The Democrats believe that if you say something long enough, people will begin to believe it.
But calling something affordable doesn’t make it so.
The total cost of the healthcare reform bill Senate Majority Leader Harry Reid (D-Nev.) presented to the Senate is estimated to be $848 billion. It is said to extend insurance coverage to 31 million Americans (maybe, in a few years). That would be about $27,000 per additional insured person.
Making somebody else pay the bill also does not make it affordable. A massive redistribution scheme adds costs and makes the total cost less affordable. A Congressional Budget Office score less than Obama’s target of $900 billion isn’t affordable, either.
The Association of American Physicians and Surgeons, in a recent release, notes that individual costs will go up under the “affordable” plan.
• The increase in insurance premiums could reach $4,000 per year for someone earning less than $90,000 per year, and it easily could reach $8,000 as soon as pay tops $100,000.
• The average premium for a family plan could reach $25,900 by 2019, substantially higher than if Congress did nothing. WellPoint Inc., a health insurance company, made an even more dire prediction that premiums would triple.
• The penalty proposed in one bill for not buying an approved plan is $750 per year for individuals earning $32,500. “It’s like penalizing the homeless for not buying a mansion,” the Wall Street Journal wrote in September. In that bill, penalties for higher-income families would be $3,800.
• There are 13 major new taxes or fees in the Senate bill, including taxes on more expensive health plans, nonqualified distributions from health savings accounts, branded drugs, companies that offer private insurance and medical devices such as pacemakers, according to the Joint Council on Taxation.
• About 90% of the new tax increases would hit people earning less than $200,000 per year, and 50% would fall on those earning less than $100,000.
• The payroll tax for Medicare Part A would be increased from 2.9% to 3.4% on wages exceeding $200,000 for an individual. There is 5.4% surcharge on incomes larger than $500,000.
• “Bracket creep,” despised in the 1970s, would cause an already huge $500 billion tax increase to balloon to $1.7 trillion in the second decade. The negative effects of failing to index will compound over the years, creating a revenue windfall for government.
• The young would be forced to subsidize the old beyond the Medicare tax. Under the House bill, the premiums for older Americans could be twice as high as for the young. This, even though spending for 60–64-year-olds is four to five times higher than that of 18–24-year-olds.
• When demand increases, prices increase. The simple increase in aggregate demand—newly insured persons typically doubling their spending—would increase the price of the typical family plan by 10%, or $1,200 per year, according to a Wall Street Journal article in September.
Since Medicare and Medicaid funding began in 1967, total state and federal government spending has increased by 1,791%. This is a real annual growth rate of 44%—10 times the annual economic growth rate.
In making its projections for the first decade, the Congressional Budget Office used accounting sleight of hand. It starts the decade in 2010, although only 1% of the 10-year costs hit before 2014. If the decade starts in 2014, the 10-year costs are $1.8 trillion, according to the Pacific Research Institute.
More and more investors are betting that “rich” countries will default on their bonds, according to a November article in the Financial Times.
“Healthcare reform” could be the tipping point.
As George Jonas of Canada pointed out in the National Post in September, “If the problem with private medicine was that not everybody could afford it, the problem with socialized medicine turned out to be that nobody could afford it.”
Glueck is a medical doctor in Newport Beach who often writes on legal issues in medicine.
