Flickr photo by bradipoFigures released today by the government's bean counters estimate that the Affordable Care Act (aka Obama's health care reform bill) will cost $115 billion more than originally projected due to "administrative" costs.
And I thought it was bad when our bathroom renovation went $3,000 over-budget and our new deck ended up costing $10,000 more than we planned. So much so that we had to draw from our home equity line of credit, likely killing any hope of being debt-free by the time our kids go to college.
I'm never a fool to believe that projects, plans, vacations, or purchases will ever cost exactly what you budget for. They always cost more. I'll go to Target with a self-imposed limit of spending $50 just on the things that I need, and I'll easily drop $100.
And government spending? I'm sure we all know by now that this is the ultimate example of financial miscalculation and irresponsibility. There are flukes, but I can't recall any recent case -- from my local school board to the federal government -- where some politician from either party has stood on the podium and announced, "Good news, we've actually spent less on this! Let's go out for ice cream!"
Health care legislation was originally estimated by the Congressional Budget Office (CBO) to cost $940 billion over 10 years and reduce the federal deficit by $143 billion over the same period, reports the blog Politico. The figures released Tuesday -- at the request of California Rep. Jerry Lewis, the ranking Republican on the House Appropriations Committee, months ago, even before the big vote -- raise health care costs $115 billion more!
I suck at math. But even I think I can manage this one: 143 billion minus 115 billion is ... wait, plugging numbers into my iPhone calculator ... 28 billion. In other words, most of the offset to the federal deficit goes bye-bye.
Now, the money guys at the CBO say not to jump to conclusions. These are considered "discretionary" expenses, which means Congress must first approve them before the government drops a dime. They may decide not to spend that much. Or, like the rest of us sometimes do, they have to find a way to live within the budget approved.
That means just not funding anything extra, or making cuts elsewhere to make up the difference. But Republicans are jumping on this news, saying the Democrats were dishonest, and this is why we should just trash the whole idea.
A big chunk of the extra money would go to two government agencies:
- $5 billion to $10 billion to the Department of Health and Human Services to implement changes in Medicare, Medicaid, the Children’s Health Insurance Program, and insurance industry reforms.
- $5 billion to $10 billion to the Internal Revenue Service for implementing the rules regarding premiums and cost-sharing credits.
I hate going over-budget in my personal finances. But I do understand how hard it is to be spot-on when you're predicting the cost of something that hasn't happened yet. And once I start something, I almost always go through with it, gritting my teeth as I swallow the extra cost and muttering, "Never, never again."
But this isn't a new bathtub or a few extra planks of fancy Brazilian hardwood we're talking about.
A couple mil here and there in the scope of a major government overhaul seems reasonable and fully expected, but a hundred billion is definitely a deal-changer. Congress needs to hunker back down, get real creative with the checkbook, and figure out a way to stick to the original plan.