June 28, 2012

Government Owes Accurate, Transparent Accounting of Health Care Costs

Jerry Ellig

Former Senior Research Fellow
Summary

The Regulatory Impact Analyses accompanying the first set of Affordable Care Act regulations issued in 2010 substantially understated costs and overstated benefits of the regulations. Now that we know these mandates are taxes, our government owes us an accurate and transparent accounting of their costs.

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The Roberts ruling on the health care law is a victory for regulatory transparency.  For decades, economists have explained that regulatory mandates are like taxes; they impose real costs on real people. Now the Supreme Court agrees: the health care law’s individual mandate is a tax. 

Unfortunately, the administration failed to accurately estimate the size of this tax when it issued the first set of regulations implementing the health care law.  The Regulatory Impact Analyses accompanying the first set of Affordable Care Act regulations issued in 2010 substantially understated costs and overstated benefits of the regulations. Now that we know these mandates are taxes, our government owes us an accurate and transparent accounting of their costs.

Jerry Ellig is the co-author of the study, "Beware the Rush to Presumption.