The predominate argument made by the President and congressional liberals for pushing their health care agenda is that it will save the government money in the long run by containing costs. In his usual histrionic fashion Mr. Obama argues his health care plan is vital to controlling future costs and deficits.
"If we do not control these costs, we will not be able to control our deficit," Obama said. "If we do not reform health care, your premiums and out-of-pocket costs will continue to skyrocket. If we don't act, 14,000 Americans will continue to lose their health insurance every single day. These are the consequences of inaction. These are the stakes of the debate we're having right now."
In yet another foolishly candid moment, Vice President Joe Bidden, in a tryst with the AARP told attendees at a town hall meeting that without the Democrat health care plan the nation will go bankrupt and that the only way to avoid that fate is for the government to spend more money.
The Democrats want to spend their way into a healthy economy, which throughout history has never worked. The only way to pay for it is to tax an already overtaxed people or borrow the money further increasing the deficit.
Can government spending really save the economy? It has never worked; every time it has been tried it was a dismal failure. It was tried during the great Depression and it failed, Henry Morgenthau, FDR’s Secretary of the Treasury, wrote in his diary: “We have tried spending money. We are spending more than we have ever spent before and it does not work…We have never made good on our promises…I say after eight years of administration we have just as much unemployment as when we started…and an enormous debt to boot.” The result of Jimmy Carter’s price fixing and tax and spend polices to combat the 1970’s recession was stagflation. Maybe the Democrats in Washington think it will work this time—what is the definition of insanity again: Repeating the same behavior expecting a different outcome? I digress.
According to Doug Elmendorf, the director of the Congressional Budget Office, the house plan shows no fundamental changes hat would reduce the costs of federal health care spending by any significant amount. Instead, the legislation significantly increases the costs the federal government will be responsible to pay.
The CBO estimates the cost will run $1 trillion and will only cover one third of the 48 million uninsured Americans. Furthermore the CBO reports 23 million Americans currently insured will loose their private health care plans.
An editorial in The Washington Times suggests it could be even more expensive costing upwards of $4.5 trillion. The article points out mistakes the CBO made in their calculations, grossly—though not intentionally—underestimating the costs. According to the article the CBO didn’t consider small businesses that employ 10 or less workers. Such businesses account for over 12 million employs and pays out 18.5 billion in health insurance per year. This adds up to $185 billion over ten years that the CBO didn’t take into account in their analysis.
The Washington Post article also quotes estimates made by the Lewin Group a health care policy consulting firm, that estimates that 119 million Americans will switch from their private health care plans to the government plan and if this happens the cost could easily swell to $4.5 trillion over the same 10 year period.
No matter how it all plays out the real burden to Americans will be astronomical; trillions of dollars will be added to the deficit over the next 10 years, millions will loose their private insurance plans, at least 16 million Americans will still be without coverage, and competition between insurance companies and consumer choice will be eliminated by government mandates.
Mr. Obama, who wishfully promises: "we will pass reform that lowers cost, promotes choice and provides coverage that every American can count on, and we will do it this year,” is promoting a fantasy world that in reality will lead to unsustainable deficits, hyper inflation, and a total government takeover of health care.
Showing posts with label Healcare. Show all posts
Showing posts with label Healcare. Show all posts
Monday, July 27, 2009
Saturday, June 20, 2009
The cost of Universal Healthcare
The proposed healthcare reform measure being touted by the Obama White House is a recipe for failure and the result will be a complete government takeover of healthcare. That will mean higher taxes, lower quality of care, larger deficits, and bureaucratic rationing.
Despite a weak economy and facing trillion dollar deficits Barrack Obama is hurrying to restructure the healthcare system at a cost of more than a trillion dollars. The chances of sweeping healthcare reform being enacted are high since a significant number of Americans have come to accept the belief that healthcare for everyone is a civil right. A recent Rasmussen poll shows 42% of Americans believe healthcare is a fundamental right.
According to the White House, the start up cost for this program is estimated to be a whopping $634 billion. According to the Congressional Budget Office, however, the cost will be $1 trillion and will only cover one third of the 48 million uninsured Americans. Further more the CBO reports 23 million Americans will loose their private healthcare plans.
Coming up with the money to pay for this entitlement program is proving to be problematic. As it stands the spending cuts praised by the Obama administration only account for $309 billion and his proposed tax increases will only raise $267 billion leaving a shortfall of $60 billion.
So far the Democrats have refused to tell us how they are going to pay for their health plan. What we do know about the plan is Obama’s intentions to increase taxes on businesses and the wealthy and hire 800 new IRS agents to go after offshore tax shelters.
Obama is also considering a plan that would tax the health benefits provided by private employers. This is the very thing Obama criticized John McCain for during the 2008 presidential campaign. If health insurance was taxed as regular income, the government could potentially collect an additional $250 billion a year. Those costs will be shouldered by everyone insured by their employer, provided employers continue to offer healthcare once the tax shelter is lifted.
One notorious pitfall of any government program is that the program always costs more than originally estimated. One reason is that slick politicians lowball the cost as a market strategy to get the measure past and because there are always hidden costs and unforeseen crisis that require more money to keep the program solvent.
