Archive for the ‘Health, Welfare & Entitlements’ Category
Health Care Priorities
As Washington debates a big increase in federal health care spending, I came across these two articles on what a splendid job the government is doing managing its current health programs.
Harvard professor Malcolm Sparrow recently testified that roughly $100 billion or more of Medicare and Medicaid dollars go down the drain each year due to fraud. It’s easy to rip these programs off because of their vast size and electronic claims processing. Medicare processes more than 1 billion of claims each year.
This Washington Post article last year described one particular example of the fraud. A high-school drop-out managed to bilk Medicare out of $105 million by submitting a 140,000 false claims from her laptop computer.
So we’ve got $100 billion or so of taxpayer’s hard-earned money being stolen each year from our current public health care plans. You would think that with today’s giant budget deficit that the highest priority of policymakers would be to reform these programs to reduce the unbelievable and disgusting amounts of graft. But no, many in Congress and President Obama have decided that current government health care works so well that they want to expand it.
President Obama wants to create a new “public health option” to “keep insurance companies honest.” Hey Mr. President, you should do something about the $100 billion of dishonesty in current public health plans, instead of hitting up taxpayers to fund an even more bloated health care budget.
Excellent WSJ Column on Health Care Nonsense
By George Newman. A sampling:
“The cost of health care rises two to three times as fast as inflation.”
That’s like comparing the price of hamburger 30 years ago with the price of filet mignon today and calling the difference inflation.
Why Wal-Mart Supports an Employer Mandate
A couple of years ago, I shared a cab to the airport with a Wal-Mart lobbyist, who told me that Wal-Mart supports an “employer mandate.” An employer mandate is a legal requirement that employers provide a government-defined package of health benefits to their workers. Only Hawaii and Massachusetts have enacted such a law.
I couldn’t believe what I was hearing. Wal-Mart is a capitalist success story. At the time of our conversation, this lobbyist was helping Wal-Mart fight off employer-mandate legislation in dozens of states. Those measures were specifically designed to hurt Wal-Mart, and were underwritten by the unions and union shops that were losing jobs and business to Wal-Mart.
But it all became clear when the lobbyist explained the reason for Wal-Mart’s position: “Target’s health-benefits costs are lower.”
I have no idea what Target’s or Wal-Mart’s health-benefits costs are. Let’s say that Target spends $5,000 per worker on health benefits and Wal-Mart spends $10,000. An employer mandate that requires both retail giants to spend $9,000 per worker would have no effect on Wal-Mart. But it would cripple one of Wal-Mart’s chief competitors.
So yesterday’s news that Wal-Mart is publicly endorsing a “sensible and equitable” employer mandate — i.e., a mandate that hurts Target but not Wal-Mart — didn’t come as a surprise to me. It merely confirmed what I learned in a cab on the way to the airport: Wal-Mart has gone native. That great symbol of the benefits of free-market competition now joins its erstwhile enemies among the legions of rent-seeking weasels who would rather run to government for protection than earn their keep by making people’s lives better.
In 2007, Wal-Mart officially joined the Church of Universal Coverage when it entered one of those countless strange-bedfellows coalitions with the Service Employees International Union. At the time, I criticized Wal-Mart for “self-congratulatory puffery” and “jump[ing] on the big-government bandwagon.” I also criticized then-CEO Lee Scott for spouting economic nonsense. (I later learned that Scott was not amused.)
This is so much worse than that.
Filed under: Cato Publications; Health, Welfare & Entitlements
The Importance of Just Saying No
Conservatives are accused of being a party of “no.” Fine. That is an indispensable word in politics because most new ideas are false and mischievous. Furthermore, the First Amendment’s lovely first five words (”Congress shall make no law”) set the negative tone of the Bill of Rights, which is a list of government behaviors, from establishing religion to conducting unreasonable searches, to which the Constitution says: No.
Filed under: Government and Politics; Health, Welfare & Entitlements; Law and Civil Liberties; Political Philosophy
Another Health Care Question for the President
This one inspired by my razor-sharp colleague Arnold Kling:
Mr. President, you say you seek to reform America’s health care sector because it is unsustainable. You also say that Americans will get to keep what they have. Aren’t you contradicting yourself?
