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

[The Painter]

It's cheaper in every country where it's free.

Well if it's "free", of course that's cheaper. Can you tell me what country has "free" health care? Or is this some kind of attempt at humor?

 

[Random]

Well if it's "free", of course that's cheaper. Can you tell me what country has "free" health care? Or is this some kind of attempt at humor?

I think that it was a response to that silly "wait till you see what health care costs when it's free" soundbite people who support the current US system throw up when they are trying to be clever.

When you look at what we pay in the US for healthcare and compare it to pretty much any other industrialized country with universal healthcare, you really can't justify the current system.

In 2007, USians paid a little over $7,000 per person for healthcare, including people who didn't get any. Canada, France, and Germany came in between $3-4k. Japan came in at $2,500. "Free" healthcare might not be free, but it seems to be a damn sight cheaper.

 

[BeAChooser]

But CATO is not “running the numbers”. CATO is distorting the numbers. They just added up everything that might conceivably be considered a “cost”, systematically ignored anything that might be either revenue or savings, and declared that the program will “cost” six trillion dollars.

Evidently you do didn't even bother to read the OP post before responding. Because that is not how they arrived at the 6 trillion dollar figure.

They arrived at the 6 trillion figure by adjusting for two gimmicks in the democrat/CBO *analysis*. One is that the true cost of the program over a ten year period must be the cost over a period where the program is fully up and running. It shouldn't include years when the program is just collecting taxes but not expending money at the full up and running levels. Second, they recognized that if the government passes a law mandating insurance even if employers and individuals don't want it ... at the risk of fine and prison if they don't supply/purchase insurance ... then the government has in effect added an indirect tax to those businesses/individuals and ultimately the populace at large. And that's true whether or not a government representative actually lays his/her dirty hands on the money in the transaction.

Clearly, CATO's analysis was not at all what you described. In fact, it could be argued that they have left out some important costs from their analysis that the CBO did ignore. It wouldn't surprise me at all to find out 10 years from now that the annual cost of Obamacare is even more than 6 times the value democrats and the CBO have claimed it will be. After all, just look back at history (http://blog.heritage.org/2009/08/04/health-care-reform-cost-estimates-what-is-the-track-record/ ). When democrats started Medicare back in 1967, they predicted the program would cost about $12 billion in 1990. In 1990, however, it actually cost $110 billion ... a factor of 10 greater. In 1987, Congress estimated that Medicaid’s DSH payments, which provides relief to hospitals that serve large numbers of Medicaid and uninsured patients, would cost less than $1 billion in 1992. In 1992 it actually cost $17 billion ... a factor of more than 17 greater. Time and again the government has underestimated the costs of programs. In fact, that's the norm.

 

[tyr_13]

Evidently you do didn't even bother to read the OP post before responding. Because that is not how they arrived at the 6 trillion dollar figure.

They arrived at the 6 trillion figure by adjusting for two gimmicks in the democrat/CBO *analysis*. One is that the true cost of the program over a ten year period must be the cost over a period where the program is fully up and running. It shouldn't include years when the program is just collecting taxes but not expending money at the full up and running levels.

Nope, didn't read the rest. I stopped at the fail right there. Why doesn't that money count? It's not really money?

 

[Meadmaker]

When democrats started Medicare back in 1967, they predicted the program would cost about $12 billion in 1990. In 1990, however, it actually cost $110 billion ... a factor of 10 greater

Of course, a factor of 6 out of that was underestimating inflation, so the actual cost increase, according to BAC's link, was 165%. I'm willing to bet that all of that could be accounted for by greater than expected growth in life expectancy. Curiously, the link didn't compare actual life span in 1990, versus the life span used in the 1967 estimate.

I like Medicare. I think we should keep it. I don't care that it costs more, depending on how you do the accounting, anyway, than was anticipated.

We need to provide health care for everyone. This plan moves in the right direction. If you have a better one, that moves even closer, I'm sure congressional Democrats would be willing to consider it.


As for cost estimates, I think they should be as accurate as possible. If they were, I don't know what that would be.

