Health Care Reform — How About Flirting With Reality?
Health Care Reform — How About Flirting With Reality?
By
Ken Eliasberg
Again, calling upon common sense and invoking just a touch of caution, if not outright skepticism, let’s examine the proposed health care reform measure that emerged from the House against the background of certain clear realities. Here I want only to address the Bill in general terms; we’ll look at the Bill’s specifics down the road (and, let me assure you — you will not be pleased with the results).
Costs (cont.).- We briefly alluded to costs at the conclusion of last week’s column, and as therein pointed out, the cost estimates range from 1.2 trillion to 2.6 trillion dollars. Based on my years in government, and even many more years spent either observing the manner in which they operate, or, on occasion, having to interact with them, let me make a prediction — the actual cost will dramatically exceed the high end of the current estimates, i.e. the final tally will easily eclipse the 2.6 trillion dollar figure. Why do I say that? Because I would bet the farm that, over the last 50 years, almost no governmental cost estimates came in close to the actual costs for the program in question; in almost every instance the estimate fell far short of the reality (which is why, in a previous column, I jokingly suggested that they would do better with ouija board than whatever method they were actually using to produce their estimate).
And, by the way, for present purposes, I am accepting the internal integrity of the current proposal, i. e that the items contained therein are accurate and honest, reflecting the current situation. Actually, I don’t believe that for a second; I have never seen an Administration that practices more slight of hand than this one. That said, for purposes of this discussion I am focusing exclusively on the accuracy of their cost estimates.
Let me give you a very pertinent illustration, one directly on point — the estimates pertaining to Medicare and Medicaid. While there are any number of excellent articles and columns on this subject, let me just refer to one that makes my point succinctly and thoroughly, Health Costs and History — Government programs always exceed their spending estimates, online,wsj.com October 20, 2009. In the column the authors provide a chart that illustrates how far wide of the mark the “estimators” were with respect to both Medicare and Medicaid, e.g. they estimated that medicare would cost $12 billion in 1990; it actually cost $110 billion. Estimates with respect to Medicaid were even more substantially exceeded. The authors made this observation:
“Medicare has a similar record. In 1965, Congressional budgeters said that it would cost $12 billion in 1990. Its actual cost was $90 billion. Whoops. The hospitalization program alone was supposed to cost $9 billion but wound up costing $67 billion. These aren’t small forecasting errors. The rate of increase in Medicare spending has outpaced overall inflation in nearly every year (up 9.6% in 2009), so a program that began at $4 billion now costs $428 billion.
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The lesson here is that spending on nearly all federal benefit programs grows relentlessly once they are established. This history won’t stop Democrats bent on ramming their entitlement into law. But every Member who votes for it is guaranteeing larger deficits and higher taxes far into the future. Count on it.”
We’ll have more to say about costs down the road, but for the nonce I refer you to a couple of worthwhile columns: What they said it would cost vs. what it actually cost by Mona Charen in the Washington Times on 11/2/09 and a 4-part series by economist and Hoover Institute scholar Thomas Sowell entitled The ‘Costs’ of Medical Care appearing at townhall.com on 11/3-6/09
Closing this phase of this discussion out, let me just make this observation: If you believe that this Bill will come in any where close to the estimated cost (even though the estimate itself is ridiculously excessive), I assume that you also believe in the tooth fairy.
And, taking a closer look at Medicare (a system which the current proposal seems to build on), it is worth pointing out that the system is teetering on the brink of bankruptcy. Indeed, it is more accurate to say that the system is bankrupt since the unfunded liability necessary to meet its obligations is between 50 and 90 trillion dollars, depending on whose estimate you look to and the time period on which their actuarial assumptions are based. It is my understanding that receipts will exceed disbursements for less than the next 10 years, and the entire system will be bankrupt within the next 30 years. Now let’s see, we have trillions of dollars of debt, we are proposing a health care measure that its proponents concede to exceed 1 trillion dollars, our present health care system is bankrupt, and we are asked to be true believers with respect to that current proposal? How stupid do these people think we are? Apparently, very stupid!
Furthermore, according to polls, between 70 and 90% of Americans are happy with their current health care coverage. Interestingly, more than 50% believe we have a health care coverage problem. In other words, they’re satisfied with their situation, but they’re concerned with that of their neighbor. Why this disparity? Simple, over the last 12 months we have been bombarded by the Obama Administration, their acolytes, and their sycophants in the mainstream media with the news that we have a “health care crisis.” Also, bear in mind, polls can, and frequently are, so slanted in the questions they ask that you can produce virtually any answer you want, depending on who is conducting the poll and the questions they pose therein. For example, if you ask the question would you be happy with the exact coverage you now have were it to be provided on a cost-free or cost-reduced basis, what answer do you think you are going to get? Of course, they would!! But that’s not the way it works in the real world — and you know it!
Finally, all that I ask of the reader is that, in assessing any proposal advanced by any political faction that calls upon you to accept the notion that government is going to solve your problems, is going to do it efficiently, and is going to reduce your costs for the service, please draw on your experience with government in other contexts to properly evaluate the proposal. Also, when you look at a reduced-cost offering, don’t just look at the cost suggested in the measure under consideration (which, as I have indicated above, is baloney), but look at the indirect costs associated with the measure’s implementation. For example, look at the increased taxes which the Bill will engender. Look at the increased premiums that the insurance companies are going to have to charge. In other words, look at the Bill in the context of the real world. Also, using your common sense, consider and measure cost in terms of the quality of health care that you are likely to receive if the government takes over our health care system, and, make no mistake about it, this proposal, should it go through, is just the first step on the journey to that destination.