President Obama’s landmark health-care initiative, long touted as a means to control costs, will actually add more than $340 billion to the nation’s budget woes over the next decade, according to a new study by a Republican member of the board that oversees Medicare financing.
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.
The 2010 law does generate both savings and revenue. But much of that
money will flow into the Medicare hospitalization trust fund — and,
under law, the money must be used to pay years of additional benefits to
those who are already insured. That means those savings would not be
available to pay for expanding coverage for the uninsured.
the health-care act worsen the deficit? The answer, I think, is clearly
that it does,” Blahous, a senior research fellow at George Mason
University’s Mercatus Center, said in an interview. “If one asserts that
this law extends the solvency of Medicare, then one is affirming that
this law adds to the deficit. Because the expansion of the Medicare
trust fund and the creation of the new subsidies together create more
spending than existed under prior law.” (Continues)