 

[BeAChooser]

Nope, didn't read the rest. I stopped at the fail right there. Why doesn't that money count? It's not really money?

Wow! So you not only didn't read the whole post, you didn't even understand the blatantly simple logic behind the only portion that you did read.

Ever hear the term "deficit neutral"? Obama and the democrats claim their health care proposal is deficit neutral. But the only way they can claim that is by taking in 10 years of taxes while paying out only 6 years of health benefits. And you think that's legitimate. And by claiming cost reduction that will never materialize in a million years. LOL! Barnum was right.

You really should read this:

http://startthinkingright.wordpress...ed-baucus-health-care-plan-as-defict-neutral/

 

[tyr_13]

Go on claiming that money doesn't count when it's collected as taxes during times you say don't count. It's funny.

 

[BeAChooser]

Of course, a factor of 6 out of that was underestimating inflation, so the actual cost increase, according to BAC's link, was 165%.

Fair enough. But even that's quite a serious underestimate ... especially if we are now dealing in trillions of dollars. And by the way, what's been the growth of Medicare versus inflation since 1990. Enough that Obama even admitted that Medicare threatens to BANKRUPT the country.

I'm willing to bet that all of that could be accounted for by greater than expected growth in life expectancy. Curiously, the link didn't compare actual life span in 1990, versus the life span used in the 1967 estimate.

http://www.forhealthfreedom.org/Publications/MedicareMedicaid/RxDrugPlan.html

Myth #2: Seniors' life expectancy has increased because of Medicare.
Fact: Supporters of Medicare often overlook the very important fact that average life expectancy had been increasing in the United States long before Medicare and Medicaid were enacted in 1965. In fact, average life expectancy in the United States increased from 47.3 years to 69.7 years between 1900 and 1960.4 It is important to note that life expectancy was low in the early 1900s primarily because of high infant mortality rates, making the overall life expectancy rate appear low. However, in the early 1900s, those who reached age 60 typically lived another ten years or more. The bottom line is that life expectancy for seniors had been increasing nearly every decade for 65 years (1900 to 1965) prior to the enactment of Medicare. Thus, we can't attribute the increases in seniors' life expectancy to Medicare.

 

[BeAChooser]

Go on claiming that money doesn't count when it's collected as taxes during times you say don't count. It's funny.

Like I said ... Barnum was right.

 

[Meadmaker]

http://www.forhealthfreedom.org/Publications/MedicareMedicaid/RxDrugPlan.html

Thus, we can't attribute the increases in seniors' life expectancy to Medicare.

You miss the point. (My gods have feet of clay.) I am not claiming that life expectancy has increased because of medicare. I am claiming that the cost of medicare has increased because of the increase in life expectancy. It isn't some sort of out of control government spending. We live longer, so we need more health care for a longer period of time, which costs more.

 

[jimbob]

Well if it's "free", of course that's cheaper. Can you tell me what country has "free" health care? Or is this some kind of attempt at humor?

Free at the point of use.

Check my sig for some figures.

 

[JoeTheJuggler]

They arrived at the 6 trillion figure by adjusting for two gimmicks in the democrat/CBO *analysis*. One is that the true cost of the program over a ten year period must be the cost over a period where the program is fully up and running. It shouldn't include years when the program is just collecting taxes but not expending money at the full up and running levels.

And this is absurd. You can't just ignore the first 4 years of the program to calculate the net cost.

Second, they recognized that if the government passes a law mandating insurance even if employers and individuals don't want it ... at the risk of fine and prison if they don't supply/purchase insurance ... then the government has in effect added an indirect tax to those businesses/individuals and ultimately the populace at large. And that's true whether or not a government representative actually lays his/her dirty hands on the money in the transaction.

And we've already addresses this.

Not only is treating premiums as a tax wrong, you're also counting government revenue and expenditures as one and the same thing*. In other words, if you count the premiums as taxes, they would not increase the cost to the federal government (this is what the CBO figure is that Cato is trying to modify), they would decrease it.

