Health care "reform": $2.5 trillion in the first 10 years

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Why on earth does anyone, left-wing or right-wing, think this is a good idea?

In its real first 10 years (2014 to 2023), the CBO says that the bill would cost $1.8 trillion -- for insurance coverage expansions alone. Other parts of the bill would cost approximately $700 billion more, bringing the bill's full 10-year tab to approximately $2.5 trillion -- according to the CBO.

In those real first 10 years (2014 to 2023), Americans would have to pay over $1 trillion in additional taxes, over $1 trillion would be siphoned out of Medicare (over $200 billion out of Medicare Advantage alone) and spent on Obamacare, and deficits would rise by over $200 billion. They would rise, that is, unless Congress follows through on the bill's pledge to cut doctors' payments under Medicare by 21 percent next year and never raise them back up -- which would reduce doctors' enthusiasm for seeing Medicare patients dramatically.

And what would Americans get in return for this staggering sum? Well, the CBO says that health care premiums would rise, and the Chief Actuary at the Centers for Medicare and Medicaid Services says that the percentage of the Gross Domestic Product spent on health care would rise from 17 percent today to 21 percent by the end of 2019. Nationwide health care costs would be $234 billion higher than under current law. How's that for "reform"?

Sen. Tom Coburn, M. D., doesn't think it's a good idea. From his Wall Street Journal op-ed:

My 25 years as a practicing physician have shown me what happens when government attempts to practice medicine: Doctors respond to government coercion instead of patient cues, and patients die prematurely. Even if the public option is eliminated from the bill, these onerous rationing provisions will remain intact.

For instance, the Reid bill (in sections 3403 and 2021) explicitly empowers Medicare to deny treatment based on cost. An Independent Medicare Advisory Board created by the bill--composed of permanent, unelected and, therefore, unaccountable members--will greatly expand the rationing practices that already occur in the program. Medicare, for example, has limited cancer patients' access to Epogen, a costly but vital drug that stimulates red blood cell production. It has limited the use of virtual, and safer, colonoscopies due to cost concerns. And Medicare refuses medical claims at twice the rate of the largest private insurers....

But the most fundamental flaw of the Reid bill is best captured by the story of one my patients I'll call Sheila. When Sheila came to me at the age of 33 with a lump in her breast, traditional tests like a mammogram under the standard of care indicated she had a cyst and nothing more. Because I knew her medical history, I wasn't convinced. I aspirated the cyst and discovered she had a highly malignant form of breast cancer. Sheila fought a heroic battle against breast cancer and enjoyed 12 good years with her family before succumbing to the disease.

If I had been practicing under the Reid bill, the government would have likely told me I couldn't have done the test that discovered Sheila's cancer because it wasn't approved under CER. Under the Reid bill, Sheila may have lived another year instead of 12, and her daughters would have missed a decade with their mom.

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Trey said:

The CBO informed the White House today that this bill "will reduce the deficit by $132 billion over the first decade, and more than $1 trillion in the decade after that."

mark said:

"Why on earth does anyone, left-wing or right-wing, think this is a good idea?"

I keep wondering the same thing, Michael. Speaking from the "left" on this issue, the current bills are poster children for the only appropriate solution to our dysfunctional, immoral healthcare system -- a "single-payer" plan.

I'm sick and tired of my hard-earned premiums funding stock dividends, and unseemly bonuses for the managers of private insurers for doing little more than moving our money around.

Whatever inefficiencies might exist in a single-payer system would be more than outweighed by the savings gained by consumers through the elimination of insurance company profits and excessive executive pay schemes. And that's before one even considers the moral imperative of covering all in need.

Roy said:

Who? Mark. Mark answered your question, Mike.

Mark thinks insurance folks charge more than they should. Mark could desire what best makes insurers servants, who in order to gain clients improve services and lower costs. Increased competition would bring that result. Instead, Mark wishes to remove all competition. He wishes a system where insurers have no reason for concern about what the insured desires, no concerns regarding the actual costs of their choices.

