Will the real 10 year cost of ObamaCare be over $6 trillion?

[BeAChooser]

http://www.cato-at-liberty.org/2009/11/27/obamacares-cost-could-top-6-trillion/

ObamaCare’s Cost Could Top $6 Trillion

Congressional Democrats are using several budget gimmicks to disguise the cost of their health care overhaul, claiming the House and Senate bills would cost only (!) about $1 trillion over 10 years.

... snip ...

One gimmick makes the new entitlement spending appear smaller by not opening the spigot until late in the official 10-year budget window (2010–2019). Correcting for that gimmick in the Senate version, Sen. Judd Gregg (R-NH) estimates, “When all this new spending occurs” — i.e., from 2014 through 2023 — “this bill will cost $2.5 trillion over that ten-year period.”

Another gimmick pushes much of the legislation’s costs off the federal budget and onto the private sector by requiring individuals and employers to purchase health insurance. When the bills force somebody to pay $10,000 to the government, the Congressional Budget Office treats that as a tax. When the government then hands that $10,000 to private insurers, the CBO counts that as government spending. But when the bills achieve the exact same outcome by forcing somebody to pay $10,000 directly to a private insurance company, it appears nowhere in the official CBO cost estimates — neither as federal revenues nor federal spending. That’s a sharp departure from how the CBO treated similar mandates in the Clinton health plan. And it hides maybe 60 percent of the legislation’s total costs. When I correct for that gimmick, it brings total costs to roughly $2.5 trillion (i.e., $1 trillion/0.4).

... snip ...

When we correct for both gimmicks, counting both on- and off-budget costs over the first 10 years of implementation, the total cost of ObamaCare reaches — I’m so sorry about this — $6.25 trillion.

Would a $5 trillion dollar difference in the real cost versus what we are being told will be the cost constitute a mistake or a lie on part of those claiming the cost will be $1 trillion over 10 years? I say the latter.

 

[Upchurch]

What would a reasonable amount be to spend on American lives?



Aside: For a little perspective, we're topping half a trillion in military spending annually and rising.

 

[JoeTheJuggler]

Even so, the net result of the bill will be to take in more than it pays out, right? That's what the CBO says. It will result in a net deficit reduction, so this "cost" issue isn't really a net cost, no matter how you delimit government vs. private revenue and spending.

Another gimmick pushes much of the legislation’s costs off the federal budget and onto the private sector by requiring individuals and employers to purchase health insurance.

How is this a "gimmick"? Everything I read about it, says that's what this is all about--health insurance. That works by paying in premiums and paying out benefits. Benefits paid out by a private company from funds they collected in premiums isn't really government spending, is it? In many states, auto insurance is mandatory for all drivers, but that money isn't counted as state government revenue and spending is it?

 

[JoeTheJuggler]

Aside: For a little perspective, we're topping half a trillion in military spending annually and rising.

And the difference is that THAT's a net loss to government coffers. In fact, military spending is largely responsible for our huge deficits. The net result of either of the two healthcare plans (the one passed in the House and the one currently being debated in the Senate) will result in a net decrease of the deficit. So this "cost" isn't a net cost.

 

[Meadmaker]

Right now, I pay for health insurance. Under Obamacare, I will pay for health insurance.

Will my health insurance premiums become government spending after the law passes?



Right now, there are people in the United States who do not get health care because they have not been able or have not chosen to purchase health insurance. That has to change. Any suggestions for doing so would be welcome, but only Obama and the Democrats are putting forward those suggestions.

 

[INRM]

Upchurch,

I don't think we should be spending half a trillion on military spending. We spend more money on our military than the entire budgets of entire nations.

With that said I don't think it's a good idea to spend 6 trillion dollars on a health-care program. Where is that money going to come from? Our taxes? Or are we going to pay it by giving more treasury bills to China?

If that's from our taxes that's 20,000 dollars a person. That's a size-able amount of cash! If we end up giving more treasury bills to China we end up in just a worse condition than we already are. Already they could do serious damage to us as is.


INRM

 

[Upchurch]

I don't think we should be spending half a trillion on military spending. We spend more money on our military than the entire budgets of entire nations.

With that said I don't think it's a good idea to spend 6 trillion dollars on a health-care program.

Fair enough. What is an acceptable amount to spend on a health-care program?

