Wednesday, November 18, 2009

Just in from the Accounting Department on Fantasy Island ...

The gubmint is totally lying to us about what health care will cost:
Which accounts for another important finding: the bill is not going to control national health care expenditures. In fact, it's going to slightly increase them. Under current law, the CMS has a projection of 20.8% of GDP going to health care in 2019. The new bill will bring that up to 21.1%. That's not particularly surprising, since they think the bill will cover 34 million new people. Unless those new people weren't planning on actually consuming any health care--in which case, why are we bothering?--spending was bound to go up.
Let's see now: add another 15% to the list of folks who will receive health care, but assume that costs will only go up 1%. Yup, that sounds about right. And for this additional 1% coverage (in services delivered), Speaker Pelosi will throw her party under the bus of the 2010 elections? But wait, there's more!
When you increase the demand for something without increasing the supply, you either get price increases, or shortages. Neither is what the authors are promising for their bills.


Controlling costs means consuming less health care. There is no magic pot of money waiting to be painlessly seized from some undeserving wretch, preferably one that voters already hate. The only way we are going to cut costs is by cutting someone's benefits.

Perhaps we'd be better off, in some metaphysical sense, if we did. But no one wants to. That's why politicians are speaking euphemistically about Medicare Advantage "overpayments" and frantically promising that no way, no how, will they damage anyone's Medicare benefits. The CMS report says what Doug Elmendorf, the head of the CBO, hinted at in his letters to Congress: cost control will be painful, and Congress will almost certainly undo it.
Maybe the American Public didn't just fall off the turnip truck from Chattanooga. Perhaps there's a reason that people don't trust the government. Crazy idea, I know, but maybe they think the gubmint isn't being straight with them or something. Like about the cost of new social programs?

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