At any rate, if it costs a car manufacturer $3000 to build a car, and they sell it for $8000, the net result is a $5000 profit. The "cost" figure being cited is simply the total government expenditures the healthcare reform bill would require. When you total how much the bill would also bring in, the result is a net reduction in the federal deficit.

Clearly, CATO's analysis was not at all what you described.

No, I think "distortion" was a good word for what Cato did.

By the way, since you reject the CBO's figures, are you alleging some sort of conspiracy in the non-partisan CBO?

*ETA: If you want to be consistent and claim that all insurance premiums paid in are taxes (since it's mandatory under the reform bills), then you should count that as government revenue, and you should also count all health benefits paid out (even by private insurance companies) as government expenditure. Unless the insurance industry is operating at a loss, the net result of this will be an increase in government revenue, which would increase the amount of deficit reduction over and above what the CBO estimates.

 

[BeAChooser]

And this is absurd. You can't just ignore the first 4 years of the program to calculate the net cost.

What's absurd is acting like the 10 years after the first 10 will have the same accounting conditions. Do you think the next 10 year period will also start with four years of taxes but no benefits so that it appears deficit neutral? Of course not. So the CBO and democrat's accounting trick is giving a false impression as to the true cost of the program. Or do you expect this program to end after the first 10 year period, Joe?

Not only is treating premiums as a tax wrong

When the ONLY reason those premiums will be paid is because the government FORCES people to pay them ... else be fined and imprisoned ... they become a tax. The fact that the money will go directly to the insurance company from the insured, rather than through government hands (at least until the public option is all that's left ... and believe me that is the Obama administration and democrat's ultimate objective) is immaterial. Those premiums are still being MANDATED under threat of fine and incarceration by the government. That makes them a "tax".

 

[BeAChooser]

I am claiming that the cost of medicare has increased because of the increase in life expectancy.

Has the likely/expected increase in life expectancy been accounted for in the democrat's and governments evaluation of Obamacare?

Or is Obamacare premised on halting the increase in life expectancy so that it can be ignored ... much like it was in their Medicare program predictions?

 

[Dr Adequate]

Has the likely/expected increase in life expectancy been accounted for in the democrat's and governments evaluation of Obamacare?

Or is Obamacare premised on halting the increase in life expectancy so that it can be ignored ... much like it was in their Medicare program predictions?

You are BeAChooser. You post the posts that BeAChooser posts, because you are, in fact, BeAChooser. Or "BAC", as you are colloquially known.

 

[JoeTheJuggler]

What's absurd is acting like the 10 years after the first 10 will have the same accounting conditions. Do you think the next 10 year period will also start with four years of taxes but no benefits so that it appears deficit neutral? Of course not. So the CBO and democrat's accounting trick is giving a false impression as to the true cost of the program. Or do you expect this program to end after the first 10 year period, Joe?

The CBO's estimates for the second ten year period (yes, they provided those) were for an even greater deficit reduction. Obviously, economic forecasting is a lot like weather forecasting, and the further out you go the less accurate you tend to be, but you seem to think the CBO was trying to use a gimmick to give a misleading estimate, and they certainly were not.

There was no forecast for the 3rd ten year period, but that doesn't mean that I or anyone else expects the program to end within that period. How far into the future do you think it's worthwhile to make estimates?

There was no accounting trick.

ETA: Just as an example, the CBO did a separate cost estimate on the CLASS programs for both the House and Senate bills. (I think the Senate just voted today to keep this program in their version of the bill.) Here's the CBO report in a pdf file. There is a section beginning on page 4 titled Effects Beyond the First 10 Years.

When the ONLY reason those premiums will be paid is because the government FORCES people to pay them ... else be fined and imprisoned ... they become a tax. The fact that the money will go directly to the insurance company from the insured, rather than through government hands (at least until the public option is all that's left ... and believe me that is the Obama administration and democrat's ultimate objective) is immaterial. Those premiums are still being MANDATED under threat of fine and incarceration by the government. That makes them a "tax".