Add it to my list.
Understating the Case against a New Government Health Plan
I just caught wind of Rep. Paul Ryan’s (R-WI) quip about President Obama’s proposal to have a new government health insurance program compete against private insurers:
Having the government compete against the private sector is kind of like my seven-year-old daughter’s lemonade stand competing against McDonald’s.
That understates the case. McDonald’s doesn’t have guns. It doesn’t use coercion or the threat of coercion against its competitors. A better analogy is that Obama’s proposal is like having a kid’s lemonade stand compete against Al Capone.
The Ultimate Question: Freedom or Power?
Here I was, sick with worry that the questions I hoped to pose to President Obama about his health reform plan would never be answered. Thank God, Matthew Holt stepped up to the plate. Or the wicket. Whatever.
What follows are some of my questions (addressed to the president) and Holt’s responses (in italics).
Mr. President, in your inaugural address and elsewhere, you said you are not interested in ideology, only what works. Economists Helen Levy of the University of Michigan and David Meltzer of the University of Chicago, where you used to teach, have researched what works. They conclude there is “no evidence” that universal health insurance coverage is the best way to improve public health. Before enacting universal coverage, shouldn’t you spend at least some of the $1 billion you dedicated to comparative-effectiveness research to determine whether universal coverage is comparatively effective? Absent such evidence, isn’t pursuing universal coverage by definition an ideological crusade?
Sadly Michael, universal coverage is not about improving public health. If you want to do that, go teach some kids age 1–5 and build some sewage systems. Universal care is about making sure that the costs of health care are fairly distributed. Under the systems you prefer and the one we now have they’re distributed from the poor and sick to the healthy and wealthy—many of whom we both know work in the health care system. But apparently there was NOT ONE MENTION of the uninsured or sick people bankrupted by the system in the whole hour.
Holt’s categorization of my preferred health care “system” and the un-mentioned uninsured aside, he makes my point for me: universal coverage is about ideology, not health. In fact, Holt demonstrates that the Church of Universal Coverage would be happy to have people die sooner if that would promote its ideo-religious goals. I really should send him a fruit basket.
A draft congressional report said that comparative-effectiveness research would “yield significant payoffs” because some treatments “will no longer be prescribed.” Who will decide which treatments will get the axe? Since government pays for half of all treatments, is it plausible to suggest that government will not insert itself into medical decisions? Or is it reasonable for patients to fear that government will deny them care?
Why should patients fear it? We know that less intensive care is better, and cheaper primary care is better than more extensive specialty care.
So the government will insert itself into medical decisions. Gotcha. Holt is really clearing a lot of things up.
To answer his question, though, the concern is that one size really doesn’t fit all, and that the government’s rules will, shall we say, break my eggs to make his universal-coverage omelette.
Filed under: Cato Publications; Health, Welfare & Entitlements
Setting the Record Straight on Health Care Reform
President Obama took to the airwaves Wednesday in an effort to promote his plan for a national government-run health care system. He answered questions on rising costs, taxing benefits, and many other issues during an ABC News special on health care reform called “Questions for the President: Prescription for America.”
After live-blogging the ABC special, Cato scholars Michael D. Tanner and Michael F. Cannon dissect the president’s health care plan point by point.
My $1 Trillion vs. Your $1 Trillion
Do you remember how, during the debate over proposals to create personal accounts for Social Security, opponents called the $1 trillion transition cost intolerable? Now, a $1 trillion floor for health care reform is seen as a sign of success. Says something about priorities, doesn’t it?
Three Worthwhile Health Care Videos
The first comes from the group Patients United Now. Keep this video in mind the next time you hear someone say that a new “public option” is not about a government takeover of the health care sector.
The next video comes from the Independence Institute in Colorado. It is a nice complement to my colleague Michael Tanner’s recent study, “Massachusetts Miracle or Massachusetts Miserable: What the Failure of the ‘Massachusetts Model’ Tells Us about Health Care Reform.”
