Affordable Care Act Reduces The Deficit

The ad’s claim that Obamacare “adds $700 billion to the deficit” cites the House Budget Committee on September 29, 2010. In fact, the citation refers to a report “by the Republican Staff” of the committee, which was prepared on behalf of Ranking Republican Paul Ryan. 

CBO: The Affordable Care Act Will Reduce Deficits By Over $200 Billion From 2012-2021. According to Congressional Budget Office Director Douglas Elmendorf’s testimony before the House on March 30, 2011: “CBO and JCT’s most recent comprehensive estimate of the budgetary impact of PPACA and the Reconciliation Act was in relation to an estimate prepared for H.R. 2, the Repealing the Job-Killing Health Care Law Act, as passed by the House of Representatives on January 19, 2011. H.R. 2 would repeal the health care provisions of those laws. CBO and JCT estimated that repealing PPACA and the health-related provisions of the Reconciliation Act would produce a net increase in federal deficits of $210 billion over the 2012–2021 period as a result of changes in direct spending and revenues. Reversing the sign of the estimate released in February provides an approximate estimate of the impact over that period of enacting those provisions. Therefore, CBO and JCT effectively estimated in February that PPACA and the health-related provisions of the Reconciliation Act will produce a net decrease in federal deficits of $210 billion over the 2012–2021 period as a result of changes in direct spending and revenues.” [“CBO’s Analysis of the Major Health Care Legislation Enacted in March 2010,” CBO.gov, 3/30/11]

• July 2012 Report Affirmed Projection That ACA Will Reduce Deficits. According to a Congressional Budget Office Report titled “Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision”: “CBO and JCT have not updated their estimate of the overall budgetary impact of the ACA; previously, they estimated that the law would, on net, reduce budget deficits.” [CBO.gov, July 2012]

FactCheck.org : GOP’s Claim That Obamacare Adds $700 Billion To The Deficit Relies On Faulty “Partisan Analysis.” As FactCheck.org explains, the claim that the Affordable Care Act increases the deficit by $700 billion “relies on a partisan analysis by the House Budget Committee’s Republicans” and depends on false premises:

• It rests largely on a claim that hundreds of billions of dollars in projected Medicare savings are being “double-counted.” But CBO is simply not doing that.
• The GOP’s $700 billion figure also includes more than $200 billion for a permanent “doctor fix” to prevent a cut in Medicare payments to doctors. But that is not even a part of the new law, and many Republicans endorse the “doctor fix” anyway.
• The GOP claims the law will cost $115 billion to administer, but that isn’t true. CBO actually puts those costs at roughly $10 billion to $20 billion over the next 10 years. [FactCheck.org, 1/19/11]

Repeal Would Add More Than $100 Billion To The Debt

CBO: Repealing ACA Would Add $109 Billion To Deficit Between 2013 And 2022. From a letter the Congressional Budget Office sent to House Speaker John Boehner (R-OH): “H.R. 6079 would repeal the ACA, with the exception of one subsection that has no budgetary effect. […]Assuming that H.R. 6079 is enacted near the beginning of fiscal year 2013, CBO and JCT estimate that, on balance, the direct spending and revenue effects of enacting that legislation would cause a net increase in federal budget deficits of $109 billion over the 2013–2022 period.” [CBO.gov, 7/24/12]

Affordable Care Act Savings Do Not ‘Cut’ Medicare Benefits

Affordable Care Act Reduces Future Medicare Spending, But “Does Not Cut That Money From The Program.” According to PolitiFact: “The legislation aims to slow projected spending on Medicare by more than $500 billion over a 10-year period, but it does not cut that money from the program. Medicare spending will increase over that time frame.”  [PolitiFact.com, 6/28/12]

GOP Plan Kept Most Of The Savings In The Affordable Care Act. According to the Washington Post’s Glenn Kessler: “First of all, under the health care bill, Medicare spending continues to go up year after year. The health care bill tries to identify ways to save money, and so the $500 billion figure comes from the difference over 10 years between anticipated Medicare spending (what is known as ‘the baseline’) and the changes the law makes to reduce spending. […] The savings actually are wrung from health-care providers, not Medicare beneficiaries. These spending reductions presumably would be a good thing, since virtually everyone agrees that Medicare spending is out of control. In the House Republican budget, lawmakers repealed the Obama health care law but retained all but $10 billion of the nearly  $500 billion in Medicare savings, suggesting the actual policies enacted to achieve these spending reductions were not that objectionable to GOP lawmakers.” [WashingtonPost.com, 6/15/11, emphasis added]

