Health care debate gets dose of reality
Originally Posted At AL.com
June 19, 2009
SINCE THE creation of Medicare more than 40 years ago, members of Congress have talked continually about how they're going to control health care costs and "pay for" new benefits.
So it's no surprise that, once again, a huge new federal health care entitlement is being promoted as a cost-effective program that will control inflation and thus almost pay for itself.
This time, however, Congress' own budget analysts are injecting the health care debate with a dose of fiscal reality. According to the Congressional Budget Office, a highly centralized health care plan sponsored by Sen. Ted Kennedy, D-Mass., would cost more than $1 trillion over the next decade and fall woefully short of one of President Obama's key goals — providing coverage for around 46 million uninsured Americans.
The CBO also said a draft proposal generated by the Senate Finance Committee would cost a staggering $1.5 trillion.
CBO analysts deserve credit for presenting an honest evaluation of the costs and benefits of the major health care reform bills in Congress. But if history is any guide, they almost certainly underestimated the cost of the Democrats' plans.
Rep. Paul Ryan, a Republican from Wisconsin, correctly observed that "history shows the pay-fors evaporate, but the expenditures continue."
The political reality is that members of Congress love offering new benefits to their constituents, but they hate imposing the necessary "pay-fors" on people who believe the benefits are free.
Consider the Medicare program for retirees and the disabled. Writing for National Review online, Lawrence Hunter, a former staff director of the congressional Joint Economic Committee, pointed out that initial congressional cost estimates pegged the 1990 price tag for Medicare at $12 billion. But by 1990, the program's annual cost had soared above $100 billion.
In the late 1980s, Congress tried to put the brakes on Medicare costs by requiring doctors and hospitals to follow complicated fee schedules. The federal interference angered many in the health care field, but it didn't have much of an impact on costs. In 2008, Medicare's total costs topped $450 billion.
Based on the history of Medicare and Medicaid, we feel quite confident in saying the proposed federal health plans would cost more than projected, would require heavy tax increases to finance their benefits and nevertheless would, within a few years, join Medicare and Social Security on the road to bankruptcy.
As the health care debate unfolds, we will find out whether Congress has learned from past mistakes and determined that it will not repeat them.
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