Accounting Tricks In Obamacare

Today’s Wall Street Journal (this is the link, but it is subscribers only) reported on an accounting trick used to disguise the actual cost of Obamacare. This is one of those articles I occasionally post that I do not fully understand. Be forewarned.

When the debt forecast was released Tuesday, the Congressional Budget Office (CBO) explained that the Affordable Care Act (Obamacare) subsidies are not indexed over the long term. This means that the numbers are not adjusted as the value of the dollar and the cost of living change. How does that impact the program? In one of two ways–the first is that Congress will intervene (as they do on the AMT to prevent it from impacting less wealthy voters) or that Americans will have to pay a larger part of their every increasing health insurance premiums. Under the first scenario the cost of the program to the government increases greatly, under the second scenario the cost of the program to every American increases greatly. Either way, it doesn’t sound like a good deal.

Unfortunately there has never historically been a government program that shrank instead of grew. Unless Obamacare is overturned by the Supreme Court or repealed by the next Congress, it will be cost nightmare for all Americans.

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