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Obamacare Is an Entitlement Disaster

1:09 PM, May 25, 2011 • By JEFFREY H. ANDERSON
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In June 2009, President Obama said, “Medicare and Medicaid are the single biggest drivers of the federal deficit and the federal debt by a huge margin.” Two years later, Paul Ryan and the House Republicans have advanced a serious proposal to deal with these two biggest drivers of our debt. Obama and his party could have embraced aspects of Ryan’s proposal, which builds on recommendations advanced by Democrats during the Clinton years, or they could have offered a serious proposal of their own. Instead, however, they seem to view Ryan’s plan as a political panacea — something to distract voters from their own lack of leadership on entitlements, their own lack of seriousness on deficits, and their own lack of judgment in ramming through Obamacare.

Obama SOTU

But although Democrats and their allies are now consumed with their Mediscare offensive, they still need to answer for the effects that Obamacare would have on entitlements. In addition to its detrimental impact on Americans’ freedom, Obamacare would affect our entitlement equation in two major ways: First, it would explode Medicaid spending. Second, and even more importantly, it would launch a massive new entitlement program and would loot from already barely solvent Medicare to pay for it. Progressives like to claim that Republicans want to advance their plans on the backs of seniors, but the same could be said, much more honestly, about Obamacare.   

Let’s take Medicaid first. The chief actuary for Medicare and Medicaid, who works in the Obama administration, says that, without Obamacare, there would be 61 million people on Medicaid in 2014, the same number that there are today. With Obamacare, he says there will be 84 million people on Medicaid in 2014 (see Table 2). That’s right:  Obamacare would dump 23 million people onto the rolls of Medicaid — one of the two “biggest drivers” of our debt. (You hardly hear Obama talk about it, but this is a large part of how Obamacare would decrease the number of uninsured.)   

In the process, the Congressional Budget Office (partly here, partly here) says that Obamacare would increase Medicaid spending by nearly $1 trillion over Obamacare’s real first decade (2014 to 2023). How would we pay for these nearly 13 figures of new spending? The CBO says that Obamacare would include enough new taxes and fines — levied for such transgressions as American citizens refusing to buy government approved health insurance — to raise that colossal sum. Of course, that $1 trillion or so could otherwise be used to reduce our deficits or pay down our national debt.

Meanwhile, Obamacare would launch a massive new entitlement program on top of its Medicaid expansion. How would we pay for this? Well, the CBO (partly here, partly here) says that about $1 trillion would be looted from Medicare (from 2014 to 2023) and spent on Obamacare. Moreover, Obamacare’s raid of Medicare would affect current Medicare beneficiaries. (Ryan’s proposed Medicare reforms, which would extend Medicare’s life rather than using it as a piggy bank to fund a new entitlement program, would not affect anyone currently over 55.) 

In his statement in the recently released Medicare Trustees’ Report (p. 265), the Obama administration’s Medicare chief actuary describes the future of Medicare under Obamacare (emphasis added):

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