Opinion: Why health care costs will be significantly higher than congress is projecting

The current House version of the “Healthcare Reform Bill” (H.R. 3962) is projected to cost about $900 billion which is the spending limit President Obama said he would place on the bill. President Obama also said the bill would have to be “revenue neutral” which translated means you can spend up to $900 billion but you cannot (directly) add to the deficit.

The house bill claims to meet these two requirements. It spends $900 billion (or more) and it is revenue neutral if you believe in fairy tales. Following are some reasons why:

1. Taxes paid in advance will be put into the same “lock box” used for Social Security

To get to revenue neutral, the bill provides for taxes to be collected immediately (about $600 billion over 10 years) but doesn’t start healthcare services until 2013. That’s one way to get the costs down to $900 billion: charge for the service for years in advance so you get 10 years of taxes but only have to deliver six or seven years of service.

But we’ve had enough experience with Congress to know that they will simply spend all the money they collect and then in 2013 make payments out of the general fund --.just like they did with Social Security.

2. The $400 billion dollar cuts to Medicare and Medicaid are vary unlikely to happen

They have not been able to cut 10 cents out of these entitlement programs since they were enacted in 1964. Now they are suddenly going to throw seniors under the bus. I don’t think so. Here are a couple of examples why:

Social Security recipients are not going to get an increase in their social security payments in 2010 because there is no inflation. And they are scheduled to get an increase of about $8 in their Medicare insurance payment. Unable to withstand the pressure for even an $8 cut in benefits, Congress is looking at a new program to pay each recipient $250 as part of a “stimulus” package.

Or, how about the $250 billion reduction in payments to doctors (part of the $400 billion overall Medicare reduction) to help pay for the health care program (and keep the total costs under $1 trillion.) But, they then introduced a separate bill to pay doctors $250 billion to replace the $250 billion they would lose in the Healthcare bill. Since this bill is not part of the healthcare bill, the costs don’t count. The bill was voted down but you know what their intent is and they will find a way to pass it or disguise it sooner or later.

3. Waste, fraud and abuse will be eliminated or severely reduced

There is no line item in the budget for waste, fraud and abuse. Therefore, politicians on both sides of the isle have been unable to find these unnecessary costs for the past 45 years. Now they expect us to believe they are going to find them next year.

It’s time for us to wake up and realize this is not a health care reform bill. It is a big government, big spending bill. We already have the best health care in the world and yes the most expensive because we like to eat cheeseburgers, get hip and knee replacements to make our lives better, and get the best and latest cancer treatment, etc.

If politicians were serious about reform, they would attack the real reasons healthcare cost are rising so quickly that many people can’t afford health care insurance like the aging population which is about half of the future rise in costs and federal and state government regulations that prevent us from having a consumer driven healthcare system.

If you would like to get more information on fiscal and monetary policy, you can go the non-partisan, web site of the Concord Coalition www.concordcoalition.org