Finally, a really disturbing video showing Christina Romer, chair of President Obama’s Council of Economic Advisors, refusing to admit to a congressman that the president’s reform plan would oust Americans from their current health plans.
It’s a shame what politics does to really smart people.
Filed under: Cato Publications; Health, Welfare & Entitlements
Remember When $1 Trillion Was Real Money?
Senate Finance Committee chairman Max Baucus (D-MT) has announced that he has reached agreement on scoring a series of options that will reduce the cost of his health care reform bill to just $1 trillion over the next 10 years. Whew. Now we can all rest easy.
Still, no agreement on the tax increases needed to pay that $1 trillion though.
Cato Experts Live-Blog ABC News Health Care Special
Cato health care experts Michael D. Tanner and Michael F. Cannon provided live commentary Wednesday night for ABC’s “Prescription for America,” a special program from within the White House on Obama’s health care reform proposal.
You can watch the program, and follow along below.
For more, visit Healthcare.Cato.org.
Filed under: Cato Publications; Health, Welfare & Entitlements
How Many Uninsured? It Does Not Matter
As my colleague Michael Cannon discusses below, in today’s WSJ Online, Carl Bialik examines the data on how many Americans do not have health insurance. Discussions like this one will be rehashed repeatedly during the coming health care debate, but they miss the crucial point: the U.S. should not expand government subsidy for health insurance whether the number of insured is 46 million or just 46.
The economics argument for subsidizing health insurance rests on the claim that private insurance markets do not provide fairly priced insurance. This is allegedly because insurers cannot distinguish the good health risks from the bad health risks and thus price insurance at a level only the bad risks are willing to pay.
This claim of “asymmetric information” is incredibly unpersuasive: absent regulation to the contrary, an insurance company can require any medical tests it wants and learn an insurance applicant’s health at least as well as the applicant. It can also condition coverage on relevant behavior, such as not smoking or maintaining a reasonable weight.
The problem is thus that insurance companies can determine all too well who is a good health risk and who is not, so they will price insurance accordingly if the law permits. This strikes many people as unfair, so they want to subsidize insurance for those born with unhealthy genes.
If insurance subsidies had few unintended consequences, this might be a reasonable form of social insurance. The problem is that subsidizing insurance exacerbates moral hazard, the tendency of people with insurance to consume too much health care. This is a crucial reason for rapidly increasing health expenditures.
Policy must therefore accept a trade-off: subsidizing health insurance will increase some people’s perceptions of fairness, but it will make the health care market less efficient.
A reasonable balancing of these two concerns suggests subsidizing insurance for the truly poor, but no more. In fact, the U.S. already does that via Medicaid. The uninsured are mainly people with too much income to qualify for Medicaid, or people eligible but fail to apply. Thus expansion of subsidized insurance to the currently uninsured, whatever their number, is likely to generate substantial inefficiency relative to any increase in “fairness” it creates.
How Many Uninsured Are There?
The Wall Street Journal’s Numbers Guy tackles the question:
The Census Bureau estimates that the number of uninsured amounts to 45.7 million people. But the agency might be over-counting by millions due to faulty assumptions…
Even though legislation won’t cover many of them, illegal immigrants are especially difficult to enumerate: Few raise their hands to be counted. Prof. [Jonathan] Gruber estimates they make up about 13% of the uninsured today, or nearly six million people of that 45 million number…
Of the rest, some people are eligible for health insurance but don’t know it and many can afford it but don’t want it. About 43% of uninsured nonelderly adults have incomes greater than 2.5 times the poverty level, according to a report released Tuesday by the business-backed Employment Policies Institute.
He left out a few things, though.
The estimate of 46 million uninsured, which comes from a less-than-ideal government survey, has been the occasion of a fraud on the public. For 20 years, the Church of Universal Coverage told us that 40-some million Americans are uninsured for the entire year. Then, experts including the non-partisan Congressional Budget Office said that no, 40-some million is the number who are uninsured on any given day, and a lot of those people quickly regain coverage. The number of Americans who are uninsured for the entire year is actually 20-30 million. Yet the Church of Universal Coverage kept using that 40-some million estimate as if nothing had happened – even though the meaning of that estimate had completely changed.
