behavioral changes of American citizens to higher taxes. Their estimates are also based on an economy that improves each year without any recessions. According to Feldstein, the cost of ObamaCare is more likely to be $2 trillion over the next 10 years. That would make $7,500 seem enticing.

References

Bureau of the Public Debt, U.S. Department of Treasury. (2009). The debt to the penny and who holds it: daily history search application.

Feldstein, M. ObamaCare's crippling deficits. (2009, September 7). The Wall Street Journal.

ObamaCare's real price tag. (2009, August 6). The Wall Street Journal.

Pear, R., & Hulse, C. Democrats say House bill cuts premiums for many. (2009, November 2). The New York Times.