Both Medicare and Medicaid cost significantly more than they were originally estimated by over $60 billion. Medicare will exceed the payroll tax by 2017. Medicare is already committed to paying $38 trillion over the next 75 years. Adding to those costs Obama’s nationalized health plan will run an additional $15 trillion.
Another example is President Bush’s massive $534 billion Prescription Drug Benefit Plan to Medicare. Current estimates now place that at $1.2 trillion by 2015. And that’s not all; the 75 year outlook places the added burden to Medicare at $4.4 trillion.
Nowhere to be found in any of these proposals is how to cover those future costs.
If Massachusetts State run healthcare model teaches us anything it is giving the government greater control over healthcare will result in burdensome consequences for taxpayers and healthcare consumers. The original cost estimate was $125 million. This price tag, however, has risen faster than originally predicted to an excess of $400 million in 2009 and will cost the state an estimated $869 million in 2010. Many recipients of the new Massachusetts health system find themselves without a physician because doctor’s offices aren’t taking new patients.
Politicians, in their vigor to promote entitlement spending, say they can do it all; cut taxes, reduce the deficit, and provide healthcare to everyone at a lower cost. History has shown this to be false. Something has to give; expect higher costs or less coverage. This will result in nothing less than lucrative government contracts financed by the tax payer.
Here we have another expensive federal program when Federal Reserve Chairman Ben Bernanke warned even without this trillion dollar healthcare reform the ever increasing costs of current programs will soon affect interest rates, economic growth and financial stability. Government has shown us that cutting spending in any meaningful way is pure fantasy. Since it is difficult for politicians to relinquish any government program there are only two choices; raise taxes or borrow money further increasing the deficit.
Despite a weak economy and facing trillion dollar deficits Barrack Obama is hurrying to restructure the healthcare system at a cost of more than a trillion dollars. The chances of sweeping healthcare reform being enacted are high since a significant number of Americans have come to accept the belief that healthcare for everyone is a civil right. A recent Rasmussen poll shows 42% of Americans believe healthcare is a fundamental right.
According to the White House, the start up cost for this program is estimated to be a whopping $634 billion. According to the Congressional Budget Office, however, the cost will be $1 trillion and will only cover one third of the 48 million uninsured Americans. Further more the CBO reports 23 million Americans will loose their private healthcare plans.
Coming up with the money to pay for this entitlement program is proving to be problematic. As it stands the spending cuts praised by the Obama administration only account for $309 billion and his proposed tax increases will only raise $267 billion leaving a shortfall of $60 billion.
So far the Democrats have refused to tell us how they are going to pay for their health plan. What we do know about the plan is Obama’s intentions to increase taxes on businesses and the wealthy and hire 800 new IRS agents to go after offshore tax shelters.
Obama is also considering a plan that would tax the health benefits provided by private employers. This is the very thing Obama criticized John McCain for during the 2008 presidential campaign. If health insurance was taxed as regular income, the government could potentially collect an additional $250 billion a year. Those costs will be shouldered by everyone insured by their employer, provided employers continue to offer healthcare once the tax shelter is lifted.
One notorious pitfall of any government program is that the program always costs more than originally estimated. One reason is that slick politicians lowball the cost as a market strategy to get the measure past and because there are always hidden costs and unforeseen crisis that require more money to keep the program solvent.
Both Medicare and Medicaid cost significantly more than they were originally estimated by over $60 billion. Medicare will exceed the payroll tax by 2017. Medicare is already committed to paying $38 trillion over the next 75 years. Adding to those costs Obama’s nationalized health plan will run an additional $15 trillion.
Another example is President Bush’s massive $534 billion Prescription Drug Benefit Plan to Medicare. Current estimates now place that at $1.2 trillion by 2015. And that’s not all; the 75 year outlook places the added burden to Medicare at $4.4 trillion.
Nowhere to be found in any of these proposals is how to cover those future costs.
If Massachusetts State run healthcare model teaches us anything it is giving the government greater control over healthcare will result in burdensome consequences for taxpayers and healthcare consumers. The original cost estimate was $125 million. This price tag, however, has risen faster than originally predicted to an excess of $400 million in 2009 and will cost the state an estimated $869 million in 2010. Many recipients of the new Massachusetts health system find themselves without a physician because doctor’s offices aren’t taking new patients.
Politicians, in their vigor to promote entitlement spending, say they can do it all; cut taxes, reduce the deficit, and provide healthcare to everyone at a lower cost. History has shown this to be false. Something has to give; expect higher costs or less coverage. This will result in nothing less than lucrative government contracts financed by the tax payer.
Here we have another expensive federal program when Federal Reserve Chairman Ben Bernanke warned even without this trillion dollar healthcare reform the ever increasing costs of current programs will soon affect interest rates, economic growth and financial stability. Government has shown us that cutting spending in any meaningful way is pure fantasy. Since it is difficult for politicians to relinquish any government program there are only two choices; raise taxes or borrow money further increasing the deficit.
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