The Congressional Budget Office also reports that as many as 15 percent of those 20-30 million chronically “uninsured” are eligible for government programs, so they’re effectively insured.
According to economists Mark Pauly of the University of Pennsylvania and Kate Bundorf of Stanford, as many as three-quarters of the uninsured could afford coverage but choose not to purchase it. Again, according to the Congressional Budget Office, 60 percent of the uninsured are under age 35, and 86 percent are in good-to-excellent health.
Government intervention has made health insurance unnecessarily expensive for them, so these folks quite sensibly don’t want to be ripped off. Mandating that they buy coverage is really about hunting them down and taxing them.
Higher Taxes for Health Care, Fewer Jobs
President Obama broke his pledge not to raise taxes on lower- and middle-income families with his large tobacco tax increase back in February. It appears that the increase is not just hurting tobacco consumers, but also hurting workers in the cigar industry. From Tampa Bay Online:
Tampa will lose part of its cigar heritage in August when Hav-A-Tampa shuts its factory near Seffner and lays off about 495 employees, closing a factory that has been operating since 1902.
Several things conspired to hurt Altadis’ sales, McKenzie said, including the recession and the growth of indoor smoking bans. The bans have especially hurt sales in cold-weather states, where it’s impractical to smoke a cigar outdoors in the winter, he said.
However, the company attributed much of its trouble to the State Children’s Health Insurance Program, or SCHIP, a federal program that provides health insurance to low-income children. It is funded, in part, by a new federal tax on cigars and cigarettes. McKenzie couldn’t say how much sales of Hav-A-Tampa cigars had fallen off, but the numbers have dropped significantly, he said.
Previously, federal excise taxes on cigars were limited to no more than a nickel, said Norman Sharp, president of the Cigar Association of America trade group. The tax increase, which took effect April 1, raises the maximum tax on cigars to about 40 cents, Sharp said.
This health-tobacco legislation raised taxes $65 billion over 10 years. Imagine the damage that would be caused by the giant health bill currently moving through Congress, which will cost $1 trillion or more over 10 years.
Hat Tip: Tad DeHaven
Filed under: Health, Welfare & Entitlements; Regulatory Studies
Ed Crane Describes a Libertarian Approach to Health Care Reform
Last week, Cato hosted an all-day conference on health care reform, which included expert opinions from across the political spectrum. Cato Founder and President Ed Crane started the event with a talk about a libertarian approach to reforming health care, which would reduce federal involvement, increase competition, decouple health care from employment and increase the amount of doctors available.
You can find all of Cato’s reasearch on health care reform at Healthcare.Cato.org.
Howard Baker and Universal Coverage
Add former Senate Majority Leader Howard Baker (R-TN) to the Church of Universal Coverage faithful:
Health care reform and universal coverage is [sic] indeed something [sic] whose time has [sic] come.
Baker joined fellow former Senate Majority Leaders Tom Daschle (D-SD) and Bob Dole (R-KS) to introduce a health care reform package. Daschle is already a high priest in The Church. For backing this proposal, Dole probably is too, but I don’t have any juicy quotes handy.
The UN Can’t Even Promote Health
When people ask if the United Nations can serve any useful role, I find myself mumbling that maybe it can do some good on issues with cross-border impact, such as aiding refugees and improving health care. However, I always add, the record has not been good even there.
Now even the UN is admitting that it is hard to demonstrate that it has done any good on health care despite spending billions of dollars collected largely from American and other Western taxpayers.
In the last two decades, the world has spent more than $20 billion trying to save people from death and disease in poor countries.
UPDATE: The AP has made a correction to their original story that reported the UN had spent $20 billion on health care programs. They meant to say nearly $200 billion:
LONDON (AP) — In the last two decades, the world has spent more than $196 billion trying to save people from death and disease in poor countries.
But just what the world’s gotten for its money isn’t clear, according to two studies published Friday in the medical journal Lancet.
Millions of people are now protected against diseases like yellow fever, sleeping under anti-malaria bed nets and taking AIDS drugs. Much beyond that, it’s tough to gauge the effectiveness of pricey programs led by the United Nations and its partners, and in some cases, big spending may even be counterproductive, the studies say.
I’m thinking of changing my answer the next time I’m asked if the UN has any positive roles to a simple and emphatic “no.”
Filed under: Health, Welfare & Entitlements; International Economics and Development
You’re for Fair Competition, You Say?
Len Nichols is the top health-policy guy at the New America Foundation. He’s spent the past few months trying to negotiate a compromise between the Left and the far Left over the creation of a new government health insurance program that would compete with private insurers. With John Bertko, Nichols wrote a paper on how to create a level playing field between a government program and private insurance.
Yesterday’s CongressDailyAM, however, had an interesting article that sheds light on Nichols’ sense of fair play. According to the article:
Nichols has floated the idea of writing into law a requirement that certain changes to the system would require a two-thirds vote to pass rather than a simple majority.
Never mind that such a requirement would guarantee that the new program would breed even more stagnation and death than Medicare and Medicaid do.
What Nichols proposes is that a Democratic Congress should be able to create a new Fannie Med by a simple majority vote in each chamber, but if a subsequent (Republican?) Congress wanted to repeal it, they should face a higher bar.
Keep that in mind when you hear talk about a level playing field.
Panic Starting to Set in Among Advocates of Government-Run Health Care
Until now the usual suspects hoping to win a government takeover of America’s health care system appeared to be confident of victory. No longer, however. Some of them, at least, are starting to notice the fact that health care “reform” will be incredibly expensive at a time when the U.S. government has no money. Indeed, the problem is not that the Treasury is empty. Rather, it is filled with IOUs for which foreign creditors, such as China, now worry about collecting on.
Writes Jonathan Cohn at the New Republic:
Attention fellow liberals who want health care reform: You are in danger of losing the fight for universal health insurance. And it’s not only–or even primarily–because of the public plan.
It’s because of the money.
Well, contrary to the belief of many on the Left, money does matter. As much as we all might wish, money does not grow on trees. And running the printing presses isn’t the panacea that some believe.
Cohn seems surprised that the Congressional Budget Estimate came in so high, but a complete bill almost certainly would cost even more. Thankfully, the government-takeover bandwagon has hit a large bump, and even larger barriers must be overcome for health care “reform” to triumph.
Filed under: Health, Welfare & Entitlements; Tax and Budget Policy
“Why Health Care Reform Could Fail Again”
Former Clinton administration adviser Stanley Greenberg has an illuminating article in The New Republic. Greenberg compared the polls he did during the Clinton health care debate to his recent polling on President Obama’s proposed reforms:
Perhaps I should know better than to have sensed any profound changes in the country. And, when I got the results for the new survey, I looked at each question warily, remembering how it all went badly wrong. As I reached the last of the questions, I exclaimed: “Oh no. It can’t be. Nothing’s changed.”…
The country divides evenly on whether the greater risk is an unchanged status quo or government reforms that “create new problems.” And, finally, Obama might want to pay attention to how closely his situation echoes Clinton’s. Then and now, more people favor the president’s health care plan than oppose it, but the supporters make up less than a majority.
If anything, I found on most of these questions that the desire for change and support for reform was slightly stronger 16 years ago, underscoring the importance of learning some lessons from that history…
Our inability to talk credibly about how we would reduce health care spending or costs for individuals and the country built a contradiction into all our efforts–the more we talked about the comprehensiveness of our plans, the more voters worried this would yield higher premiums or higher taxes. Very quickly, voters came to conclude that their families would face higher costs.
