Accounting Tricks in the Baucus Health Care Bill

October 15, 2009

It has been reported in the press that the CBO calculated the cost of the Baucus health care bill version of Obamacare will cost approximately $856 billion and will reduce the deficit over ten years.  However, as usual with congress, the devil is in the details and especially so in Obamacare.

Today in the WSJ, Karl Rove details some of the tricks that were used in the Baucus health care bill to get to those numbers.

One of the accounting tricks is that the bill is designed to impose new taxes and over $120 billion in medicare reductions between 2011 and 2015.  The bill doesn’t start spending until 2015 and doesn’t fully implement spending until 2017.  This means that there is 10 years of funding covering a few years of spending.  The calculations have not been performed with 10 years of funding and 10 years of spending. is reporting that Democrats are also introducing a second bill that although not part of the Baucus health care bill, puts back spending that the Baucus bill intentionally left out.  In effect, they kept the total cost of the bill down by hiding costs in a separate bill that isn’t being heavily followed in the media.

This additional bill puts the total cost of the Baucus health care bill over $1.1 trillion and above limit of $900 billion that President Obama put out as a goal.

There are also numerous flawed funding assumptions.

For example, the bill assumes that employers that drop health care for employees will increase the salaries of those employees equal to the amount that the employer was paying for health care.  Both the employee and the employer would pay more in taxes and fines. 

Employers who drop coverage would do so presumably to lower costs as the fines for dropping coverage would be lower than what they were currently paying in health care contributions.  No employer would increase the employee salaries to the point that the extra salaries and fines would be equal or more than the employer was paying before.

The bill would also tax “Cadillac” health insurance plans to raise funds.  The bill further assumes that the revenues would increase 10 to 15% per year.  These costs would be passed on to consumers who would most likely opt for cheaper plans with less coverage.  People would not flock to very high priced plans increasing revenues as predicted.

The American people need to demand that our government give us a true accounting of spending bills without trying to hide the true costs through accounting tricks and flawed assumptions.  Given the fact that most Americans and undoubtedly most of our representatives in congress will bother to read or take the time to understand the bill, transparency and truth need to be made available.

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5 Responses to Accounting Tricks in the Baucus Health Care Bill

  1. [...] presents Accounting Tricks in the Baucus Health Care Bill posted at Conservative Patriot HQ. These are all great points.  However, the biggest trick is that [...]

  2. [...] Accounting Tricks in the Baucus Health Care Bill [...]

  3. [...] the Senate, the bill was kept under $900 billion by employing several accounting trickssuch as delaying costs for the first few years and moving almost $300 billion in spending to a [...]

  4. [...] lower the tax revenue that the health care reform bill has established.  If you ever believed the accounting tricks that said the bill was deficit neutral, the missing revenue from taxing Cadillac plans will put [...]

  5. Deneen Corallo on March 17, 2010 at 12:06 am

    Hi, I found this blog post while was searching for online shopping related information on yahoo and found it very good article, thanks for sharing, best regards and cheers!

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