The Patient Protection and Affordable Care Act will increase deficits over the next decade by between $346 billion and $527 billion, according to a new study by a Medicare trustee.
Charles Blahous, who was appointed by President Obama as a Republican trustee for Medicare and Social Security, wrote his research paper for the Mercatus Center at George Mason University, where he is a research fellow.
His study conflicts with what the Congressional Budget Office has said—that the law will help reduce the deficit. Blahous argues that the CBO's report double counts elements of proposed Medicare savings and doesn't "fully illuminate" the financial impact of the law.
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Moreover, Blahous says, there's substantial risk the law's costsaving provisions won't be enforced as currently specified.
"To avoid worsening the federal fiscal outlook, legislative corrections are required before the ACA's provisions become fully effective in 2014," he writes. "Roughly two-thirds of the law's subsidies for health insurance exchanges must be eliminated to avoid worsening federal deficits and the entirety of their costs eliminated to avoid further increasing federal health care financing commitments."
Blahous also points to the CLASS Act—predicted to have generated as much as $86 billion in new revenue over its first 10 years—which was eliminated after the administration said the long-term care program wasn't workable.
The White House blasted the study in a blog post Monday, saying Blahous's claim is "another brand of new math." Jeanne Lambrew, deputy assistant to the president for health policy, also pointed to Blahous's political ties, as he served as deputy director of George W. Bush's National Economic Council.
"We are reading about another brand of new math in describing how the Affordable Care Act will affect our nation's Federal budget deficit," she wrote. "In another attempt to refight the battles of the past, one former Bush Administration official is wrongly claiming that some of the savings in the Affordable Care Act are "double-counted" and that the law actually increases the deficit. This claim is false."
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