During a Budget Committee Hearing on Tuesday, Sen. Jeff Sessions (R-AL) announced that the Affordable Care Act — which had been projected to reduce the deficit by billions over 10 years — would actually increase long-term debt by $6.2 trillion, undermining administration claims that the law would expand coverage to millions of Americans and help reign in federal spending.
“A new government report dramatically proves that the promises made assuring the nation that the largest new entitlement program in history since Medicare — the president’s health care program — would not add a dime to the long or short term debt of America was false,” Sessions said, referring to a recently released study from the Government Accountability Office (GAO).
“The results of this report confirm everything critics and Republicans have been saying about the health care bill and reveal the dramatic falsehoods that were used to push it to passage.” He went on:
SESSIONS: According to the GAO under a realistic set of assumptions the health care law will increase the deficit by 7/10th percent of GDP or roughly $6.2 trillion over the next 75 years. $6.2 trillion unfunded liability of the United States. In other words, the GAO reveals that the big tax increases in the bill come nowhere close to covering the massive spending.
How is it possible that one report — requested by Sessions — conflicts so starkly with almost all other government assessments to confirm Republican talking points about the law? It’s simple: Sessions designed it that way.
The Alabama senator asked the office to estimate would would happen if the cost containment provisions in the law — the Independent Payment Advisory Board, excise tax on high-cost plans, and reductions in Medicare payments to providers — are “phased out over time” while the coverage provisions remain. Unsurprisingly, the GAO concluded that if the portions of the law that were specifically designed to keep costs under control don’t go into effect, then the law won’t be effective in lowering health care costs. Sessions is touting the government expenditures included in the law — the affordability credits and Medicaid expansion — while ignoring its cost savings. The same report concluded that if “both the expansion of health care coverage and the full implementation and effectiveness of the cost-containment provisions” are sustained, “there was notable improvement in the longer-term outlook.”
To be sure, economists disagree on how best to implement the law’s cost containment provisions. The GAO report notes that the Centers for Medicare & Medicaid Services’ Office of the Actuary has found that providers will not be able to “improve their own productivity to the degree achieved by the economy in large,” proving the savings to be unsustainable. Other economists, however, contend that the actuary doesn’t score savings from preventive care and system modernization and estimate that if those factors are included, the annual growth rate in national health expenditures falls significantly.
The responses of individuals, employers, insurance companies, and Exchange administrators may be hard to predict and Congress may have to adjust the law and its cost containment mechanisms. But for a senator to design a study that purposely underplays the law’s cost controls is not only disingenuous, but also fundamentally misleading and dishonest.
A Congressional source tells ThinkProgress that including Affordable Care Act’s cost containment provisions in the analysis could generate more than $13 trillion in deficit reduction over that same 75-year period.
Page 13 of the report shows how the law’s efficiencies can lower spending on major federal health care programs in the out years: