PoliGraph: Bills health care law claim leaves out key details

Last weekend, Republicans endorsed Rep. Kurt Bills to run against U.S. Sen. Amy Klobuchar this fall. If elected, Bills says cutting government spending will be one of his top priorities.

To stress just how bad things have gotten in Washington, D.C., Bills pointed to the rising cost of the new health care law.

“You have to look at Obamacare that was projected to spend $800, $900 billion and is now at $1.7 trillion,” Bills told MPR’s Mark Zdechlik in an interview May 21.

It’s true that the latest gross cost estimate of the new health care law is about $1.7 trillion, but that’s only part of the story.

The Evidence

To make his case, Bills relied on a recent estimate from the non-partisan Congressional Budget Office that pegged the gross cost of the health care law at about $1.76 trillion between 2012 and 2022.

In 2010, the CBO projected the gross cost of the law to be $938 billion between 2010 and 2019. In part, the initial 10-year cost was lower because many of the law’s key provisions don’t go into effect until 2014, ramping up in subsequent years.

But Bills’ claim leaves out an important point.

The health care law also collects new revenue to help pay for it, including fees paid by those who don’t have insurance and some employers who don’t offer coverage, taxes on top earners and provisions meant to slow the growth of Medicare, among other offsets.

Taking that new revenue into account, the CBO estimates the current net cost of the health care to be $1.25 trillion between 2012 and 2022.

So, the cost of the bill has gone up, but not by as much as Bills said.

Other fact-checking organizations and the Washington Post’s liberal blogger Ezra Klein also point out that the initial CBO estimate and the latest CBO estimate look at the law’s cost over different spans of time. An apples-to-apples comparison of the years 2012-2019, which both CBO reports cover, shows that the net cost has actually declined from $784 billion to $768 billion.

The Verdict

Bills used a gross figure to make his case that the cost of the health care law is growing faster than earlier projected. But he neglects the fact that the net 11-year cost is lower, and that earlier projections were pegged to a different time frame.

The PoliGraph verdict: misleading.

SOURCES

MPR News, Paul-backed Senate candidate: ‘I’m a Kurt Bills Republican’, by Mark Zdechlik, May 21, 2012

The Congressional Budget Office, Updated Estimates for the Insurance Coverage

Provisions of the Affordable Care Act, March 2012

The Congressional Budget Office, Selected CBO Publications Related to Health Care Legislation, 2009-2010, December 2010

PolitiFact Virginia, Rep. Robert Hurt says $900 million health reform price tag has swelled to $1.8 trillion, by Nancy Madsen, March 26, 2012

The Washington Post, No, the CBO hasn’t doubled its cost estimate for health-care reform, by Ezra Klein, March 20, 2012

Factcheck.org, Health Care Costs Didn’t Double, by Lori Robertson and Dave Bloom, March 16, 2012

Mike Osskopp, spokesman for Kurt Bills, May 22, 2012

  • Lars

    It’s important to keep definitions in order. Gross cost is the total ultimate cost to households and firms, including general taxes, taxes on high earners , fees, reductions in services, etc.. The net cost is apparently the portion funded by general tax revenues only. Remember, the government doesn’t generate any wealth. Whatever funds it has at its disposal come from private sources–households and/or firms.

    Gross cost is the correct definition to understand the impact of a government program on the economy. This amount represents the true cost to all taxpayers.

  • http://simplemindedinvestor.com Ross Williams

    “Bills’ claim leaves out an important point.

    The health care law also collects new revenue to help pay for it, including fees paid by those who don’t have insurance and some employers who don’t offer coverage, taxes on top earners”

    I guess its misleading to complain about the high cost of the new Vikings stadium since there is new revenue to help pay for it. Or to complain about the rising cost of health care, since there is rising revenue to help pay for it. This seems to be a defense of the health care law, rather than addressing the factual basis for Bill’s actual point about government spending.

    Frankly, almost everything in the news is misleading using this standard. Including your report here.

    The real issue of cost is too complicated for a news story. That is that most of the costs of health care are being paid by someone. There is very little new treatment that will be provided by universal coverage. If anything, Obamacare reduces the total cost by encouraging earlier, less expensive treatment in place of expensive emergency room visits and intensive care treatment.

  • humen007

    Is this the same healthcare bill that the President assured us that if the cost was over ONE TRILLION, he would veto it?