5 Reasons ObamaCare Will Add Far More To Deficits

"This is how a country goes broke. It's also how the economy and jobs are destroyed," Sen. Jeff Sessions said Tuesday in response to a report by the... View Enlarged Image

On Tuesday, Sen. Jeff Sessions touted a government report that blew a $6.2 trillion hole in President Obama's promise that his signature health reform wouldn't add a dime to the deficit.

According to the report by the Government Accountability Office, that promise rested entirely on several cost-control mechanisms in ObamaCare that almost no one thinks will work.

Medicare's trustees, the Congressional Budget Office and even Obama's own chief health care actuary "all expressed concerns about whether certain cost-containment mechanisms ... can be sustained," the GAO said.

The law, for example, assumes that economywide gains in productivity will justify slashing Medicare provider payments.

But as the GAO points out, health care has never kept track with such gains because of the "labor intensive nature of the industry and the individual customization of treatments."

Other cost saving measures, the GAO points out, are based on ideas that haven't even been tested, such as the so-called "accountable care organizations."

Then there's the cap on subsidies offered through ObamaCare's new insurance exchanges.

Under the law, those subsidies are supposed to top off at 0.5% of GDP, but the GAO — reasonably — believes this cap won't hold.

When you strip out these unrealistic cost control measures, ObamaCare ends up adding $6.2 trillion to federal deficits over the next 75 years, the GAO concludes, accelerating the nation's drive toward the real fiscal cliff.

The GAO has been issuing warnings about ObamaCare's shaky budget assumptions for a while now, but this is the first time it's put a concrete number against it.

Still, bad as this $6.2 trillion deficit boost is, the real figure is likely to be much higher, since the GAO is still being far too optimistic about the rest of ObamaCare.

Here are five big assumptions the GAO makes that aren't likely to hold true.

• Medicare cost controls somehow work until 2020. Even though the GAO figures ObamaCare's Medicare cuts are unrealistic, it still assumes the cuts take effect for the next seven years, and only then "begin to phase out."

• Per-capita health spending growth stays unusually low. Over the past 35 years, health spending has climbed 2% faster than GDP per capita. Yet the GAO assumes that this "excess growth" rate will be just 1% for ObamaCare programs going forward. If it's 2%, ObamaCare's long-term costs explode.

• Businesses don't drop coverage. The GAO also assumes that businesses won't abandon health benefits to save money.

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