We cannot afford The Public Option

We don’t believe salesman when they tell us something is free.  We know better.  But yet, many believe the government can provide services for free.  Since about half of Americans do not pay Federal Income Tax, I can see how they might not realize that Government spends taxpayer dollars.  But they do.  And they are spending not only our dollars, but the dollars of future generations.   We are not being told the truth about the costs of this bill, and when you look at the current economic situation in the US, it is obvious the proposed healthcare legislation will bankrupt the United States.

 

We are not being told the truth:

This bill is claimed by politicians (and echoed by the media) to be deficit neutral.  That means that it doesn’t cost us anything over a 10 year period.  That should sound illogical to you.  The idea is that by including 30 million more people in preventative healthcare they can “bend the curve” of costs to make up for providing healthcare those on the public option.    The non partisan Congressional Budget Office blows the lid off of the “deficit neutral” lie and pegs the cost at $1.2 Trillion over 10 years.  What’s another Trillion over 10 years right?  But the $1 Trillion is a cooked up number that is intentionally deceptively.

 

First consider that the new taxes will start being collected immediately.   We pay in for 4 years before services start getting delivered.  The delay in starting the services pushes the full costs of the program out past the 10 year forecast point.  If you look at the curve of the spending, you can see that a longer forecast is needed to understand the true cost. Your government is lying to you to steal your children’s future.   Source

 

UNDERESTIMATED COSTS

Also consider the governments estimates when they are trying to be honest.  Government has a perfect track record of underestimating the cost of programs.  Actual Medicare and Social Security are a multiple of what the government originally predicted.     The more recent Medicare Part D prescription Benefit enacted by the Bush-era government is  within budget, but the costs are still expected to rise; “According to USA Today, Medicare drug costs are expected to rise by 2011 "as early savings fade" and the first of 79 million baby boomers start the program (Cauchon, USA Today, 10/31”)

 

 

ADDITIONAL COSTS:
There is other legislation outside of this bill that is not being scored in the costs.  The so-called “Doctors Fix” is an additional $247 Billion plan to reduce Medicare physician payments.  Another Quarter of a Trillion right now that is not counted in the costs of the program.  You can’t advertise the price of a car only to be found out you have to buy the engine separately.  (There are laws against it.  That’s why car commercials have all the legal disclaimers.)  Plus, part of the stimulus went into the Health Care Reserve fund so we have already gotten stolen from a little bit to offset these costs.  The accounting that Congress is doing with the costs of the healthcare reform is also criminal.

 

 

But some things are plain to see:

 

Not everything is hidden.  Some stuff is right in the bill for all to see.  You didn’t think they were going to pay for all this  by “bending the curve” did you?  Nope.  Even if they bend the curve, which they won’t, the bill includes many new taxes on you and your employer, and cuts to the existing Medicare program.

 

 Increased Taxes:  The proposed healthcare plan includes billions in new taxes, including:

·        Tax on high-end health insurance plans: $149.1 billion

·        Capping flexible spending accounts at $2,500: $14.6 billion

·        Fees for drug makers: $22.2 billion

·        Fees for medical device makers: $19.3 billion

·        Fees for health insurance companies: $60.4 billion

·        Higher floor for deducting medical expenses: $15.2 billion

·        Higher payroll tax for top earners: $53.8 billion

·        Tax on cosmetic surgery: $5.8 billion  from WSJ

Medicare Cuts: 

Seniors pay attention.  This bill cuts Medicare spending.  It cuts payments to doctors and it will cut costs by rationing services.   I’ll let the LA Times explain it:

A plan to slash more than $500 billion from future Medicare spending -- one of the biggest sources of funding for President Obama's proposed overhaul of the nation's healthcare system -- would sharply reduce benefits for some senior citizens and could jeopardize access to care for millions of others, according to a government evaluation released Saturday. From LAT 

 

Bought of Legislators:

Senator Mary Landrieu is getting $100M to vote for this bill.   ABC reported yesterday that the bill contains pages of special legislation  giving Louisiana increased federal Medicaid subsidies.  This is the ugliness of pork right in your face.  P 432 of the Senate bill.   Landrieu was on the fence until this got added.  Now she’s sure it is good for the country.  These people are acting with self interest and have no concern for the sustainability of anything other than their own careers.    

 

We don’t have the money for this. 

