Health-care "reform" always costs more than predicted, as ObamaCare provisions have at the state level. So the claim that the new, cheaper version of Obama's healthcare plan will cost only $829 billion, while not increasing the deficit, should be taken with a grain of salt.
Senate Majority Leader Harry Reid admitted that the actual cost will be more like $2 trillion, and health-care experts have given it a similar price tag of more than $2 trillion. And the typical family would eventually pay $4,000 more a year.
The reason for the lower $829 billion price tag was that the bill's supporters promised to offset its costs by making massive cuts in Medicare that no one actually expects politicians to follow through on, since Medicare cuts infuriate seniors and doctors.
Year after year, Congress waives "the annual cut in fees paid by Medicare to physicians" mandated by an earlier law. Yet, now, backers of ObamaCare claim they will cut Medicare by much more to finance coverage of the uninsured. The most recent version of ObamaCare drafted by Senator Max Baucus of Montana claims it will also make "$240 billion in cuts to hospitals, home care providers, nursing facilities and hospices." Based on Congress's past track record, the chance of this happening is zero.
As economist and former Congressional Budget Office director Douglas Holtz-Eakin notes in the Wall Street Journal, the promised cuts to pay for ObamaCare will not happen: "Congress will not allow doctors to suffer a 24% cut in their Medicare reimbursements. Senate Democrats chose to ignore this reality and rely on the promise of a cut to make their bill add up. Taking note of this fact . . . destroys any pretense of budget balance."
As Holtz-Eakin notes, some "middle-class families would get hit with a double-digit increase in their marginal tax rate" under this version of ObamaCare.
Moreover, state budget deficits and state taxes will increase under ObamaCare, which outsources costs to the states by requiring states to expand their Medicaid programs for poor people.
Backers of ObamaCare have refused to cut medical costs through tort reform, with Senate Majority Leader Harry Reid saying it will save "only" $54 billion. Yet they justify ObamaCare partly on the alleged need to prevent uninsured people from not paying their medical bills -- even though unpaid medical costs are only 2 percent of all medical costs, a small multiple of the amount Reid admits could be saved from tort reform. (Tort reform would cut the wealth of trial lawyers, who are some of the biggest supporters of the Democratic Party). In reality, tort reform would save far more than $54 billion.
The Pacific Research Institute estimates that just one type of cost that could be reduced through malpractice-lawsuit reform -- defensive medicine -- costs around $200 billion annually (which is almost as much as France spends annually on healthcare for all of its citizens; France has no punitive damages, few lawsuits against doctors, and "loser-pays" rules).
One reform -- setting up specialized health tribunals to hear malpractice cases -- would be particularly helpful. Replacing uninformed juries with specialized health courts would provide more consistent rulings from case to case, eliminate meritless cases, reduce defensive medicine, and more speedily compensate injured people who truly are victimized by doctors' carelessness. Such tribunals already exist in countries like "Sweden, Denmark, Finland, Iceland and New Zealand."
Comprehensive tort reform would also reduce lawyers' wages, resulting in some additional students choosing to go to medical school (where a critical shortage of doctors is projected over the next decade) rather than to law school (there are already too many lawyers, who sometimes can make work for themselves by bringing "creative" lawsuits). At least two of my law school classmates had already gone to medical school before going to law school (one decided to become a medical malpractice lawyer). At least a dozen that I know of had considered going to medical school instead. But life is easier as a lawyer, and you don't get sued as much if you are a lawyer rather than a doctor. As long as professionals like lawyers get paid a lot, doctors will have to be, too -- greater "wage inequality" in the U.S. means that we have to pay doctors more than other countries do to get the same number of people to become doctors. (The looming shortage of doctors is aggravated by arbitrary restrictions placed on highly-qualified immigrant doctors, who have to repeat their residencies all over again in the U.S. even if they manage to immigrate to the U.S.).
Another reform opposed by Obama that would make health insurance cheaper would be to let people buy cheaper insurance across state lines, which an antiquated federal law now prevents. Countries with cheaper health insurance permit national competition among insurers.
Martin Feldstein, one of Obama's own advisors, has said that Obama’s health-care plan would explode the federal budget deficit and lead to “crippling deficits,” as well as “higher taxes, debt payments, and interest rates” that would cut America’s standard of living. Feldstein also noted that Obama’s health-care plan would harm people with insurance, and predicted that it would lead to massive tax increases. Other analysts have predicted that it will drive up medical costs and inflation.
Obama is relying on $2 trillion in imaginary savings to pay for his health care plan. He is also relying on tax increases, which breaks Obama’s campaign promise not to raise taxes on the middle class.
Fact-checkers say Obama is lying about health-care. CNN Money says ObamaCare would take away 5 freedoms.
Comments
I keep saying that I must really be out of the loop with this "new math" principle being thrown at us, but I am NOT understanding how this calculation is being done. I know at my house I cannot make money magically appear whenever I want it and my money tree is pretty bare. Are the American people perceived as so stupid that these fools can just push anything our way and we swallow it? Scary!
This article provides no rational of how they came with $2T price tag. Also, it is misleading on medicare. The administration focuses on GW's pork-barrel bonanza to insurance companies. The saving will not be from benefits cuts but from taking administration of program that are outsourced to insurance companies at heft price tag. Yes, reforms are needed to address unnecessary procedures and prevent fraud.
YUP
Prove that tort reform will save $54 billion per year. At the least, give a reference to substantiate your declaration. And your source for the "$4,000" per year increase in premiums is, let me guess, the insurance industry's lobbying arm?
Looks like you have a fuzzy math problem. Let us reform the system without misinformation from the peanut gallery -- change is badly needed. The insurance companies are ripping us off and reaping big rewards while you whine away.
Something needs to be done! We need to see how this plays out. Too many people jump to conclusions before the end result is voted on.
It's interesting that when confronted with the reality of the policies they advocate, liberals can offer little more than slogans and personal attacks. Could it be that even they recognize the emptiness of their arguments?
I think you need to do a little more research before stating that Congress will not cut Medicare and Medicaid. They have in the past and will in the future. They come up with new ways of calculating payments using formulas and some times, just flat reducing reimbursements. The real problem with Obamacare is that it does nothing to actually reduce medical costs, most of which can be traced to a fee-for-service reimbursement model that encourages waste.
This all seems very reminiscent of the $900.00 hammers the Federal Government used to buy. $30-50 for a box of tissues at the hospital during an overnight stay? $60 for a box of latex gloves? Really, man? C'mon. I for one am tired of "5Star prices ... for 2Star prices". Drive down the cost of medical care / procedures. Stop THAT fleecing, and you'll see other, associated costs drop right along with it.
blah ... "5Star prices ... for 2Star quality". Sorry.
"9796 says:
Something needs to be done! We need to see how this plays out. Too many people jump to conclusions before the end result is voted on."
It will be too late by then.
The Obama promise of transparency went out the window when the so-called stimulus bill was passed and signed with no chance for anyone actually to see what was in it. The same will be true of the so-called health care “reform”. The Peolsi/Reid/Obama troika, along with the Chicago gang of czars will make sure that Congress will rubber-stamp any White House whim. Please! 2010 is our next chance to dump the rubber-stamp Congress. Let’s use the 2010 elections to send a message to Washington that we are sick of empty promises.
I think a little better understanding of medical education is required before making a blanket statement like the shortage of doctors is "...aggravated by arbitrary restrictions placed on highly-qualified immigrant doctors, who have to repeat their residencies all over again in the U.S. even if they manage to immigrate to the U.S."
The restrictions are by no means arbitrary, and immigrant doctors are by no means "highly-qualified" simply because they practiced medicine in another country.
Part of the reason they have to repeat their residency is to prevent a massinve influx of foreign docs washing ashore with entirely different standards of medical care, training, expertise, and patient population experience.
Removing the training & board certification requirements for foreign docs is absolutely in no way part of the solution.
I'd be more than happy to discuss the issue further.
jpeaton@iupui.edu
Mona says that we have a "fuzzy math problem." I will be the first to agree but how amusing that she is referring to comments coming from a "peanut gallery" when we are dealing with a bunch of nuts in our government at this point who are actually putting that "fuzzy math" in front of us without any explanations for the REAL math! Yes, there needs to be reform but they had better put out a much better picture for us than the debt they plan(even though they said they won't be adding to the deficit --- uhhhhh . . . .), with little to no better care in the end.
All the criticisms by people below were by people who failed to click on my links (the blue text in my article) to sources substantiating what I said. What can be said about someone who demands to know the source for information, even while refusing to look at the source when it is given?
I cited to experts about the cost of ObamaCare, and an admission -- an admission! -- by one of it's chief supporters in the Senate, all of which say it will cost $2 trillion.
And, no, it won't be paid for by cutting payments to profit-making insurance companies. That wouldn't pay for even a nickel on every dollar in its costs.
The largest insurer in almost every state is a non-profit -- like Blue Cross. Nonprofit insurers are not measurably cheaper than for-profit insurers. And the for-profit insurers only make pennies on the dollar of insurance premiums.
Cuts to Bush's Medicare Advantage can't pay for its cost, either, and even the bill's sponsors don't claim it will pay for most of t
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