July 2, 2009
Proposed costs are always lower than actual costs

Posted at 5:31 pm, in: Health Care
Tags: Barack Obama, Chris Dodd, Larry Elder

The current price tag slapped  on any health care proposal is irrelevant:

Democrats on a key Senate Committee outlined a revised and far less costly health care plan Wednesday night that includes a government-run insurance option and an annual fee on employers who do not offer coverage to their workers.

The plan carries a 10-year price tag of slightly over $600 billion, and would lead toward an estimated 97 percent of all Americans having coverage, according to the Congressional Budget Office, Sens. Edward M. Kennedy and Chris Dodd said in a letter to other members of the Senate Health, Education, Labor and Pensions Committee. The AP obtained a copy.

By contrast, an earlier, incomplete proposal carried a price tag of roughly $1 trillion and would have left millions uninsured, CBO analysts said in mid-June.

As columnist Larry Elder pointed out today:

When government proposes a program, the ultimate price tag inevitably exceeds projections. In “Why Government Doesn’t Work,” libertarian Harry Browne wrote: “Most older people now find it harder to get adequate medical service. Naturally, the government points to the higher costs and shortages as proof that the elderly would be lost without Medicare – and that government should be even more deeply involved. When Medicare was set up in 1965, the politicians projected its cost in 1990 to be $3 billion – which is equivalent to $12 billion when adjusted for inflation to 1990 dollars. The actual cost in 1990 was $98 billion – eight times as much.”

And, this is why the price tag slapped on any proposed legislation is irrelevant: because it is arbitrary and unrealistic. It fails to take into consideration incentives and human nature. It bases the figures on current data, which is based on people acting in their current circumstances. It doesn’t consider that the person who may have stayed home and self medicated with CVS brand Nyquil now because they couldn’t afford a doctor’s visit will be running to the doctors when they start to feel a cold coming on once health care is “free.” This will inevitably lead to a run on doctors and health care, raising the demand and cost and, therefore, inevitably leading to the government having to cut or ration health care or let the costs balloon. It is my prediction they will do a little bit of both.

Look, we already know that Obama has decided that the elderly should quit wasting their time (and our medical resources) trying to prolong their lives with end-of-life care. In his own words during the health care Obamercial:

As some of you know, my grandmother recently passed away, which was a very painful thing for me. She’s somebody who helped raise me. But she’s somebody who contracted what was diagnosed as terminal cancer. There was unanimity about that. They expected that she’d have six to nine months to live. She fell and broke her hip. And then the question was does she get hip replacement surgery, even though she was fragile enough that they weren’t sure how long she would last, whether she could get through the surgery.

I think families all across America are going through decisions like that all the time. And you’re absolutely right that, if it’s my family member, it’s my wife, if it’s my children, if it’s my grandmother, I always want them to get the very best care.

But here’s the problem that we have in our current health care system, is that there is a whole bunch of care that’s being provided that every study, every bit of evidence that we have indicates may not be making us healthier.

America: we still have a choice now. Do you want some bureaucrat in Washington, DC deciding on when the tests and treatments become useless for your family members or do you want to keep that choice where it belongs? If you don’t make the choice to stand up to the politicians now, it won’t be long until you have no choices left.

Obamacare will cost way more than $1 trillion. This new proposal will cost way more than $600 billion. And, don’t be fooled. Even if these were accurate and reliable price tags, that’s still a lot of effing money. I know in the past eight months a trillion dollars has been pushed around so much for this bailout bill and that stimulus bill that the numbers might seem like no big deal, but they are a big deal. A trillion dollars is such a huge amount of money we can’t even grasp how huge it is.

The politicians won’t stop this charade until we demand they stop it. We must make it quite clear, on both sides, that this is unacceptable. Remember that whenever they give you the price tag, you should multiply it times infinity and that number will be closer to the real cost of whatever is being proposed.

(H/T: Memeorandum)