And those dynamics are still in play. In my recent polling, I found that voters are skeptical about claims that reform will reduce costs and personal health outlays. Claims about simplicity, information-technology modernization, and best practices don’t seem to be enough to persuade them otherwise…
It may surprise you that Obama has already lost seniors, according to our current survey–only one-third approve of his plan. It doesn’t take a rocket scientist to see there isn’t much in it for them. There is already talk of carving out major savings from Medicare and, unlike during Clinton’s battle, no offer of a new drug benefit. Clearly, they need to see health care gains for themselves too…
With few illusions about the old system, union households are strong supporters of Obama’s proposal. Yet the members will ultimately judge whether the plan is good for their families–and I’m certain that all the talk about taxing insurance contributions has not gone unnoticed…
[W]hile voters have great confidence in Obama and his administration, they are worried about the deficits and spending and the government bailouts of the irresponsible. So, while voters want to see a rebalancing away from greed and toward the public good, almost half the citizenry is worried the government may get it wrong.Ross Perot is a distant memory, but his more libertarian, blue-collar male voters are very much alive. They are pretty certain government will mess this up–and only about 30 percent support Obama’s health care plan right now. With Republicans reciting their mantra about no “government takeover” of health care, the plan’s opponents have found a common text…
Most are not at all satisfied with a system that has forced them to trade higher wages for continued health insurance coverage and other compromises. But those personal compromises to get satisfactory coverage will mean people can live a little longer with the status quo and want to make sure the proposed changes really will make things better for their families.
Those who support real health care reform should take note.
Sen. Kennedy’s Budget-Breaking “Reform” Bill
It appears that the Obama administration has decided to disown the venerable Senator. No wonder. The Congressional Budget Office estimated the ten-year cost of Sen. Kennedy’s bill at $1 trillion, but admitted that its analysis was incomplete.
Now the consulting group HSI Network, LLC comes foward with an estimate of $4 trillion:
The Senate Committee on Health, Education, Labor and Pensions (HELP) have proposed a health reform bill called the Affordable Health Choice Act (AHC) that seeks to reduce the number of uninsured and increase health system efficiency and quality. The draft legislation was introduced on June 9th, 2009. The proposal provided adequate information to suggest what the impact would be of AHC using the ARCOLA™ simulation model. AHC would include an individual mandate as well as a pay or plan provision. In addition, it would include a means-tested subsidy with premium supports available for those up to 500% of the federal poverty level. Public plan options in three tiers: Gold, Silver and Bronze are proposed in a structure similar to that of the Massachusetts Connector, except that it is called The Gateway. These public plan options would contain costs by reimbursing providers up to 10% above current reimbursement rates. There is no mention of removing the tax exclusion associated with employer sponsored health insurance. There is also no mention of changes to Medicare and Medicaid, other than fraud prevention, that could provide cost-savings for the coverage expansion proposed. Below, we summarize the impact of the proposed plan in terms of the reduction on uninsured, the 2010 cost, as well as the ten year cost of the plan in 2010 dollars.
HELP Affordable Health Choices Act
- Uninsurance is reduced by 99% to cover approximately 47,700,000 people
- Subsidy - Tax Recovery = Net cost:
- $279,000,000,000 subsidy to the individual market
- $180,000,000,000 subsidy to the ESI market with
- Net cost: $460,500,000,000 (annual)
- Net cost: $4,098,000,000,000 (10 year)
- Private sector crowd out: ~79,300,000 lives
HSI figures that a lot more people will take advantage of federal health insurance subsidies, driving costs up far more than indicated by the CBO figure. (H/t to Phil Klein at the American Spectator online.)
Of course, no one knows what the bill would really cost in operation. But the history of social insurance and welfare programs is sky-rocketing expense well beyond original projections. Go back and look at the initial cost estimates for Medicare and Social Security, and you will run from the room simultaneously laughing and crying.
Health care reform would be serious business at any moment of time, but especially when the country faces $10 trillion in new debt over the next decade on top of the existing $11 trillion national debt. And with the $100 trillion Medicare/Social Security financial bomb lurking in the background, rushing to leap off the financial cliff with this sort of health care legislation would be utterly irresponsible.
Filed under: Health, Welfare & Entitlements; Tax and Budget Policy
Cato on Health Care Reform
We are now facing some of the most sweeping changes health care has seen in decades. Reform is needed, but increasing government control over one-sixth of the economy and over important personal and private decisions — as many of the proposals aim to do — would harm American taxpayers, health care providers, and patients.
This week, the Cato Institute launched Healthcare.Cato.org, which highlights Cato’s contributions to the health care debate. The resources provided on the site provide in-depth analyses of health care issues and reform initiatives, and underscore the ways in which free-market reforms, increased consumer choice, and energized competition — not more government control — improve the quality and cost-efficiency of health care.
