The White House celebrations for the twelfth anniversary of the passage of the Affordable Care Act (ACA) remind us that twelve years is a sufficient passage of time to compare the initial claims of the ACA designers and promoters to the actual outcomes and consequences of this massive, partisan, legislation. In the following analysis, I focus on the ACA financing.
The Congressional Budget Office (CBO) estimated on March 20, 2010 that the ACA’s expansion of health insurance coverage would cost the federal government $938 billion from 2010 through 2019. This gross expenditure would consist mainly of subsidies for purchasing insurance on the exchanges, expanding Medicaid eligibility, and enhancing Medicaid cost-sharing with the states. The CBO further estimated that — taking into account the reductions in payments to providers and certain tax features — the ACA would increase the federal budgetary commitment to health care by $390 billion. The health care and revenue provisions actually were estimated to reduce the deficit by $124 billion from 2010 to 2019, and by up to one-half of a percentage point of GDP in the subsequent decade. The financing would come from many sources and new programs, including several new taxes, mainly payroll ones, and spending cuts to Medicare providers. While promoting the ACA in 2009 and 2010, President Obama announced that it would be fully paid for.
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