March 21, 2010 2:54PM

ObamaCare’s $28 Billion Medicaid Gimmick

In a recent oped, I explain that the Democrats’ health care legislation:

would set in motion political forces that would make additional spending inevitable. It would create new constituencies for government spending, hook existing constituencies on even more government spending, and promise implausible cuts in existing subsidies to constituencies that are highly organized and vocal. For example, the Obama plan assumes that Congress will cut future subsidies to private insurers, hospitals, doctors, home health agencies, and others who provide health care to the elderly. Yet those constituencies form a nearly unstoppable political force; Obama adviser Tom Daschle calls it the “patient‐​provider pincer movement.” They will come back to Congress, year after year, until Congress reinstates their subsidies.

Keith Hennessey provides an example that demonstrates how this is a deliberate strategy to hide the true cost of the legislation:

The reconciliation bill would therefore create a new Medicaid (not Medicare) “primary care doctor payment cliff,” beginning after 2014. Just as Congress is under unbearable pressure now from doctors to prevent Medicare payments to doctors from being cut, the reconciliation bill would create exactly the same thing in Medicaid, beginning January 1, 2015.

If you assume Congress will not allow that newly created Medicaid funding cliff to bite beginning in 2015, they will spend an additional $29 B in the first decade, beginning in 2015.

This is an intentional gimmick designed to reduce by $29 B the scored cost of the reconciliation bill.

Does any serious student of Congress believe this legislation would cost only $1.2 trillion? Or would reduce the deficit?