Side Effects: It’s Official- Higher Health Care Costs

Kathryn Nix / April 23, 2010

Yesterday, the actuaries at the Centers for Medicare and Medicaid Services (CMS), the agency that runs the giant entitlement programs, released their analysis of the new health care law. The AP reports that “White House officials have repeatedly complained that such analyses have been too pessimistic and lowball the law’s potential to achieve savings,” but the official CMS analysis reinforces several of Heritage’s predictions regarding Obamacare.

Some highlights of the CMS report:

• Mandates Without Impact. Writes CMS, “For many individuals, the penalty amounts for not having insurance coverage were not sufficiently large to have a sizable impact on the coverage decision” (p.7). Concerning employers, “the penalties would not be a substantial deterrent to dropping or forgoing coverage” (p.7). So these provisions will do little to achieve their purpose, i.e., to encourage individuals to carry coverage and employers to offer it. (more…)