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Danielle Garrett, Policy Analyst

You may have heard about a new report claiming the Affordable Care Act will increase the deficit by $340 billion, rather than decreasing it by $143 as projected by the Congressional Budget Office. Now, there is a big difference between these two numbers, so you would be justified in asking how this new study could come to such a different conclusion from the CBO, the government’s own nonpartisan scorekeeper. The answer is by using some very fuzzy math.

It’s a little complicated, even for me and I’m a numbers person! But the issue is basically this: Medicare benefits are paid out of a trust fund. Legally, the trust fund can’t spend money it doesn’t have. So this new study is based on the assumption that when the trust fund is expected to run out, the government will simply stop paying for Medicare benefits. This is important because one way the ACA reduces the deficit is through long term Medicare savings. The new study argues that these savings shouldn’t be considered, since the Federal Government won’t be paying for Medicare benefits eventually. Basically, if the government wasn’t going to spend the money anyway, we shouldn’t consider this money “savings.”

But frankly, this is bogus. Does anybody think that the government is really going to cut off health care benefits to millions of seniors? Why would we base any fiscal arguments on this assumption? And in fact, no one does, on either side of the aisle. As Paul Krugman points out over at the New York Times, assessments of new legislation are always based on current policy rather than current law. For example, even though the Bush tax cuts are legally set to expire at the end of this year, the proposed Ryan budget (which slashes vital services for women and their families,) bases its deficit reduction potential on the assumption that the tax cuts will eventually be extended. And no one is making a fuss about that.

The Congressional Budget Office has a lot of experience figuring out how to accurately assess the fiscal impact of legislation (legislation proposed by both Democrats and Republicans) and they say that the costs of the Affordable Care Act are more than fully paid for. Being honest about these numbers is important. Americans deserve to know what the Affordable Care Act really does, and what it really does is save money. It saves the government money and it saves individuals money, which is particularly important for women who pay more out of pocket for their health care costs and are more likely to go into debt because of their medical bills. The ACA is a good deal for women and the real numbers show that.

Cross-post from WomenStake

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