Obamacare's fiscal malady
President Barack Obama offered dubious pitches for his landmark health care reform initiative, including a projected cost of only $940 billion in its first decade. This week, the Congressional Budget Office revised its forecast of the cost for that period to $1.76 trillion. Some number crunchers outside the Beltway warn even that new estimate doesn't adequately account for likely increases in medical expenses.
The president, while pushing his health plan, also repeatedly delivered assurances that if it passed, Americans who liked their current medical coverages could keep them. That pledge has predictably been voided by the huge new obligations the law imposes on employers and insurance companies.
And most of the tab for the reform bill that the president signed two years ago won't even come due until the start of 2014. The White House understandably preferred to postpone those costs until after this year's presidential election.
The administration also has granted more than 1,700 waivers to businesses, unions and other organizations on the practical grounds that they simply can't afford to comply with the so-called Affordable Care Act.
The Supreme Court will hear arguments on the law's constitutionality starting March 26. But there's no disputing the economic reality that the law is, in effect, another huge -- and unsustainable -- federal entitlement. It was even hailed by some of its advocates as "Medicare for all."
Meanwhile, Medicare keeps accelerating toward fiscal oblivion, a long-term trend for which Democrats and Republicans share the blame. The largest financial obligation added to the system since its inception -- a prescription-drug benefit -- was pushed through by Republican President George W. Bush in 2003 with the help of many GOP lawmakers.
At least Republicans are now advocating intriguing health care reforms that they say will save Medicare. On Thursday, South Carolina Sens. Lindsey Graham and Jim DeMint joined fellow Republican Sens. Rand Paul of Kentucky and Mike Lee of Utah in presenting legislation that would extend the Federal Employee Health Benefit program to all seniors. That way, they could enroll in the same health plan as members of Congress and federal employees.
Unfortunately, the bill has no chance of getting through the Democratic-controlled Senate. If it did become law, however, it would cover up to 75 percent of seniors' monthly premiums, and would use means testing to reduce the federal contribution for wealthier Americans. It would also gradually raise the eligibility age.
The senators contend that their bill would save the federal government $1 trillion over the next decade while reducing Medicare's unfunded liability by $16 trillion. That sounds too good to be true, though not as far-fetched as the promises made to sell Obamacare.
But regardless of how you count the costs of the competing proposals, this bottom-line reality is too scary to ignore:
If our elected officials don't find some way to contain soaring health care entitlement costs, our nation's financial prognosis is grim.