Introduction
Michele Bachmann incorrectly claimed the new health care law is “the largest spending and entitlement program ever passed in our nation’s history.” The nonpartisan Congressional Budget Office estimates that the health care provisions of the law will cost roughly $169 billion in fiscal year 2016, the first year of full implementation. But that’s far less than what Social Security or Medicare or Medicaid each will cost that same year.
The Minnesota Republican and presidential candidate made her claim during a July 28 speech at the National Press Club. In her remarks, which focused on the debt-ceiling crisis, Bachmann reiterated her concern about the ever-growing national debt. In outlining her position, she characterized the health care law signed last year by President Obama as part of the problem.
Bachmann, July 28: I also believe that we must repeal and defund Obamacare as part of any solution to our current debt crisis. Why? Because Obamacare is the largest spending and entitlement program ever passed in our nation’s history.
We asked a Bachmann spokeswoman how the candidate justifies her claim, but got no response. It’s possible she meant to say that the cost of the health care bill when enacted was higher than the cost of other entitlement programs were estimated to be when they were enacted. We can only speculate about that. The fact is, however, that the actual costs of Social Security, Medicare and Medicaid are each far higher than the projected costs of the new health care law.
The full annual cost of the health care law cannot be measured until at least fiscal year 2016, which is when the final provisions that require new federal funding will take effect. By 2016, the CBO projects in table 2 of its report that the gross cost of the insurance provisions will be $169 billion. (The net cost is estimated at $142 billion that year, because of anticipated offsetting revenues, such as penalty payments from individuals who don’t buy insurance and employers who don’t provide insurance.) The $169 billion in gross costs is high, but it pales in comparison to the spending forecasts for Medicare, Social Security or Medicaid in that same year.
CBO projects that Social Security will cost $938 billion in 2016. Medicare will cost roughly $725 billion in total outlays (and $619 billion in net outlays after subtracting Medicare premium payments and other receipts).
Medicaid in 2016 will cost the federal government about $401 billion, CBO projects. (That doesn’t count how much is paid by the states, which kick in about $1 for every $2 spent by the federal government.) Of course, the federal health care law expands Medicaid, so some of the federal increase is due to the health care law. But most of it is not.
The cost of the health care law will continue to rise beyond 2016, but so will costs of the other programs. By 2021, CBO expects the new insurance coverage provisions to total $245 billion in total outlays. But the estimated costs of Medicaid, Medicare and Social Security each will be much higher. Medicaid will be at almost $560 billion in 2021, while Medicare will total nearly $980 billion. Social Security comes out to nearly $1.3 trillion.
The health care law is certainly not cheap. In the first 10 years, the insurance coverage provisions will cost nearly $1.5 trillion, according to the CBO. But it isn’t “the largest spending and entitlement program” in history.
– Dave Bloom, with Eugene Kiely
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