SOTU Fact Check: Obama's Health Care Debt Bomb

Conn Carroll
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Posted: Jan 20, 2015 9:22 PM
SOTU Fact Check: Obama's Health Care Debt Bomb

In his State of the Union Tuesday, President Obama claimed that Obamacare has helped cut the deficit by two thirds by slowing the rate of health care spending growth. 

Not only is this claim false, but Obamacare has created a deficit time bomb that will explode just as he is leaving office.

Now it is true that the growth of health care spending has fallen during Obama's presidency. But that slowdown began not only before Obama passed Obamacare, but even before Obama took office. The reality is that larger economic factors, including the growth of cost-sharing health care plans, began slowing health care spending before Obama came to Washington.  

What Obamacare does do is move much more health care spending onto the backs of taxpayers. The year before Obama became president, the federal government spent just $201 billion on Medicaid. Thanks to Obamacare, over half of whose coverage expansion is accomplished through Medicaid, Medicaid spending will reach $395 billion the year Obama leaves office and will reach $461 billion a year by 2020.

In addition to the billions more the government will be spending on Medicaid thanks to Obamacare, the federal government will also be spending another $100 billion a year on Obamacare exchange subsidies.

Due to increases in mandatory spending programs like these, deficits are set to rise from a low of $469 billion in 2015, to $530 billion when Obama leaves office and $737 billion a year by 2020. By comparison, the highest deficit ever under President Bush was $458 billion.