Over the next decade, the federal government is poised to spend nearly $2 trillion getting people insured under ObamaCare, according to the latest budget projections from the nonpartisan Congressional Budget Office (CBO). That comes to at least $73,814 per covered individual, most of which is not funded by the Affordable Care Act’s (ACA) taxes and penalties despite President Barack Obama’s claim that the law wouldn’t increase the deficit. And to top it all off, it will still leave tens of millions of Americans uninsured.
The CBO’s ObamaCare forecast, created in conjunction with Congress’ Joint Committee on Taxation, projects the budgetary impact of the ACA’s insurance-coverage provisions from 2015 to 2025. The CBO estimates that the total cost of subsidies and other insurance-exchange expenses, additional spending on Medicaid and the Children’s Health Insurance Program (CHIP), and tax credits for small employers will be $1.993 trillion. The agency further estimates that over that same time period, between 24 million and 27 million people will gain coverage that they would not have obtained in the ACA’s absence. Thus, even in the best-case scenario, taxpayers will be soaked for a whopping $73,814 for each individual obtaining coverage under ObamaCare.
Almost half that total cost, $920 billion, is a result of the ACA’s expansion of Medicaid plus the continued funding of CHIP. In 2015, the CBO expects an extra 11 million Medicaid and CHIP enrollees owing to the healthcare law, with annual increases of 13 million to 16 million in subsequent years. Most of the remaining cost comes from exchange subsidies, which are expected to rise from about $5,000 per enrollee in 2016 to almost $8,000 per enrollee in 2025.
At the same time as these costs are increasing rapidly, the CBO estimates that the ACA will only bring in $643 billion to the Treasury, including $164 billion in employer penalties, $47 billion in individual penalties, and $149 billion in excise taxes on high-premium insurance plans. In addition, the agency believes that 9 million to 10 million fewer Americans will have employer-based health insurance by 2025, many of them because their employers simply stop offering it and instead give them higher wages to compensate. Since these higher wages, unlike employer-sponsored insurance, are taxable, the CBO expects the government to garner an additional $292 billion in income and payroll taxes ($284 billion once additional Social Security benefits because of higher wages are taken into account).