The government cannot afford its existing commitments.  Medicare and Social Security go bankrupt in the near future.  Does it make sense to double down and go all in to cover 30 million more people (Americans?).  Our national debt has doubled from $5.98 Trillion in 2002 to over $12 Trillion right now.  In seven years we added $6 Trillion in debt.    That is nothing compared to what is about to come.  Here is a quote from the non-partisan CBO: 

 

Enactment of stimulus legislation and omnibus appropri­ations, a worsening of the economic outlook, and other factors have increased CBO’s projections of the deficit by more than $400 billion in both 2009 and 2010 and by smaller amounts thereafter. As a result, if current policies remain the same, CBO now anticipates that the deficit will total almost $1.7 trillion (11.9 percent of gross domestic product, or GDP) this year and $1.1 trillion (7.9 percent of GDP) next year, the largest deficits as a share of GDP since 1945.

You remember 1945 don’t you.  When we liberated Europe and the Pacific.  Do we have the same character of country to recover from our debt now? 

 

The numbers get even worse when you look past next year.   This should absolutely shock the world:  This is from the same CBO

 

From 2010 to 2019, the cumulative deficit under the President’s proposals would total $9.3 trillion, more than double the cumulative deficit projected under the current-law assumptions embodied in CBO’s baseline… The resulting higher deficits would require additional federal borrowing; net interest paid on that borrowing would add $1.0 trillion over the 10-year period relative to the baseline. Debt held by the public would rise, from 41 percent of GDP in 2008 to 57 percent in 2009 and to 82 percent of GDP by 2019.

 

Folks, when you owe a whole years worth of salary to your credit card company, you might not be able to recover.   You certainly would be smart to go out and make a permanent commitment to a purchase something.  Especially when you cannot even be honest with the costs of that thing you want to buy.

 

You will wind up on the public option.

Some might think that the public option will not apply to them.  The politicians and the media tell you that if you like your current plan then you can keep it.  The truth is that if you modify your coverage then you can be forced to the public option.  And your employer will have an incentive to pay a 8% penalty on your wages instead of paying your health insurance.  Smart employers will cut health care benefits, pay the penalty, and you take health care from the government.    The public-option is not a noble ambition.  It is a Trojan horse designed to lead to a single payer healthcare system.  Government insurance will become the de facto standard.  Have you ever been to a government office and been pleased with the service?  Do government programs generally operate efficiently?  These are rhetorical questions because we all know the answer.

 

Why are they doing this?

The proposed Healthcare bill is pure politics.  A big driving factor is that the Unions that influence the White House.  Andy Stern of SEIU is the most frequent visitor at the White House and Obama is on record saying that he listens to SEIU.  The Unions need public health insurance because they have unfunded commitments to pensioners.  The Unions want to deflect the cost of providing healthcare to the public because they have overcommitted and skimmed too much for too long.    There is also the effect of buying the votes of 30 million people.  In theory, people who pay no taxes and who now received subsidized or free healthcare will rewards the politicians with a permanent allegiance.    Lawyers also stand to benefit from the new legislation which will allow suits against insurance companies if they deny coverage.  The House bill will limit certain funds to states if the state has enacted punitive damage limits.  So rather than tort reform, there will be new causes of action created and penalties against state reforms.  76% of Americans are satisfied with their healthcare right now.  But yet this nonsense is about to happen.  It is politics and special interests.

 

We have to do something though right?

Healthcare costs are rising faster than incomes and it is sometimes hard to find affordable health insurance.  But there are free-market reforms that can be enacted to turn things around.  Health-savings accounts with high deductible insurance policies, tort reform,  regulation protecting those with pre-existing conditions, regulation allowing interstate competition, changes in tax codes to encourage individual health insurance policies.  I think the third-party payer system encourages waste.  If someone else is paying the bill , you are never as cautious with the money.  Congress knows this.  You know this.  I am in favor of a direct pay system where private individual pay for services as needed.  You get insurance to pay for catastrophic sickness and injuries.  You pay cash for routine office visit stuff.  Cash prices could be negotiated and competitive (currently prohibited by insurance contracts).  Consider the auto insurance analogy:  you have auto insurance for when you get in a wreck.  You don’t use auto-insurance when you need an oil change, a tune-up, or new tires.  Yet we expect our medical insurance to cover routine checkups and minor treatments.  We need to think differently about this to control costs.  We need to ration our own care before the government has to step in and do it for us.

 

Anyhow, I am off the subject a bit.  We can talk about alternative  solutions soon.  This article was mainly to convince that the money simply isn’t there to do this.  The costs are being hidden and congress is deceiving the public.  Tomorrow is a critical vote in the Senate.  By tomorrow night we will know whether the Public-option survives and whether we jumped off the financial cliff into oblivion.  China, our other largest debt holders must be watching with baited breath.  I know I am.