When betting on health care reform cost, take the over
As the Senate prepares to begin debate on the bill to overhaul health care in this country, The Associated Press dutifully and accurately reports the Congressional Budget Office estimate that the price tag of this endeavor is "$848 billion over 10 years to gradually expand coverage to most of those now uninsured." The CBO has even said both the House and Senate versions will reduce the deficit.
But others say it is all in how you look at the numbers and when. One of the simpler explanations for why this number might be flawed can be found at The Weekly Standard, which posts a Republican-created chart arguing that the real 10-year window for health care cost doesn't start until 2014 when spending kicks in.
"But it gets even worse," the Weekly Standard says. "The CBO doesn't say that the bill's total costs from 2010 to 2019 (99 percent of which would come from 2014-onward) would be $848 billion -- or that its total costs in its real first 10 years (2014 to 2023) would be $1.8 trillion. Rather, it says that these would be the gross costs of the bill's 'expansions in insurance coverage.' The CBO shows that there are many other costs in the bill as well, including spending related to the CLASS Act, risk-adjustment payments, funding for the government-run 'public option' (not a cent of which is included in the figure for 'expansions in insurance coverage'), and other new federal spending.
"The Senate Republicans' chart demonstrates that the total for all of these costs -- based on CBO projections for the bill's true first 10 years -- is $2.5 trillion. And costs would only skyrocket from there, as the chart's trajectory suggests. In the 5 years to follow (2024-28), spending on 'expansions in insurance coverage' alone would be $1.7 trillion, making the bill's total costs in its real first 15 years well over $4 trillion -- based on CBO projections."
Cato Institute also looked at the numbers, and Michael Cannon writes under the headline, "Reid Health Bill Perpetuates the $1.5 Trillion Fraud," "But the biggest hidden cost is that of the private-sector mandates. In both the Clinton health plan and the Massachusetts health plan, the private-sector mandates –- the legal requirements that individuals and employers purchase health insurance –- accounted for 60 percent of total costs. That suggests that if the (Sen. Harry) Reid bill’s cost to federal and state governments is $1 trillion, then the total cost is probably $2.5 trillion, and Harry Reid — like House Speaker Nancy Pelosi — is hiding $1.5 trillion of the cost of his bill."
Writing in The Wall Street Journal, Douglas Holtz-Easkin, the former director of the CBO,says, "Finally, the bills are fiscally dishonest, using every budget gimmick and trick in the book: Leave out inconvenient spending, back-load spending to disguise the true scale, front-load tax revenues, let inflation push up tax revenues, promise spending cuts to doctors and hospitals that have no record of materializing, and so on."
Even the CBO admits it is having to make some huge assumptions to come up with any number at all. In other words, no one really knows for sure. If I were a gambling man, I'd take the over.