Mark claims premiums have too great ("unseemly") a difference from the payouts. He appears to believe that insurance, if the truth were known, really has significantly less inherent costs. I think Mark's claim could apply. But he certainly does not show that it does.

Perhaps, contra Mark, the reason the insurance premiums don't cost him a LOT more is because the insurer (providing a service and doing the involved work) takes his payments and invests them (at the best rate of return in a stock divident market Obama and especially Obamacare is trashing). Then, if Mark does make a claim, the insurer can draw not merely from Mark's money stacked in a closet somewhere (worth less because of Obama influenced inflation), but also from money Mark's money has enabled the insurer to earn. I recommend Mark spend some time mastering Excel or some similar spreadsheet tool so that he can show whether his claim has validity (or find out the limits of his claim).

In short: people not having done their homework think Obamacare a great idea.

As far as Mark's moral imperative is concerned: I agree. That's why I volunarily give a significant percentage of my income to the diaconal work of the church where I am a communicant member. Direct, local contact with lowest cost personaly tailored, specific situation assistance. This in spite of taxes taking large percentages in which much more than half goes to beauracratic overhead in order to accomplish distant, impersonal, one size fits all assistance.

Others may debate whose moral imperative is more honest, more genuine: one in which I spend my own resources on behalf of others, or one in which Mark wishes to spend others' resources on behalf of others.

Stern said:

I'm going to try one last time to comment on this (this is my 3d try - Mike, the comments are ENTIRELY lost when you mistype the captcha at the end, so I'm a tad frustrated)

Roy, I am completely with you on one point, namely that government bureaucracy is extremely difficult to deal with on any level. Even if the government were able to attract very talented people, which it is, all of the necessary rules against self-dealing, self-promotion, personal service contracts, etc. make things overy stringent on the workers.

Let me turn your argument on its head, though. What we have now is financial services companies who are making decisions about rationing health care based on their profit margins. They take the money that we pay in premiums, and return some of it to the "subscribers" in paying for health care coverage, but use the rest to pay company operational overhead, and investment costs (trading fees, interest on bonds and commercial paper and the like), and interest on bank loans, and salaries to the people who actually do the work, and to the executives.

Over the past 25 years, you'll see that whenever the equities market has trouble, there is suddenly a "crisis in medical insurance." But this is a crisis of the insurers.

Those of us who are lucky enough to have generous employers who cover part of the premiums don't really feel this particular pain; those who are unfortunate enough to need to be on Medicaid do not feel this pain. The ones who truly feel this pain are those who are forced to buy insurance on the open market, if it's even available. When I had to buy coverage for me and my family when I was out of work or underemployed for 18 months, the cost was over $1500 per month - PER MONTH! This is doubtless more than the average mortgage payment in Tulsa or Minneapolis for a $150,000 home with 10% down.

And a final point, if I may. Those of us who do swing from the left hand side of the plate are perfectly capable of doing math, although I admit that graduate level Diff Eq nearly killed me. It's not productive on any level to call names. The president is clearly not a Marxist, he's not anti-business, and he's not even anti Wall Street. I don't think that even an incautious analysis of what he's said or done could lead a person to say such things.

I was unaware of the CAPTCHA problem. Very sorry about that. I will see if there's a fix for it.

MDB said:

Test of CAPTCHA problem

MDB said:

It looks like your comment will be saved if you use the "back" browser function from the CAPTCHA error page. You then have to click the "comment without registration" link to unhide the form, but the comment is still there. I'm working on a way to include that information in the error page.

beate said:

OK, that's very expensive to. But I think it should be made ​​so that every man has a health insurance policy. To get help in an emergency. And so the supply is ensured. That's my opinion.


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This page contains a single entry by Michael Bates published on December 19, 2009 7:45 PM.

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