Politics

Heritage: Obamacare delay costs $10 billion, at least

Neil Munro
White House Correspondent

The government’s treasury will lose $10 billion because of the White House’s decision to not enforce the employer portion of its hard-won Obamacare law, according to the Congressional Budget Office report.

The decision will also drop a $2,000 penalty for every employee they dump into the taxpayer-funded Obamacare system, according to Chris Jacobs, a senior policy analyst at the conservative Heritage Foundation.

The White House’s decision to delay the penalties “is a way for firms to privatize gains and socialize losses,” said Jacobs. “What you’re doing is giving the business community carte blanche here,” he said.

If many companies begin dumping patients, the cost to taxpayers could reach $1 trillion over 10 years, he said.

Companies will get this opportunity to dump patients if the government-subsidized health-care exchanges open in October, as scheduled, he said.

News reports say cities have already started to dump their retirees into the taxpayer funded system, Jacobs said. Detroit is trying to save itself $150 million per year by dumping retirees, he said.

In May, the CBO report predicted the government would get $10 billion in fiscal year 2015 from penalties assessed in 2014 on companies that don’t provide health-care insurance to their employees.

The prediction is found in table 2 of the CBO’s May 2013 report, “Estimate of the Budgetary Effects of the Insurance Coverage Provisions Contained in the Affordable Care Act.”

When the law was passed, the White House touted the penalty as a way to pressure companies to provide health-care insurance to their employees.

Without the penalty, many companies can save money by telling employees to get their health-care on government-subsidized exchanges, which begin operating in October, according to the White House’s schedule.

Companies are under increasing pressure to dump patients because health-care costs are rising.

In 2012, the CBO estimated “that a typical family health insurance policy purchased through an employer will cost about $20,000 in 2016 and that the typical premiums for the second-lowest-cost silver plan available through the exchanges for that family will be about $15,400.”

Overall, the Obamacare law transfers insurance premiums from younger and healthier Americans to reduce the costs paid by families, older Americans and sick people.

Mass-dumping would drive up the total cost of the Obamacare law, but also increase government’s power over the health-sector.

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