Obama's Health Care Hubris

President Obama wants to remake the US health care delivery system in the nation, and his friends in Congress are ready to aid and abet him. Of course, the reality of what he intends to do means suspending disbelief over the costs, and how it will be paid for.

The numbers simply do not add up.

Democrats have suggested that they are willing to play hardball and pass a bill without Republican support. Arlen Specter, the senior Pennsylvania senator, became a Democrat, potentially adding one more vote. At the White House on Monday, lobbyists for doctors, insurers and other industry groups pledged to reduce the growth of medical spending.

Yet none of these developments has removed the main hurdle to health care reform: the matter of the missing $90 billion.

Providing health insurance to the roughly 50 million people without it will cost something like $120 billion a year. President Obama has proposed $60 billion or so in new revenue for this purpose — a “down payment,” his advisers say. But Congress seems set to reject about half of the down payment (a plan to limit high-income families’ tax deductions for charitable giving and other such things). That makes for the $90 billion health care hole.

And no one is quite sure how to fill it.

That $90 billion is a best case scenario, which is likely to grow as the costs add up. We saw the same thing with the prescription drug program that the Bush Administration pushed, which now costs billions more per year than previously anticipated. There are no cost savings, only more costs - and higher taxes around the corner.


There will be taxes. Lots of taxes.

It means that the expiration date on Obama's claim that most Americans wont see tax increases will have long passed (Obama's tax claims were voided the moment the federal government imposed a cigarette tax hike to partially fund S-CHIP, but I digress).

The sad part is that the media continues spinning for the Administration when it lazily reports that Limit on tax-free benefits may fund coverage. Limiting tax-free benefits on health care coverage is another way of saying that the moment you reach the capped level, you are going to get taxed. Reducing the cap means that you're going to tax that many more people and businesses, with those costs passed on to the end user.

This is a way to claim that you aren't raising taxes all while raising taxes for those who now face higher taxes as a result from their benefits no longer shielded from taxes.

It's a shell game where the money gets thrown around but remains unaccounted for.

Finance Committee Chairman Max Baucus, D-Mont., said Tuesday that there are no easy options. Senators began grappling with how to finance guaranteed coverage, a cornerstone of Obama's plan to overhaul the health care system. Independent experts put the costs at about $1.5 trillion over 10 years.

Obama sees a world in which doctors and hospitals compete to offer quality service at lower costs, and the savings help cover the uninsured. Turning that vision into reality remains the biggest challenge for the president and his backers, because hard cash — not just ideas — is required to cover upfront costs of expanding coverage.

The president put health care industry leaders on notice Tuesday that he expects them to fulfill their dramatic offer of $2 trillion in savings over 10 years. "I will hold you to your pledge to get this done," Obama said in a letter that went to groups representing insurers, hospitals, doctors and drug makers.

The cost savings will come from reducing the availability of care to Americans most in need of such care. It means making heart rendering decisions that will prevent needy individuals from getting care under insurance programs that previously covered that care.

UPDATE:
Don Surber points out the blindingly obvious problems with government health care. It doesn't work in the UK, and it wont work here either. The government bureaucrats wont do any better than private insurers, and in fact are showing themselves to do far worse - a death toll that increased in Scotland as more people died in government run hospitals from malnourishment than they did just a few years before.

The Scottish Government statistics also showed 1,884 people were diagnosed with malnutrition in Scottish hospitals in 2008, of whom 110 died –- one in 17. This is twice as bad as the situation in 1998 when a similar number -– 1,805 –- were diagnosed with malnutrition, but only 51 of these patients died from it –- one in 35.”