American Elephants

“If You Like Your Current Health Insurance” and Other Fantastic Stories from the World of Make-Believe. by The Elephant's Child
August 12, 2009, 1:49 am
Filed under: Economy, Freedom, Health Care, Statism | Tags:

In a “Town Hall Meeting” in New Hampshire today to promote his health care agenda, President Obama once again reassured Americans that they can keep their existing health plans.  The benefits and access that they like will only be enhanced through his reform plans.

So the promise is that only by expanding government control of health care can we bring down the cost of health care.  They want to insure the uninsured, cover illegal immigrants and give insurance to those who have pre-existing conditions.  In the first place there are around 45.7 million uninsured, there are an estimated 10-12 million illegal immigrants, and nobody knows what the pre-existing conditions amount to.   All this, and it’s going to be cheaper?  It makes no sense at all.

Congressional Democrats claim that their bills will be “budget neutral.”  The nonpartisan Congressional Budget Office says it will cost over $1.5 trillion in the first decade, and another trillion in the second decade.  Costs will grow, Douglas Elmendorf, CBO Director says, at 8 percent a year while revenues grow at only 5 percent.  We would seem to have a little math problem here.

When Medicare was established in 1965, it was projected by the CBO to cost $12 billion by 1990.  By 1990, Medicare actually cost $110 billion.  This is not meant to cast aspersions on the Congressional Budget Office, but simply to point out that estimating the future is far from a sure thing.

Medicare is close to going broke.  The first baby boomers will begin to retire next year, with the peak year of the baby boom not reached until 2024, when numbers will finally begin to decline.  At present, Medicare and Medicaid reimbursement to doctors and hospitals does not pay the costs, and there is cost shifting to regular patients.  We are told that waste and fraud are rampant in Medicare and Medicaid, yet there is nothing in the health care bills in the House or the Senate that addresses waste and fraud at all.  In fact the plan is to cut Medicare payments to doctors, hospitals and suppliers by another $483 billion.

In many areas it is hard for older Americans to find doctors who will accept Medicare patients.  This is not exactly designed to help solve that problem.  Doctors have estimated that many physicians will retire early if government takes over health care.  We have a shortage of doctors now.

Besides cutting Medicare payments, the Obama administration has claimed that preventive care —  early diagnosis that can reveal a condition that is treatable at a fraction of the cost of treating that same illness after it has progressed — will help to pay for health care.  Not so fast, says the Congressional Budget Office. the evidence suggests that for most preventive services expanded utilization leads to higher, not lower, medical spending overall.  Doctors do not know beforehand which patients are going to develop costly illness.

So, first they plan to tax the rich, which will mean a 60 percent marginal rate in high tax areas.   Since a large percentage of “the rich” are not individuals but small businesses filing as individuals, this will mean more job losses.   They plan to let the Bush tax cuts of 2001 and 2003 expire —that means tax increases of from $1,716 -$3,637,  And the marriage penalty will return.

There are serious discussions of a value-added tax (VAT) which adds an additional tax at each stage, for example, from raw material to finished product, which just makes every good or service cost more.  And that does not include the Waxman-Markey climate bill which may be postponed till next year, or the billions thrown away on the cash-for-clunkers boondoggle.  And I recently read that some are talking about a second stimulus plan, since the first one has been so ineffective.

We have been hearing for years that our public schools were ineffective in teaching math and science.  It appears that those failures have now reached into the Congress of the United States.  Who knew?

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