CBO raises estimate of those hit by Obama health care tax
Congress‘ official scorekeeper said Wednesday that 30 million people will be uninsured when President Obama’s health care law goes fully into effect, including six million Americans who are expected to pay a tax penalty — about two million more than originally forecast when the law was passed in 2010.
After initially predicting that the law would leave just 21 million lacking health insurance, the Congressional Budget Office has raised its estimate, blaming the slow economy, changes Congress has made to the law and states who said they’ll refuse to expand their Medicaid programs after the Supreme Court said they don’t have to.
The upside for the government is that it will collect more revenue to help pay for the health care law. With two million more Americans expected to pay the penalty, the CBO predicted $3 billion more in collections each year — about $7 billion in 2016, and $8 billion a year thereafter.
But the new projections could also undermine a key goal of President Obama in the new health care law, which aimed to extend coverage to most Americans.
And it gave Republicans an opportunity to recite one of their favorite criticisms of the law — that President Obama is taxing middle-class Americans by penalizing them for failing to buy coverage.
“For years, the president and his Democrat allies in Congress have sworn up and down that failing to comply with the individual mandate did not result in a tax on individuals or families,” said Senate Minority Leader Mitch McConnell, Kentucky Republican. “Now the nonpartisan CBO makes clear that the tax will hit 6 million Americans — mainly middle-class individuals and families.”
The GOP picked up on that attack last summer, when the Supreme Court upheld most of the law on a 5-4 vote by ruling that the penalty for failing to buy coverage actually counts as a tax.
Without the health care law, about 56 million residents were expected to be uninsured by 2016. Of the 30 million now expected to remain without coverage, most aren’t subject to the penalty, either because they don’t earn enough to file a tax return or because their premiums would exceed a specified portion of their income. Undocumented immigrants and members of Indian tribes are also exempt.
The Obama administration said the CBO analysis confirms what they’ve been saying all along — that most Americans who remain uninsured won’t be subject to the penalty.
“This report confirms that more than 98 percent of Americans won’t be affected by this penalty,” said a spokesperson for the Department of Health and Human Services. “And this update doesn’t change the basic fact that the individual responsibility policy will only affect people who can afford health care but choose not to buy it.”
Republicans were also faced with evidence on Wednesday that their dire predictions about the Medicare Advantage program under the health care law aren’t coming true — at least for now.
The Center for Medicare and Medicaid Services said it expects Medicare Advantage, which subsidizes private health insurance plans for seniors beyond the basic Medicare coverage, to grow more popular and premiums to remain steady next year, despite GOP accusations that the health care law’s cuts to the program will cripple it.
Enrollment in the program is projected to grow by 11 percent in 2013, while premiums are expected to inch up by less than 5 percent on average, the agency said.
Republicans charged that the predictions were misleading, pointing to findings by federal investigators that the administration has effectively delayed cuts to the program by making a bonus program more generous than it was originally intended to be.
But the Obama administration credited the health care law for Medicare Advantage’s growing popularity, pointing out that enrollment has risen by 28 percent and premiums have fallen by 10 percent since it was passed.
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