Thursday, December 03, 2009

Call it Macaroni? Er, No, It's Still a Feather.

The Congressional Budget Office issued a report November 30 prepared in conjunction with the Joint Committee on Taxation. Among other things, the report states (bottom of page 4):

"CBO and JCT estimate that the average premium per person covered (including dependents) for new nongroup policies would be about 10 percent to 13 percent higher in 2016 than the average premium for nongroup coverage in that same year under current law."

Got it. That outcome is financially WORSE than doing nothing.

And who are the people who buy “nongroup policies”? They’re individuals. A great many of these individuals are uninsured. The uninsured are the very people who need the most help. But the Senate Bill will increase the premiums that the uninsured would have to pay to get medical insurance they already can't afford. Does this make sense?

I think even more important, the effect of the Senate Bill on medical insurance premiums tells us that the cost of medical care would also be greater under the proposed law, than under current law. That’s because the cost of insurance is driven by the cost of medical care. In other words, the Senate bill does bend the cost curve. It bends the curve UPWARD.

The November 30 report
goes on to say (still on page 4):

"About half of those enrollees would receive government subsidies that would reduce their costs well below the premiums that would be charged for such policies under current law."

The administration and Senate leadership selected this comment for their great “AHA!” on Monday – AHA!! CBO proves us right! The premium per participant will reduce under the Senate Bill!! [they said]

Sure - - after the subsidy.

So you tell me. Will it cost taxpayers more to subsidize the more-expensive medical care caused by bending the curve upward ? Or will it cost taxpayers more to subsidize the less-expensive medical care we have now? C’mon, it’s an easy question.

I’m not saying we should be satisfied with what we’ve got. What we’ve got is far too expensive and it’s far too inefficient. The current “system” not only drives people nuts, it drives doctors nuts and payers such as the government, small employers, and large employers nuts, too. We need to change it. But the Senate Bill will give us no better than we have now, at higher cost.

The Senate leadership wants to stick a feather in its cap, and call it macaroni. But CBO says not so fast. Thanks to CBO, the information before the public is now clear and settled fact. It is wrong to assert that the Senate Bill will save money, or will be “budget neutral”. It will instead cost much more than doing nothing, and will not accomplish the very things we understand are most important.

By the way, remember when candidate Obama promised a health care plan that would save every American family $2,500 a year? I’d like to know, where the heck is THAT plan?
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