Small Tax On Medical Device Manufacturers Pays For Expansion Of Coverage

Tax On Medical Device Manufacturers Is Effectively Just 1.5 Percent. From the Columbus Dispatch article cited by Crossroads GPS ad: “Medical-device manufacturers and their advocates want to eliminate a 2.3 percent excise tax included in the federal health-care overhaul. […] In an industry report in August, Phillip Seligman of Standard & Poor’s said the 2013 start date of the tax gives the industry time to realign its cost structure to remain profitable. Because it’s an excise tax, the tax is deductible for income-tax purposes, making its effective rate about 1.5 percent, he wrote.” [Columbus Dispatch, 5/15/12]

CBPP: Medical Device Manufacturers Are Being Taxed Because Health Care Law Will Increase Their Business. From the Center on Budget and Policy Priorities: “The House will soon consider legislation to repeal the excise tax on medical devices that was enacted to help pay for health reform.  The provision is sound, however, and the industry lobbying campaign aimed at repealing it is based on misinformation and exaggeration. … The medical device industry is not being singled out.  The excise tax is one of several new levies on sectors that will gain business due to health reform.  The expansion of health coverage will increase the demand for medical devices and could offset the effect of the tax.” [CBPP.org, 4/31/12, emphasis original]

Repealing Medical Device Tax Would Cost $29 Billion. From the Center on Budget and Policy Priorities: “The Joint Committee on Taxation estimates that repealing the excise tax would cost $29 billion over the 2013-2022 period.  Repealing the tax would undercut health reform in at least two ways.  Pay-as-you-go procedures would require Congress to offset the cost of repeal by increasing other taxes or reducing spending; one likely target would be the provisions of the Affordable Care Act (ACA) that expand health coverage to 33 million more Americans.  Also, repealing the tax would encourage efforts to repeal other revenue-raising provisions of the ACA, which in turn would either require still more painful offsets or increase the budget deficit (if Congress failed to offset the cost).” [CBPP.org, 4/31/12, internal citation removed]

Repeal Would Have Negative Consequences For Millions

Up To 6.6 Million Young Adults Would Lose Health Care Coverage Through Their Parents’ Plans. From the Los Angeles Times: “President Obama’s healthcare law helped as many as 6.6 million young adults stay on or get on their parents’ health plans in the first year and a half after the law was signed, a new survey indicates. […] Earlier surveys by the federal government found that the number of people ages 19 to 25 without insurance declined after the law was signed, reversing years of erosion in health coverage for young adults.” [Los Angeles Times, 6/8/12]

70,000 Americans With Pre-Existing Conditions Would Lose Insurance Coverage. According to the Department of Health and Human Services, as of May 31, 2012, 73,333 people were enrolled in the Pre-Existing Condition Insurance Plan (PCIP) created by the Affordable Care Act. [HealthCare.gov, 7/13/12]

5.2 Million People Would Have To Pay More For Prescription Drugs. From the Centers for Medicare and Medicaid: “As a result of the Affordable Care Act, over 5.2 million seniors and people with disabilities have saved over $3.9 billion on prescription drugs since the law was enacted.  The Centers for Medicare & Medicaid Services (CMS) also released data today showing that in the first half of 2012, over 1 million people with Medicare saved a total of $687 million on prescription drugs in ‘donut hole’ coverage gap for an average of $629 in savings this year. […] Coverage for both brand name and generic drugs in the gap will continue to increase over time until 2020, when the coverage gap will be closed.” [CMS.gov, 7/25/12]

Over 35 Million Seniors Would Lose Access To Free Preventive Services. The Centers for Medicare and Medicaid Services [CMS] report that 35,106,598 people were enrolled in Medicare Part B in 2011. CMS also reports:

Beginning January 1, 2011, the Affordable Care Act eliminated Part B coinsurance and deductibles for recommended preventive services, including many cancer screenings and key immunizations. The law also added an important new service — an Annual Wellness Visit with a health professional — at no cost to beneficiaries.

According to preliminary numbers, at least 25,720,996 million Americans took advantage of at least one free preventive benefit in Medicare in 2011, including the new Annual Wellness Visit.  This represents 73.3% of Medicare fee-for-service beneficiaries, including 2,404,792 African-American beneficiaries, 537,110 Hispanic beneficiaries, 104,393 American Indian beneficiaries, and 508,398 Asian-American beneficiaries. [CMS.gov, 2/15/12]