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The Low Cost of Obamacare

Forget about “Death Panels” (even though it was PolitiFact’s Lie of the Year). The most pervasive lie about Obamacare is that the ACA costs more than what was estimated.

How pervasive? A recent poll shows that a plurality of Americans (42%) believe that Obamacare has cost “more than expected”. Only 10% think it cost “about what was expected” and half that (5%) think it cost “less than what was expected”. That’s right, only 5% knew the right answer. In fact, the cost of the ACA has dropped five times in five years. Twice in the past year alone, the Congressional Budget Office has revised its estimated spending on the Affordable Care Act downward.

How can that be? After all the ACA provides generous subsidies for individuals purchasing health insurance and expanded Medicaid dramatically. Shouldn’t that cost a lot of money?

There are two reasons why Obamacare is costing far less than expected. First the good news — health care costs are growing at a far lower rate than they were before the ACA passed in 2009.

Second (and not as good news), fewer people are participating in Medicaid expansion than expected. This was mostly caused by the Supreme Court ruling that made it possible for states to opt out of Medicaid expansion. And 22 states did opt out (not surprisingly, all of them controlled by Republicans). This saved the federal government money.

To give you an idea of how much the feds are saving on health care costs, the government is spending less on health care now than it predicted in early 2010, and those predictions did not include any spending for Obamacare! And the reduction in health care costs are also reducing what the government is spending on Medicare. So it is fantastic that the ACA’s massive expansion in the number of people receiving health insurance can also result in a massive saving of money.

The only problem is that almost nobody knows the truth. Must be that damn Liberal media!



  1. westomoon wrote:

    Really, this is just a little taste of what US fiscal life would be like if the “net taker” States (the old Confederacy) got their wish and seceded. The Union has been paying them a bevy of reparations for a war they started, and lost, for 150 years now.

    I’m sorry for the people who live in those States and will suffer and die for the sake of insane political principle. But that’s democracy — they really ought to think about pulling together and getting rid of their mad alien leadership.

    Friday, May 29, 2015 at 1:30 pm | Permalink
  2. Iron Knee wrote:

    I often wonder why countries fight civil wars. If the US South had successfully seceded, would things be that bad? I’m sure (eventually) slavery would have ended in the CSA, as it did everywhere else.

    Likewise for the future. For example, why is Canada so worried about Quebec seceding? If a majority of the population really wants to leave, isn’t that what democracy is all about?

    Friday, May 29, 2015 at 3:02 pm | Permalink
  3. Mostly.Generic wrote:

    From the point of view of the Canadian government, all political messiness and turmoil aside, it IS 20% of Canadian GDP and 25% of the population, gone overnight… The short term economic consequences pointed out by some studies made in the 90’s were pretty intense…

    As a French Quebecer, I would really wish that it was more than a majority vote for such an important decision.

    With the kind of government we’re electing provincially, I would certainly not like to see Quebec with it’s own army and international relationships to manage… Let alone making a constitution from scratch and building up the institutions which are currently federal.

    Quebec is a nice place to live in… but I would almost certainly be part of the exodus to Ontario that would follow an successful independence vote… I would expect a surge in xenophobia and public corruption, amongst other things…

    Many would leave, few would flock to us. Oh and the first nations would be rightfully pissed at us…

    Friday, May 29, 2015 at 9:19 pm | Permalink
  4. Iron Knee wrote:

    I think you are making my point. I didn’t get into details about Quebec, but yes, if Quebec seceded, it would be a disaster, but pretty much only for Quebec. Why was the rest of Canada so worried that they kept making concessions to Quebec to keep them?

    Saturday, May 30, 2015 at 10:33 am | Permalink
  5. David Freeman wrote:

    I love living in the South but thank god we lost the Civil War!!!
    Like MostlyGeneric and Quebec, if NC seceded I’d head north in a heartbeat.
    Westomoon, four generations of my family and friends have been pulling together for over 100 years trying to oust our alien leadership. We’re making progress but still have a ways to go. I think a couple more generations will get it done.

    Saturday, May 30, 2015 at 2:18 pm | Permalink
  6. Mostly.Generic wrote:

    Hmmm… I see what you mean. But supposing that the rest of Canada came out of such an event relatively economically unscathed, or even benefit from it in the mid/long term, I’m not sure these kinds of geopolitical schisms can happen without quite a bit of political and sociological tension. I wouldn’t put it past Quebecers to blame Canada for problems that would normally arise out of our independance.

    Kind of like getting dumped by your partner, but still having to live with them because you can’t move out… If you also happen to be in a bad financial position because of it… Well, that’s not a good recipe for peaceful cohabitation 🙂

    Though I’ll readily admit that I’m quite unfamiliar with the concessions that Canada makes to keep us, as you’re saying.

    I’m typically not that interested in the sovereignty debate since it seems so vain to me. I was pretty young during the last referendum and my impression is that the interest for sovereignty in the population has dwindled since then.

    Saturday, May 30, 2015 at 9:08 pm | Permalink
  7. Iron Knee wrote:

    I agree, interest in sovereignty has dwindled in Quebec. But it is still an issue in other places (Scotland, Cyprus, etc.). I’m just more familiar with Quebec having lived in Canada several times.

    You may be too young to remember when Quebec was at the height of their separatist mania. They got laws passed for the whole country requiring labels on all products to be in both French and English, EXCEPT in Quebec where they had to be only in French. My favorite law was when they insisted that air traffic controllers speak French. Airlines immediately stopped flying to Quebec because of the danger, so they had to change that law quickly.

    Sunday, May 31, 2015 at 10:18 am | Permalink