Understanding the math CBO #'s and Healthcare

[cme1201]

I have been doing a little research of what the cost effect of the PPACA and the Reconciliation Act. Looking at the exchanges that are being offered up for "low" income earners.

www.cbo.gov/ftpdocs/121xx/doc12188/05-12-Subsidies_in_Exchanges.pdf
This is a CBO fact sheet regarding questions they have been asked.
aspe.hhs.gov/poverty/11poverty.shtml
This is the HHS federal poverty level rates.

Now the exchanges are based from 150% of federal poverty upto and including 400%

According to HHS the federal poverty level for a 5 person household is $26,170 so 150% would be $39,255 400% would be $104,680.00

According to CBO’s projections, total federal subsidies
for premiums will grow over time—starting at $21 billion in 2014 and reaching $118 billion by 2021—because of rising enrollment in the exchanges and an increasing average subsidy per enrollee.

With the Median Income in the US being roughly $46,326, the majority of Americans will receive subsidies for the purchase of their health care costs.

If you are on the low end accoring to the CBO charts you will receive a subsidy of roughly 13K or if on the higher end you will receive a subsidy of over 8K.

Where is the additional money to cover the 10 billion a year in subsidy increases coming from?

[BeenThere...DoneThat...]

...federal mattresses?

[fairlycrazy23]

[cme1201]

Subject too deep?

Too much math?

Come on guys and gals lets talk numbers.

[BeenThere...DoneThat...]

...QE3! now there's a number... it'll cure what ails 'ya...

[djAdvocate]

Jul 8, 2011 15:28:18 GMT -5 cme1201 said:

Subject too deep?

Too much math?

Come on guys and gals lets talk numbers.

$10B is beer money.

[BeenThere...DoneThat...]

Jul 8, 2011 16:58:29 GMT -5 djAdvocate said:

Jul 8, 2011 15:28:18 GMT -5 cme1201 said:

Subject too deep?

Too much math?

Come on guys and gals lets talk numbers.

$10B is beer money.

...not if you're only making minimum payments... and I've got a CC statement that says so...

[djAdvocate]

Jul 8, 2011 17:35:22 GMT -5 BeenThere...DoneThat... said:

Jul 8, 2011 16:58:29 GMT -5 djAdvocate said:

$10B is beer money.

...not if you're only making minimum payments... and I've got a CC statement that says so...

hehehehe

[BeenThere...DoneThat...]

Jul 8, 2011 17:39:10 GMT -5 djAdvocate said:

Jul 8, 2011 17:35:22 GMT -5 BeenThere...DoneThat... said:

...not if you're only making minimum payments... and I've got a CC statement that says so...

hehehehe

;D

[Deleted]

Where is the additional money to cover the 10 billion a year in subsidy increases coming from?

It's pretty simple but Democrats don't like to admit it. It comes from MUCH higher taxes. That's not just the federal tax because they know that if they increased that enough to pay for social programs they would have a revolution. It's going to be higher federal tax PLUS a lot of higher taxes on existing stuff PLUS a lot of new taxes. I think the killer tax will be on gas. That's because everybody has to buy it & it's easy to slip a dollar tax per gallon (it won't be all at once, it will go up in increments & could end up at the $1.50 per gallon of gas range. That's what they do in Europe & they have the same socialism programs that democrats want here).

[Deleted]

Oh & I can't wait to see Americans choke down something like a TV tax. You pay an extra tax for each & every TV. Of course they also had a window tax (yes, a tax on the number of windows you have in your house. That should do interesting things to land lords of appartment builds. Yelp, socialism, it's the coming thing.

[cme1201]

Actually my numbers are slightly off. The CBO states that from 2014 - 2021 the subsidy will increase by 93 billion or roughly 15.5b per year from year 2-7. If we look at the running number from year one through year seven we will have a total subsidy in seven years of

Year Running total
1 -21,000,000,000
2 -36,500,000,000
3 -52,000,000,000
4 -67,500,000,000
5 -83,000,000,000
6 -98,500,000,000
7 -118,000,000,000

Equals a total subsidy of 476.5b in 7 years, where is this money going to come from? For those who are for the public option, how will we control the costs associated with "providing" coverage, if as the census states the median income places the majority of Americans getting a subsidy.

I know we are talking about only 1/2 a Trillion dollars, chump change really, yet it is simply more debt that we as a country cannot afford, especially with the CBO stating that by 2025 our inflation adjusted GNP will fall by conservative estimates of 2-6 percent and then by 2035 GNP will fall between 7-18 percent.

The Impact of Growing Deficits and Debt
CBO's projections in most of this report understate the severity of the long-term budget problem because they do not incorporate the negative effects that additional federal debt would have on the economy, nor do they include the impact of higher tax rates on people's incentives to work and save. In particular, large budget deficits and growing debt would reduce national saving, leading to higher interest rates, more borrowing from abroad, and less domestic investment—which in turn would lower income growth in the United States. Taking those effects into account, CBO estimates that under the extended-baseline scenario, real (inflation-adjusted) gross national product (GNP) would be reduced slightly by 2025 and by as much as 2 percent by 2035, compared with what it would be under the stable economic environment that underlies most of the projections in this report. Under the alternative fiscal scenario, real GNP would be 2 percent to 6 percent lower in 2025, and 7 percent to 18 percent lower in 2035, than under a stable economic environment.

Rising levels of debt also would have other negative consequences that are not incorporated in those estimated effects on output:

*Higher levels of debt imply higher interest payments on that debt, which would eventually require either higher taxes or a reduction in government benefits and services.
*Rising debt would increasingly restrict policymakers' ability to use tax and spending policies to respond to unexpected challenges, such as economic downturns or financial crises. As a result, the effects of such developments on the economy and people's well-being could be worse.
*Growing debt also would increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the government's ability to manage its budget and the government would thereby lose its ability to borrow at affordable rates. Such a crisis would confront policymakers with extremely difficult choices. To restore investors' confidence, policymakers would probably need to enact spending cuts or tax increases more drastic and painful than those that would have been necessary had the adjustments come sooner.
To keep deficits and debt from climbing to unsustainable levels, policymakers will need to increase revenues substantially as a percentage of GDP, decrease spending significantly from projected levels, or adopt some combination of those two approaches. Making such changes while economic activity and employment remain well below their potential levels would probably slow the economic recovery. However, the sooner that medium- and long-term changes to tax and spending policies are agreed on, and the sooner they are carried out once the economy recovers, the smaller will be the damage to the economy from growing federal debt. Earlier action would permit smaller or more gradual changes and would give people more time to adjust to them, but it would require more sacrifices sooner from current older workers and retirees for the benefit of younger workers and future generations.www.cbo.gov/doc.cfm?index=12212

The more we spend now the worse we make it for future generations, as the CBO states in the last few sentences we deal with the debt and deficits now and make it easier or we deal with it later and make it hard.

[BeenThere...DoneThat...]

>>> The more we spend now the worse we make it for future generations, as the CBO states in the last few sentences we deal with the debt and deficits now and make it easier or we deal with it later and make it hard. <<<

...agreed...

...I've been consistent in my desire to do a controlled-burn now, on our own terms, rather than wait and burn down on somebody else's...

[BeenThere...DoneThat...]

...but it'll be hard either way... I just prefer hard over excruciating...