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Bad Math and the Affordable Care Act

Summary: 
The “new math” from opponents of the health care law does not compare the old and new estimates for the same time period. It does not adjust for population growth. It does not take into account inflation. And, most importantly, it is incomplete:

If you’ve followed the public discussion of the Affordable Care Act, you probably have become accustomed to seeing the use of estimates from the Congressional Budget Office (CBO). 

At the time that the Affordable Care Act passed, and a year later, CBO estimated that the health care law in its entirety would reduce the Federal budget deficit over the next decade. And this week, a new report from the Government Accountability Office found that the Affordable Care Act “would have a major effect” on reducing the deficit if implemented as intended. 

This year, CBO also updated estimates for parts of the health care law. They project that:

  • The cost of the coverage provisions will be $50 billion lower from 2012 through 2021 when compared to last year’s estimates, and
  • Private health insurance premiums will be 8 percent lower in 2021 than CBO projected last year.

But some opponents of the law are using this new analysis to claim that the cost of the law has doubled to $1.7 trillion.  This claim is false.  Here’s why: 

The “new math” from opponents of the health care law does not compare the old and new estimates for the same time period.  It does not adjust for population growth.  It does not take into account inflation.  And, most importantly, it is incomplete: it does not count provisions in the Affordable Care Act that save money over time – and which led CBO to conclude that the law would be fully paid for. 

Instead, critics are comparing a 10-year cost estimate to an 8-year cost estimate and characterizing the fact that it is larger as a shocking new finding.  

This is simply bad math. But you don’t have to take my word for it. Instead, check out what CBO has to say when they responded to the claim that the cost of the Affordable Care Act had increased: 

“Some of the commentary on those reports has suggested that CBO and JCT have changed their estimates of the effects of the ACA to a significant degree. That’s not our perspective… 

“For the provisions of the Affordable Care Act related to health insurance coverage, CBO and JCT’s latest estimates are quite similar to the estimates we released when the legislation was being considered in March 2010. . . .  Although the latest projections extend the original ones by three years (corresponding to the shift in the regular 10-year projection period since the ACA was first being developed), the projections for each given year have changed little, on net, since March 2010.” 

CBO also included this chart, showing that the Affordable Care Act does more to reduce the deficit in the years ahead: 

Comparison of the CBO's 2010 and 2011 Estimates of Net Budgetary Impact of the ACA

You can read more of what CBO had to say here. And the next time you hear this claim, you can respond with the facts.