Medicare Trustee: ObamaCare Will Add $340 Billion to the Deficit

The study is set to be released Tuesday by Charles Blahous, a conservative policy analyst whom Obama approved in 2010 as the GOP trustee for Medicare and Social Security. His analysis challenges the conventional wisdom that the health-care law, which calls for an expensive expansion of coverage for the uninsured beginning in 2014, will nonetheless reduce deficits by raising taxes and cutting payments to Medicare providers.

More from Lori Montgomery in The Washington Post. Democrats respond with personal attacks.

Comments (4)

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  1. Joe Barnett says:

    Washpo says “the health-care law, which provides about $575 billion in Medicare savings…
    But in cost estimates by the nonpartisan CBO, those savings also offset a dramatic expansion of Medicaid under the law, as well as new subsidies for uninsured people to purchase coverage.”

    So they are double-counting alleged savings.

  2. Devon Herrick says:

    There will be no savings from the Affordable Care Act. The bulk of the (projected) savings comes from cutting Medicare physician and hospital fees — something politicians will not follow through with because they know seniors would lose access to care.

    Neither will the pilot projects and demonstration programs produced any savings. On the other hand, the generous subsidies for health plans sold in the state-based exchanges will cause the price of coverage to skyrocket and erode the market for employee health coverage. Blahous is probably underestimating the problem.

  3. Brian says:

    “Medicare is financed in part through a trust fund that receives revenue from payroll taxes

    Does this mean that they will have to raise payroll taxes?

  4. Don Levit says:

    The trust fund does not receive payroll taxes. It was originally designed to collect the excess taxes and leave them in the trust fund exclusively for SS beneficiaries. They even have a fancy name – “special issue nonmarketable Treasuries.” Well, these special issued bonds didn’t grow over the years for the SS beneficiaries, because the principal and interest were used for other current expenses over the years, and lowered the deficits.
    Now, all that remains of the trust fund is a hollowed artifact, an accounting mechanism, which indicates what can be withdrawn from the Treasry’s general funds without an appropriation. It is the same financial transaction – the use of new general revenues – we use for all government expenditures.
    Don Levit