BuckeyeBlog

If you really think the health care proposals being debated in DC will cost less than $1 trillion over ten years, the Wall Street Journal today has some history of other government health care programs that should disabuse you of that notion:

The House Ways and Means Committee estimated that [Medicaid's] first-year costs would be $238 million. Instead it hit more than $1 billion, and costs have kept climbing.

Thanks in part to expansions promoted by California’s Henry Waxman, a principal author of the current House bill, Medicaid now costs 37 times more than it did when it was launched—after adjusting for inflation. Its current cost is $251 billion, up 24.7% or $50 billion in fiscal 2009 alone, and that’s before the health-care bill covers millions of new beneficiaries.

Medicare has a similar record. In 1965, Congressional budgeters said that it would cost $12 billion in 1990. Its actual cost that year 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 9.8% in 2009), so a program that began at $4 billion now costs $428 billion.

In a Viewpoint I wrote a little while ago, I raised a concern about the burden the health care legislation making its way through Congress would impose on state taxpayers. While health insurance regulation and Medicare are receiving the bulk of the attention in this debate, all the legislation passed by House and Senate committees contain expansions of Medicaid, which pays for the health care of the poor and near-poor. Medicaid is a joint state/federal program and it is a significant portion of the state budget. Expanding this program will cost state taxpayers dearly.

The Columbus Dispatch has a story today about just how much that cost may be:

As Ohio officials try to close an $850 million budget hole, the key U.S. Senate health-care overhaul package could cost Ohio $922 million in additional Medicaid spending in the plan’s first five years.

Taxpayers should note that this figure was calculated using the assumption the federal government would pay 95% of the cost of the newly-expanded Medicaid. Currently the federal government pays 60% of Ohio’s Medicaid cost. It is highly unlikely that the feds will shoulder 95% of the cost in the final bill or, if they do, that this number will last more than a few years.

Ohio taxpayers should be aware of just how expensive this health care “reform” legislation will be to them not only at the federal level, but also at the state level.

Sen. Max Baucus unveiled his health care plan yesterday and one of its main selling points is that it won’t add to the deficit, according to CBO’s score for the bill. Most of the Baucus bill’s costs would be paid for by reducing spending on Medicare. As Peter Suderman over at Reason magazine’s blog points out, though, the CBO also issued this warning about how unlikely it is that Congress will actually reduce Medicare’s spending:

These projections assume that the proposals are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation. For example, the sustainable growth rate (SGR) mechanism governing Medicare’s payments to physicians has frequently been modified (either through legislation or administrative action) to avoid reductions in those payments.

Currently, Medicare payments to physicians are supposed to go down automatically if spending in the program accelerates at too rapid a pace. Congress can override these automatic cuts, though. As CBO point out, Congress often does just this. What CBO doesn’t point out is that Congress does this in response to fierce lobbying by physicians and other providers who benefit from Medicare’s payment rates.

I fail to see anything in the Baucus legislation that will either reduce this lobbying or strengthen the spines of members of Congress to resist it. In short, if you think the Baucus bill won’t add to the deficit, you haven’t been observing Congress very closely.

In his health care speech last night, President Obama said he would “call out” those who misrepresent his plan. Fair enough, there has been a lot of misrepresentation about health care reform legislation from those who oppose it. However, there has also been a lot of misrepresentation about this plan from the President and his allies. So, in the spirit of Pres. Obama, I’m going to “call him out” on a few of his misrepresentations last night:

“…in 34 states, 75 percent of the insurance market is controlled by five or fewer companies. In Alabama, almost 90 percent is controlled by just one company. And without competition, the price of insurance goes up and quality goes down.” – True enough. However, Pres. Obama goes on to say the remedy for this is to have the government “compete” against private insurance. How about the government allow private insurance companies to compete against each other? The reason insurance companies can dominate markets like Obama says is because the federal government enacted a law in 1945 leading to a situation where state governments impose rules and regulations on insurance companies that stifle competition. If you want more competition, Mr. President, we don’t need more rules and regulations. We don’t need a government insurance plan. We need the federal government to repeal the McCarran-Ferguson Act and allow insurance companies to compete with each other.

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In Cincinnati yesterday, President Obama made this astounding claim about those who oppose his health care “reform” plan: “I’ve got a question for all those folks: What are you going to do? What’s your answer? What’s your solution? And you know what? They don’t have one.”

You’d think the President would do a little research before speaking, since what he said was 100% false. There are plenty of ideas out there from those of us who oppose his plan. Peter Suderman over at Reason magazine does the president’s job for him and lists some of the solutions Obama says don’t exist.

Not very, according to this article:

Health insurers, in fact, ranked below many other industries in profitability, including other health sectors, according to the latest Fortune magazine rankings. While pharmaceutical companies were the third-most profitable industry last year, with a 19.3 percent profit margin, health insurers ranked 35th, with a 2.2 percent profit margin. Health insurers also ranked lower in profitability than medical products and equipment makers, pharmacies and medical facilities.

