Cost of Obamacare Regulations Underestimated by Billions of Dollars

By John Vinci

The Obama Administration underestimated the costs of Obamacare regulations by billions of dollars says the non-partisan Mercatus Center at George Mason University in a working paper it issued on Monday. The study examines eight Obamacare regulations issued in 2010 that became law before public comment was allowed because of the brief timeline Obamacare gave for their implementation.

Mercatus carefully studied the required cost/benefit analysis used by the Administration. And it found that the Administration’s cost estimates tended to be underestimated while its benefit estimates tended to be overestimated. The result is that the cost of implementing these eight regulations may be billions of dollars more than the Obama Administration is willing to admit.

For example, Mercatus says that, “For the ‘Early Retiree Reinsurance Program’ rule, costs were underestimated by $9-$10 billion over four years. More accurately calculated benefits might have been about one-third as high as estimated.”

This comes as no surprise to us at Americans for Limited Government. We’ve caught the Obama administration artificially inflating Obamacare’s benefits before.

For instance, on September 7, 2010 we submitted a public comment that criticized the Obama Administration for “describ[ing] [the preventive services regulation] as having a cost-savings benefit while supplying insufficient evidence to back such a claim and ignoring evidence to the contrary.”

The Mercatus study confirms our criticism: “The selective review of the literature provided in the RIA gives the uninformed reader a false impression of the extent to which preventive health services are cost-saving. Literature reviews consistently have concluded that most clinical preventive services typically are not cost-saving.”

While the Mercatus Center’s working paper does not scrutinize the paperwork burden analysis of these regulations (we hope they will consider doing so in the future), we’ve found that the Administration also underestimates how much it will cost Americans to comply with the paperwork these regulations generate.
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