Tuesday, July 24, 2012

Affordable Care Act loses 69% of its deficit-reducing effect in 16 months

In March 2011, CBO said that the law would reduce the deficit by $210 billion over 10 years, despite increasing spending by $1.042 trillion over 10 years, from 2012 until 2021. The new estimate covers 2022. Using the same time frame, repeal would only add $65 billion, CBO said. (On The Money)

To recap:

  • March 2011: Affordable Care Act reduces the deficit by $210 billion over 10 years
  • July 2012: Affordable Care Act reduces the deficit by $65 billion over the same time frame.

There is a $145 billion difference between $210 billion and $65 billion which amounts to a 69 percent loss of effectiveness in how much the Affordable Care Act will reduce the deficit.

Some of the change is attributed to fewer covered and other factors in the Supreme Court ruling.

Nonetheless, watch for the trend to continue.

July 24: CBO Analyses Related to the Affordable Care Act

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