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The Costs of ObamaCare

ObamacareWhoever said that no government program ever comes in at or under budget should get the Nobel Truth Prize. Anyone who expected the trainwreck called ObamaCare to come in on budget and on time needs to have their medication checked. Its time to count the cost of ObamaCare.

Now that it has become clear that the ObamaCare website will not be ready by November 30th, the Democrats are heading for the exits. They all seem to understand that it is a giant boat anchor dragging down their reelection chances.

Now they’re trying to save their phony-baloney jobs, at least the smart ones are. The kool-aid drinkers and true believers are ready to ride this disaster to oblivion, proving once again that some politicians are simply stupid.

Now it’s time to count the cost for this disaster and it doesn’t just include the hundreds of millions of dollars wasted on a non-functioning website.

This misguided attempt to control healthcare costs has turned into a giant black hole for the country. If a large number of older people who generally need more services sign up and are not balanced by healthier younger workers then the costs will rise exponentially.

Why would that be, you might ask? Well, the spread-the-wealth Democrats who wrote this law outsmarted themselves and the American people. In order to attract all demographic segments to ObamaCare they rigged the premiums, charging healthier enrollees more and older, presumably unhealthier, people less.

Surprise, only the unhealthier are signing up while the younger people are taking a wait-and-see attitude. After all they can afford to wait since they use less healthcare services.

Meanwhile, just shy of six weeks to the end of 2013, over 4 million Americans have been told they are losing the insurance they thought would be secure. Many of them do not know whether after January 1 they will still have coverage, or what that coverage will look like.

Doctors and hospitals are in the dark about whether they or their patients will be able to participate in the exchanges. Some doctors are opting out altogether. Premiere institutions like Los Angeles’ Cedars-Sinai are running costly television and radio advertisements encouraging their patients to be sure their hospital is included in their coverage.

Changing the rules after the game has begun is fraught with all financial implications. Karen Ignagni president of America’s Health Insurance Plans did damage control:

“Making sure consumers have secure, affordable coverage is health plans’ top priority. The only reason consumers are getting notices about their current coverage changing is because the ACA requires all policies to cover a broad range of benefits that go beyond what many people choose to purchase today.”

“Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers. Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace. If now fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase and there will be fewer choices for consumers.” 

Yes, if you change the rules now, expect higher premiums later. But remember that this is the administration that announced that insurance for 30 million more people would cost less in total. They also announced that contraception would be provided at no charge by the insurance companies and expected the American people to buy that lie.

Let’s move on to the cost of the ObamaCare website and its related expenses, such as call centers. The often-quoted estimate of $634 million has been challenged by a number of sources.

Government spending is bundled into large contracts that last for years, making it difficult to pinpoint exactly what is spent for what project. For instance, CGI Federal, generally regarded as the main contractor for healthcare.gov, has one such contract that was signed three years before the Affordable Care Act was signed into law and lasts until 2017.

The news release issued by CGI in 2011 touted a contract of $93 million over two years. The entire backbone of the exchanges, such as the data hub was created by Optum/Quality Software Services Inc., a unit of UnitedHealth Group.

In a June report, the Government Accountability Office said that as of March 31, $55 million had been obligated to QSSI for the data hub. GAO says it does not have any updated figures.

The GAO report also lists a number of other contracts related to supporting the federal exchanges, totally $394 million, but the figure includes projects unrelated to the Web site, such as call centers.

The long list of contracts in the appendix of the GAO report does not give enough detail to fully determine which contracts are directly related to the Web site, though at a glance you could reduce the total to at least $350 million.

In testimony on Capitol Hill, Health and Human Services Secretary Kathleen Sebelius said, in response to a direct question: “Congresswoman, we have spent about $118 million on the website itself, and about $56 million has been expended on other IT to support the web.” That adds up to $174 million and counting.

But that figure does not include the costs incurred in government employee’s salaries and other costs hidden within the Federal budget. It will require an army of accountants with subpoena powers to dig through the piles of government contracts. Don’t hold your breath.

Finally, the costs of ObamaCare to the American economy are staggering but unable to be counted as yet.

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Name: Richard Billies

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