Except that it's not. You say it's immaterial that the money doesn't go to the government, but that really is largely what defines a tax.

ETA: And the government mandate is certainly not the only reason these premiums will be paid. The main reason is for health insurance. If what you say were true, then no one at all would buy insurance now when it's not mandatory.

At any rate, your accounting is still flawed, as I said above. If you count these mandatory premiums (i.e. all of them--including the ones being paid now by or on behalf of the 80-something percent of the population that is already insured) as a tax, then this amount of money would reduce not increase the net cost of the program. (As I said, you should then, to be fair, count the benefits paid out by insurers as government expenditures--even though they're not. Still, the net result is a reduction of the deficit.)

 

[JoeTheJuggler]

So the CBO and democrat's accounting trick is giving

Again, are you suggesting there is a conspiracy and that the CBO is now run by the Democratic Party?

 

[JoeTheJuggler]

For the record:

Here is the CBO report on the House bill.
The projection is for a net decrease in the deficit for all of the first 10 years except 2010, 2015 and 2016. Taking that 10 year period in two halves, for the 2010-2014 period the bill is estimated to result in a net $130 billion reduction, and for 2010-2019, $138 billion.

This revision (which covers the bill as it was passed by the House) did not make estimates for the 2nd ten years. (I know at least one other version did, though. I remember reading a projected net deficit reduction for the 2nd ten year period.)


And here is the CBO estimate of the effects of the Senate bill. I think I may have quotes this part (from the cover letter) already:

According to CBO and JCT’s assessment, enacting the Patient Protection and Affordable Care Act would result in a net reduction in federal budget deficits of $130 billion over the 2010–2019 period (see Table 1). In the subsequent decade, the collective effect of its provisions would probably be small reductions in federal budget deficits if all of the provisions continued to be fully implemented. Those estimates are subject to substantial uncertainty.

To me that's the bottom line figure, but the cover letter continues:

The estimate includes a projected net cost of $599 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $848 billion in subsidies provided through the exchanges, increased net outlays for Medicaid and the Children’s Health Insurance Program (CHIP), and tax credits for small employers; those costs are partly offset by $149 billion in revenues from the excise tax on high-premium insurance plans and $100 billion in net savings from other sources. Over the 2010–2019 period, the net cost of the coverage expansions would be more than offset by the combination of other spending changes that CBO estimates would save $491 billion and other provisions that JCT and CBO estimate would increase federal revenues by $238 billion.1

This $599 billion cost figure is the one, best I can tell, the Cato report is arguing against. I don't think it's all that meaningful anyway. I think the net effect on the budget is what matters most.

At any rate, if you're going to count premiums as taxes, they would reduce that figure, not increase it.

 

[Meadmaker]

Has the likely/expected increase in life expectancy been accounted for in the democrat's and governments evaluation of Obamacare?

Or is Obamacare premised on halting the increase in life expectancy so that it can be ignored ... much like it was in their Medicare program predictions?

I can't say I know, or particularly care. If there were two proposals on the table for extending health care to all citizens, I would compare the two, and cost would certainly matter. Sadly, not only are there not two, there isn't even one. However, the plans that are on the table are the best ones available.

I have concluded that the current health care system is not working well, and will only get worse. I have concluded that a plan based completely on private enterprise would be worse. That leaves the Democratic plans, so I'm for them.

Will it be costly? Yes, whether or not they are passed. I haven't seen any credible data to suggest that the source of cost in Obamacare is anything other than the actual cost of providing health care to people who are not currently getting it. If that's the case, then it ought to be paid.

My biggest worry is that he, like his predecessor, will not have the backbone to call for the taxes necessary to pay for his programs. I have a problem with that.

 

[Bob Klase]

Well, you could if Bush's 2000 campaign hadn't explicitly included "no nation building" and "reducing foreign deployment".

What Bush campaigned for is irrelevant. We were talking about "most of the people we elected". I don't think Bush qualifies as "most of the people we elected". At best he would qualify as only one of the people we elected.