Those who say the profit motive destroy health care in this country are ignorant not only of basic economics but also the health care marketplace. Many health insurers and health care providers are non-profit organizations. And even those health insurance companies that are for-profit don’t have very high profit margins. Even if the federal government confiscated every dollar in profit made by health insurance companies it would do almost nothing to reduce overall health care spending.

A New York Times article on the liberal push to support President Obama’s health care “reform” mentioned this:

Other people were stoked by personal causes that seemed in some cases only peripheral to a broader societal debate.

“I’m out here if it will help one more kid get medication,” said Johari Ade-Green, 58, of Denver, who was holding a sign with a picture of her grandson, Zumante Lucero, who died in July at age 9 from complications of asthma. Her grandson had insurance under Medicaid and Social Security, she said, but through a mix-up was denied medication.

It’s undeniably tragic that this child died, especially when it sounds like his death could have been prevented. But didn’t anyone there notice that this child died while on Medicaid? That it was a mix-up on the part of government health care that killed the child? Maybe I’m biased (OK, I’m certainly biased), but it seems this child’s story is a good reason why we should oppose an expansion of government health care, especially the government option that is so near-and-dear to the hearts of the people at this rally.

In a conference call with religious leaders, President Obama said there was a lot of misinformation in the health care debate. That’s true. Of course, much of that misinformation is coming from him. As Michael Tanner points out in the Orange County Register, the claim that people will be able to keep their insurance if they like it just isn’t true:

…under Section 59(B)(a) of HR3200, the bill making its way through the House, and Section 151 of the bill that passed out of a Senate committee, every American would be required to buy health insurance.

And not just any insurance: to qualify, a plan would have to meet certain government-defined standards. For example, under Section 122(b) of the House bill, all plans must cover hospitalization; outpatient hospital and clinic services; services by physicians and other health professionals, as well as supplies and equipment incidental to their services; prescription drugs, rehabilitation services, mental health and substance-abuse treatment; preventive services (to be determined by the Centers for Disease Control and Prevention and the United States Preventive Services Task Force); and maternity, well-baby, and well-child care, as well as dental, vision, and hearing services for children under age 21….

If your current health insurance doesn’t meet all those requirements, you won’t be immediately forced to drop your current insurance for a government-specified plan. But you would be required to switch if you lose your current insurance or “if significant changes are made to the existing health insurance plan.”…

Seniors, too, could lose their current coverage, at least the 10.2 million seniors currently participating in the Medicare advantage program. That program offers many seniors benefits not included in traditional Medicare, including preventive-care services, coordinated care for chronic conditions, routine physical examinations, additional hospitalization, skilled nursing facility stays, routine eye and hearing examinations, and glasses and hearing aids But the House bill cuts payments to the Medicare Advantage program by roughly $156.3 billion over 10 years.

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This month’s Atlantic has an excellent article about the problems facing our health care system. The author’s suggestions on how to fix our system are far better than anything currently being discussed in DC or at town halls. If you read this article and truly understand it, you’ll be better informed on health care than probably 95% of your fellow Americans.

Some excerpts:

I’m a Democrat, and have long been concerned about America’s lack of a health safety net. But based on my own work experience, I also believe that unless we fix the problems at the foundation of our health system—largely problems of incentives—our reforms won’t do much good, and may do harm. To achieve maximum coverage at acceptable cost with acceptable quality, health care will need to become subject to the same forces that have boosted efficiency and value throughout the economy. We will need to reduce, rather than expand, the role of insurance; focus the government’s role exclusively on things that only government can do (protect the poor, cover us against true catastrophe, enforce safety standards, and ensure provider competition); overcome our addiction to Ponzi-scheme financing, hidden subsidies, manipulated prices, and undisclosed results; and rely more on ourselves, the consumers, as the ultimate guarantors of good service, reasonable prices, and sensible trade-offs between health-care spending and spending on all the other good things money can buy.

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It’s a common talking point by those pushing health care “reform” that those who are oppose the legislation making its way through Congress are merely shills for the health insurance industry. This contention, as Tim Carney points out in a few different places, ignores a few things. One, the health insurance industry is pushing hard to enact health care reform and essentially supports the legislation that is emerging from Congress. Two, the health insurance industry is giving campaign contributions heavily to those who are authoring the reform:

The insurance industry gave 60% of its money to Democratic candidates in 2008 and so far has given 65% of its money to Democrats in the 2010 cycle, according to OpenSecrets.org.

The top recipient of health insurance PAC money this cycle is Henry Waxman, chief author of the House “reform bill,” who is tied with Harry Reid for that honor.

In 2008, the top recipient of HMO money was Barack Obama, and the top non-presidential recipent was Max Baucus, chief Senate author of “reform.”

Maybe any liberals who are in favor of this “reform” can post a comment or two about how they feel being patsies for the health insurance lobby.