Please check back regularly for updates and new resources!
Update: The Cato Institute Conference on Health Care Reform will be Webcast live from 9:00-5:00 PM Wednesday.
Featured speakers:
- Rep. Paul Ryan (R-WI)
- Rep. Michael C. Burgess, M.D. (R-TX)
- Rep. Jason Altmire (D-PA)
- Karen Davenport, Director of Health Policy, Center for American Progress
- Douglas Holtz-Eakin, Former Director, Congressional Budget Office, and Director of Domestic and Economic Policy for the McCain presidential campaign
- Tom G. Donlan, Barron’s
- Karen Tumulty, Time Magazine
- Susan Dentzer, Health Affairs
- John Reichard, Congressional Quarterly
Full schedule of events and Webcast, here.
Filed under: Cato Publications; Health, Welfare & Entitlements
If You Have Health Insurance Today, You Can Keep It (or Not)
During his speech yesterday to the American Medical Association in Chicago, President Obama said not once, but twice that if you have health insurance today and like it, you will be able to keep it under his reform. Shortly afterwards, the congressional budget Office released its initial scoring of the health care bill drafted by Sen. Edward Kennedy (D-MA) and the Senate Committee on Health Education Labor and Pensions (HELP), concluding that it would result in roughly 23 million people losing the insurance they currently have. Oops!
What’s a Trillion Dollars Among Friends?
If you’re Barack Obama, money is no object. The national debt exceeds $11 trillion. We’ve had about $13 trillion worth of bail-outs over the last year. The deficit this year will run nearly $2 trillion. The Congressional Budget Office warns of a cumulative deficit of some $10 trillion over the next decade.
Now Obama-style health care “reform” will add another $1 trillion in increased spending over the same period. And the ultimate cost likely would be higher, perhaps much higher. Reports the Congressional Budget Office:
According to our preliminary assessment, enacting the proposal would result in a net increase in federal budget deficits of about $1.0 trillion over the 2010-2019 period. When fully implemented, about 39 million individuals would obtain coverage through the new insurance exchanges. At the same time, the number of people who had coverage through an employer would decline by about 15 million (or roughly 10 percent), and coverage from other sources would fall by about 8 million, so the net decrease in the number of people uninsured would be about 16 million or 17 million.
These new figures do not represent a formal or complete cost estimate for the draft legislation, for several reasons. The estimates provided do not address the entire bill—only the major provisions related to health insurance coverage. Some details have not been estimated yet, and the draft legislation has not been fully reviewed. Also, because expanded eligibility for the Medicaid program may be added at a later date, those figures are not likely to represent the impact that more comprehensive proposals—which might include a significant expansion of Medicaid or other options for subsidizing coverage for those with income below 150 percent of the federal poverty level—would have both on the federal budget and on the extent of insurance coverage.
Then there is the more than $100 trillion in unfunded Medicare and Social Security benefits.
Just who is going to pay all these bills?
Don’t worry, be happy.
Filed under: Health, Welfare & Entitlements; Tax and Budget Policy
Obama’s Health Care Speech
In his speech to the American Medical Association today, President Obama repeatedly denied that he supports “socialized medicine” or “government-run” health care.
But what is important is not the terminology, but under the proposal supported by the president, government would control more and more of our health care decisions. Government would compel Americans to purchase health insurance, controlling its content, how much we pay, and the relationships between insurers, doctors, and patients. Government bureaucrats would determine whether Americans receive certain medical services.
There may be no better salesman than Barack Obama, but his product is deeply flawed. The so-called “Public Option,” or government-run plan, that President Obama supports would slowly but inexorably lead to the destruction of the private insurance market and the imposition of a government-controlled single-payer system.
But the problems with Obamacare go well beyond the Public Option, which the AMA opposes. The mandates on businesses and individuals, taxpayer subsidies, insurance regulation, and government interference in private medical decisions pose serious threats to American businesses, taxpayers, and most importantly patients.
That’s bad medicine, no matter what you call it.
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