Here is the Congressional Budget Office’s¬†cost estimate¬†of the Obama administration‚??s one-year employer mandate delay (which many believe will be repealed altogether.) The Obama administration‚??s ¬†unilateral decision to put off the mandate — after CEOs groused to the administration about the cost of implementation — will increase federal spending by $3 billion in 2014, reduce federal revenues by a net $9 billion, and add $12 billion more in debt than previously estimated.
The budgetary effects other than the loss of revenues from penalty payments stem primarily from changes in how many people will obtain insurance coverage and from what source. CBO and JCT expect that some large employers that would have offered health insurance coverage to their employees in 2014 will no longer do so as a result of the one-year delay of penalties for those that do not offer affordable coverage. However, most large employers currently offer health insurance coverage to their employees, and because the delay is only for one year, CBO and JCT expect that few employers will change their decisions about offering such coverage.
The CBO contends that because of the delay around 1 million fewer people are now expected to be enrolled in employment-based coverage in 2014 than projected. Where will those people go for coverage? Roughly half, the CBO says, will obtain coverage through the government-run exchanges, Medicaid and the Children‚??s Health Insurance Program (CHIP). Since the CBO’s forecasts are almost always wrong (they can only make calculation using the numbers given to them) expect reality to be much worse. Or, I should say, “worse” if you believe shuttling more people into government dependency is a bad idea.
Follow David Harsanyi on Twitter @davidharsanyi.
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