The True Cost of ObamaCare
ObamaCare was passed with a slim partisan majority and substantial bipartisan opposition. A considerable amount of accounting gymnastics was necessary to get spending for the program to match with new taxes and cost containment. In the end, the Congressional Budget Office ultimately scored the bill at $940 billion with many qualifiers and assumptions.
In less than two weeks, we are already seeing unintended (or ignored) financial consequences from the bill. A number of Fortune 500 companies are announcing significant write-downs because of the loss of the tax deduction for their retirees' drug benefits. Deere, Caterpiller, AT&T, as well as Boeing have all recorded multi-million dollar charges. These write-downs will ultimately be passed on to stock holders in the form of less dividends or less earnings.
The next financial hurdle for the Administration will be explaining the "doc fix". The $940 billion price tag was balanced by allowing $271 billion to be cut from provider reimbursements for Medicare services. This has resulted in an immediate 21% decrease in Medicare fees for doctors. It is widely speculated that Congress and the Administration will "fix" this with a reinstatement of 2009 level reimbursements. If Washington, DC, does this fix, ObamaCare will suddenly be over $270 billion in the red.
Stay tuned. We are about to witness the ObamaCare budget go totally upside down, with the usual proposed increase in taxes and an obligatory increase in the federal deficit.
