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Will health care ruling boost cost of law?

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    Economist Art Laffer weighs in on fallout from Supreme Court decision

  • Duration 4:34
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New concerns that the supreme court's ruling.

Will make the health care law even more expensive than first anticipated.

Opponents of the president's Obama president Obama's signature -- say that Medicaid's change.

Could spike the laws 900 billion dollar price tag.

And we're still sorting all this out joined now by art Laffer who is the author of your recap.

How to fix California -- is also a former economic advisor to president Ronald Reagan.

And he is the architect of reaganomics about it -- -- about this art good morning good to see you and happy fourth of July.

But thank you very much Martha -- and -- are working hard today by the way I've got -- -- out of me today Bill Hemmer is a total -- she is not working he is -- avoided -- direct threat of -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- But they Huber -- and here will -- -- -- and you know what things everybody still sorting through on this art.

Is this issue that the Medicaid coverage that was going to be kicked back to the states is now optional for the states.

Says CBO now have to re run all these numbers and figure out what the true cost is going to be what do you anticipate.

While I anticipate the costs will go up as as time goes by this'll become more and more expensive.

Proposition piece of legislation.

And when you think about it -- government spending is taxation.

And this really obamacare really separates the people who get the benefits from those who really bear the cost.

And it will have a very large negative impact on the overall economy.

And -- CBO just playing catch up the figure out how large this is.

But it will be much larger because it's gonna really slow the economy down.

In 2013.

And beyond if it's allowed to take full effect which it is about 5050 proposition in my mind.

RI XT eight explain sourcing because at one of the it.

Impacts of this law is that it raises those who are eligible for Medicaid.

To a 133%.

Of the poverty level so in other -- it opens up that category.

A people who say you know what I mean there I can actually get Medicaid under the slot yes but if the states.

Some of which -- -- expressed that they are not evil given their state finances to cover those extra people in the state coffers.

They're gonna kick it back to the federal government.

So some of those people will likely remain.

Uninsured or or what will happen.

Well that's.

They say they're gonna remain uninsured I don't know the specifics of all of this but they're gonna remain uninsured which of course is against what the president's proposes is ideal goal.

But the states really can't afford it if you look at states in my book on California.

California is in a very tight spot I mean it's hard for me to imagine how they can afford additional expenditures.

And that's not just California it's almost every state in the nation some states are doing okay but.

Not lot.

You know it's a given that I mean it kind of makes you wonder how they -- in the original construction of the health care a lot that the states were going to be able to afford it because that was mandated that the states pay that.

And now it is not right.

Yet.

It's true they didn't think a lot in the original lot to be honest with you mark.

I mean it anyone good economics knows that whenever you give products a way way below cost.

People are gonna wave over by those products and the subsidies -- the cost will increase and you've got to get those resources from the workers and producers in taxes or in government spending deficits.

And when you look at this world I mean it's like putting the -- smorgasbord where I pay a lump sum and I get -- all -- want for free you know as much you can meet.

I'm gonna way overeat and I'm gonna go right to the caviar -- like completely eliminate the caviar.

So you know this type of program was not thought through carefully on what the incentive effects will be on the overall economy.

And that was -- -- of affects by the way mark I think we're going to be very serious and come 2013.

And beyond especially with the what with the with the bush tax cuts expiring.

-- have a real problem in 2013.

And this is just one more representation of that type of problem coming along from CBO.

And it prolong the uncertainty for a lot of businesses as well as I thought I don't know what's gonna happen and he has their own expenses art -- always panacea thank you so much mark.

You have a great July 4 -- -- -- is value we thank -- apologize to Greg for being up at -- have occurred July report it.

We're glad to have Craig but it's so hard and the fourth is a guy Greg like hammer no yeah and we love his elderly man -- -- next week if -- let.

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