CBO reports, entitlements and “shared responsibility”
A new CBO report on the health proposal coming out of Washington shows a significant reduced cost while magically insuring more people. Anthony Randazzo from the Reason Foundation lays out the problems with what Democrats are pushing, even if Washington managed a smaller price tag for the proposal:
Whew, health care will only cost $611 billion! That’s the line in Washington right now. An estimate from the CBO on the draft legislation from the Senate health committee is $1 trillion less than its estimate of a previous draft version. Of course the massive cut has the effect of making $611 billion seem like a small number, as the massive numbers coming out of Washington increasing dull away the enormity of the spending numbers. What’s another billion or so? is now common thought. And a million dollars… well, that’s just candy money.
Yesterday, I tried to argue that from an economic theory perspective, the health care costs don’t make much sense. The analysis is largely apart from the debate of the effectiveness of a government plan, though it is worth noting that the CBO also suggests that $611 billion would only cover 39 percent of the uninsured. And that likely means more spending in the future, so don’t get too comfortable with the $611 billion.
Randazzo also points out that even if the cost is less than previously reported, we still have a massive national debt to contend with. We just don’t have the money. I’d point out that if they raise taxes to “pay” for this, they’re putting economic growth at risk.
There is no talk of the long-term funding issues with Medicare, which has unfunded liabilities of $31.8 trillion (p.28). So while we hear a lot about these supposed savings, the long-term is still in question. And don’t forget, taxpayers were told that Medicare expansion in 2003 would cost $400 billion over the first 10 years. In 2005, the cost was reassessed at $1.2 trillion in the same span. The second decade of the program was even more costly at $2 trillion.
Also, if you don’t have or don’t want health insurance coverage, you face a $1,000 fine. Of course they don’t call them fines, they call them “shared responsibility payments.” That has a nice collectivist ring to it, doesn’t it?