First Year Shows “Reform’s” True Costs

By: Carl Graham, President, Montana Policy Institute and Michael Tanner, Senior Fellow, CATO Institute

In the days before the new health care law passed Congress last year, then-House Speaker Nancy Pelosi famously said that we would “have to pass the bill to find out what is in it.” Well, it has now been a year since the Patient Protection and Affordable Care Act passed, and we are now learning what was in it – much to the detriment of Montana taxpayers, businesses, doctors, and patients.

Here’s some of what we now know:

First, you probably will not be able to keep your current insurance plan. Although the president constantly reassured us that Americans would not be forced to change their current insurance plans, that claim increasingly appears untrue.

For example, nearly 29,000 Montana seniors currently participate in the Medicare advantage program. The Congres¬sional Budget Office predicts that PPACA “could lead many plans to limit the benefits they offer, raise their premiums, or withdraw from the program.” And, the Medicare program’s chief actuary has testified that more than a quarter of seniors could be forced out of the program.

If you get your insurance at work, you will almost certainly have to change plans. The administration itself now admits that more than two-thirds of companies could be forced to change the coverage they currently offer their workers. For small businesses, the total could reach 80 percent. The new plans will have to offer additional benefits and meet new federal requirements, likely making them more expensive.

Already, thousands of Montana workers with Flexible Spending Accounts have seen how much can be contributed to the accounts cut in half, and FSA funds can no longer be used to purchase over-the-counter medications. Workers with Health Savings Accounts (HSAs) remain in limbo, awaiting rules from the federal Department of Health and Human Services to determine whether their plans will even survive.

Moreover, the law’s individual mandate continues to pose a threat to Montanan’s ability to keep their current coverage. That mandate not only requires everyone to buy insurance, it requires insurance to meet strict government requirements, offering the benefits that the government thinks you should have, not necessarily the benefits you want or need.

Second, “reform” will cost more than advertised. The Congressional Budget Office officially “scored” the health care bill as costing $950 billion. However, those numbers do not reveal the new law’s true cost. For example, CBO’s estimates do not include roughly $115 billion in implementation costs, such as the cost of hiring new IRS agents to enforce the individual mandate. The arcane budget rules of Medicare, Social Security, and the law’s new long-term care program, also allow the government to double count savings, while ignoring future costs outside the budget window. Finally, the law front ends taxes while deferring costs, providing a misleading 10-year budget outlook. True accounting suggests that the law will cost as much as $2.7 trillion over 10 years of full operation, and add $823 billion to the federal deficit.

Third, your premiums are going up. Any Montanan opening their health insurance bills recently can see that their premiums are not going down. In fact, CBO estimates that premiums could double over the next 6-10 years. Worse, some estimates suggest that the law’s new regulations have already added 7-9 percent to the cost of insurance.

And finally, your taxes are going up. The PPACA imposes more than $569 billion in new or increased federal taxes over the next 10 years. And, it’s not just federal taxes that are rising. PPACA will add more than 70,000 people to Montana’s Medicaid rolls, driving up the cost of the state’s program by more than $80 million by 2019. That mean’s either state taxes will go up, or other state services will be cut.

Now that we’ve had a chance to see what is in the bill, Montanan’s should simply say “no thank you.”


For Immediate Release

636 Words


Carl Graham is president of the Montana Policy Institute, a nonprofit policy research and education center based in Bozeman.

Michael Tanner is a senior fellow at the CATO Institute, a libertarian policy center in Washington, D.C.

Graham can be reached at:

67 W. Kagy Blvd., Ste. B

Bozeman, MT 59715

(406) 219-0508

Tanner can be reached at:


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