 

[drkitten]

http://www.cato-at-liberty.org/2009/11/27/obamacares-cost-could-top-6-trillion/



Would a $5 trillion dollar difference in the real cost versus what we are being told will be the cost constitute a mistake or a lie on part of those claiming the cost will be $1 trillion over 10 years?

Neither. It's a lie on the part of the Cato Institute.

 

[INRM]

Upchurch,

What is an acceptable amount to spend on a health-care program?

That's actually a very good question. I honestly don't know. Asking every American to pay 20,000 bucks out of their income sounds excessive though

 

[drkitten]

That's actually a very good question. I honestly don't know. Asking every American to pay 20,000 bucks out of their income sounds excessive though

Why?

$20,000 over a ten year period is $2000/year. Per capita health care costs in the States are about $6000 and change per year. If we can cut those in half -- so people pay only $3000 out of pocket -- we will have effectively saved them $1000 a year.

Surely whether or not the costs are excessive depends on what we get for our money.

 

[BeAChooser]

With that said I don't think it's a good idea to spend 6 trillion dollars on a health-care program. Where is that money going to come from? Our taxes? Or are we going to pay it by giving more treasury bills to China?

And keep in mind, that 6 trillion in health care costs will be on top of the additional 6-7 trillion dollars that Obama's other policies will add to the national debt over the next 10 years ... over and above what the deficit would have increased under Bush policies.

If that's from our taxes that's 20,000 dollars a person.

Obama and democrats are counting on the fact that almost half the people don't pay any federal income taxes and 5% of them pay over 60% of federal taxes (http://www.zerohedge.com/article/5-...l-tax-revenue-47-will-pay-no-federal-tax-2009 ). It's beggars and choosers with the beggars now in control of our destiny.

 

[Upchurch]

And keep in mind, that 6 trillion in health care costs will be ...

BAC, what would a reasonable amount be to spend on American lives?

 

[BeAChooser]

It's a lie on the part of the Cato Institute.

And what part of Cato's reasoning is a lie?

As far as I can tell, they are absolutely correct in stating that the democrat proposal is to collect new taxes for the program for four years before most of the outlays under the program even begin. That does indeed distort what the program will actually cost to provide 10 years of health coverage.

And I also believe they are correct in stating that the CBO is treating the mandatory purchase of coverage differently than the tax that would be needed to achieve the same outcome. If you wish to challenge that or the other assertion, perhaps you should cite your source. You do have sources, don't you?

 

[BeAChooser]

BAC, what would a reasonable amount be to spend on American lives?

Please stick to the OP topic.

 

[BeAChooser]

Quote:
What is an acceptable amount to spend on a health-care program?

That's actually a very good question.

I would ask everyone to stick to the topic identified in the first post of this thread. The topic is not what is an acceptable amount to spend on a health care program. It is whether the Obama administration and democrats have been dishonest in claiming the cost of their health care program will be $1 trillion rather than what appears to be the real cost ... $6 trillion, over a 10 year period.

 

[Upchurch]

Please stick to the OP topic.

I am. You are suggesting that the real cost of health care reform is too expensive, are you not? What would be reasonable?

For that matter, what do you make of drkitten's numbers that health care reform will actually make health care less expensive than it currently is?

 

[Upchurch]

Would a $5 trillion dollar difference in the real cost versus what we are being told will be the cost constitute a mistake or a lie on part of those claiming the cost will be $1 trillion over 10 years? I say the latter.

There is, of course, a third option; the OP article has a political axe to grind and is cherry picking numbers to paint health care reform is the most unfavorable and misleading light possible. Its use of the term "ObamaCare" is a big red flag.

I realize I'm feeding the troll but, BAC, do you have any credible and objective sources to support your claim?

 

[JoeTheJuggler]

Again, this talk of these reform bills "costing" anything is misleading.

The CBO says that both plans will result in a net deficit reduction.

And of course counting benefits paid out by insurance companies from money received as premiums as "government spending" is silly.

 

[JoeTheJuggler]

And what part of Cato's reasoning is a lie?

That premiums paid to insurance companies or benefits paid by insurance companies is somehow a type of government spending.

 

[Eyeron]

Being thrifty is of no value in politics. If you have the experience you must spend it or you don't get the votes from your constituents. IMO.