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Cost estimate for insurance aid jumps $111B; administration cites technical budget issues
WASHINGTON (AP) ' Cost estimates for a key part of President Barack Obama's health care overhaul law have ballooned by $111 billion from last year's budget, and a senior Republican lawmaker on Friday demanded an explanation.
House Ways and Means Committee Chairman Dave Camp, R-Mich., wants to know by Monday why the estimated ten-year cost of helping millions of middle-class Americans buy health insurance has jumped by about 30 percent.
Administration officials say the explanation lies in budget technicalities and that there are no significant changes in the program.
The revised numbers, buried deep in the president's budget, stumped lawmakers and some administration officials for most of the week. At a congressional hearing Tuesday, Health and Human Services Secretary Kathleen Sebelius, who is in charge of carrying out the health care law, indicated she was unaware of the changes.
At issue are subsidies that will be provided under the health care law to help middle class people buy private coverage in new state insurance markets that will open for business in 2014.
Last year's budget estimated the cost of the aid to be $367 billion from 2014-2011. This year's budget puts it at $478 billion over the same time period.
"This staggering increase ... cannot be explained by legislative changes or new economic assumptions, and therefore must reflect substantial changes in underlying assumptions regarding the program's ... costs," Camp wrote Friday in a letter to Sebelius and Treasury Secretary Tim Geithner.
Republicans say they're concerned that either the estimated cost of the insurance has gone up, or that the administration has determined many more people will be losing employer coverage and going into the new government-subsidized markets, which will be called exchanges.
Administration officials say the big increase from last year's estimates is no cause for alarm and that the administration is not forecasting an erosion of employer coverage or higher insurance costs.
About two-thirds of the increase is due to effects of newly signed legislation that raises costs for one part of the health care law, but still saves the government money overall. The rest is due to technical changes in Treasury assumptions about such matters as the distribution of income in America.
"The estimates do not assume changes in what exchanges look like, the cost of insurance, or the number of Americans who will get their insurance in this new marketplace," Treasury spokeswoman Sabrina Siddiqui said in a statement Friday.
That explanation has drawn skepticism from Ways and Means Committee Republican staff members.