18 October 2009
Government Health Care Insurance Cost Fraud
The Democrats and Max Baucus have pulled the wool over the American people's eyes big time. Headlines everywhere said the CBO scored the "conceptual plan" of the Baucus Senate Finance Committee "bill" as costing $829 billion and yielding a reduction in the federal deficit of $81 billion. In these fraudulent numbers they counted only a part of the costs known to be in the "conceptual bill", pretended cost savings for Medicare and Medicaid would occur, which will not occur, and counted tax revenues for 10 years, but cost outlays for only 7 years. They also ignored the costs being dumped on the American people and the states entirely.
Ex-CBO director Donald Marron believes the Baucus "bill's" uncounted health care new federal spending costs bring the total federal government costs to $904 billion. New mandates on state spending put $33 billion of additional costs on state governments. Worst of all, the PriceWaterhouseCoopers study projects the insurance costs we private individuals are going to have to pay will go up by an additional $4000 per family by 2019 and single person coverage will be up by an additional $1500 by then compared to the situation without this bill. The Massachusetts Taxpayers Foundation has provided a rule of thumb from the Massachusetts health insurance mandate experience: the private sector will pay for 60% of the total costs, while the government books will carry only 40% of the cost, to be passed on to the taxpayer. So, the private sector will pay 1.5 times as much as the public sector. Thus, the real cost of the Baucus plan, the lowest cost plan of the many in Congress, is (1.5) ($829 + 33) + $904 = $2,197 billion or $2.197 trillion.
Since 2003 Congress is supposed to have made cuts in Medicare payments to physicians according to law, but every year Congress has refused to allow the cuts, probably because they are very aware that physicians are already underpaid under Medicare. Such payment reductions are counted on to save $234 billion in the next 10 years according to the Baucus "conceptual plan" and they are very unlikely to happen. Removing these "savings" leaves one with a government spending increase of $153 billion. The projected tax increase revenue is also going down from the earlier projections, because Congress is reducing the tax penalty for people who do not have qualified mandated health insurance plans. Major individual penalties are apparently unpopular!
There are still other reasons that the government costs of this plan are likely to be badly underestimated. For one thing, taxpayers are supposed to subsidize the costs of those making less than 400% of the poverty level income. This means 91.5 million people under the age of 65 are eligible for such subsidies. The CBO estimated that only 29 million of these 91.5 million will become subsidized health insurance plan holders. The actual number may prove to be much higher, by some estimates, 45 million is a more likely number.
The PriceWaterhouseCoopers study of the costs due to the Baucus "conceptual plan" believes that it will cause health insurance costs to go up an additional 18%. But, be aware that the costs are very dependent upon which part of the insurance market someone is in. Those who work for a large employer will see their costs go up by an additional 11%. Self-insured employers costs will go up by only 9%. These are the lucky ones. If you work for a small employer with fewer than 50 employees, the health insurance costs will go up by 28%! On the other hand, those poor souls in the individual market (non-group) will see costs go up a whopping 49%. If your employer opts to pay the penalty and to drop out or not offer insurance coverage, those individuals left on their own will see these huge 49% increases. Of course some will qualify for the government subsidy to offset a portion of that cost increase.
It is always easier to bring on change that destroys than it is to change things for the better. If you are an empty suit, albeit a well-tailored empty suit, you can promise change and transformation for America easily enough. If you are a Marxist, the direction your change and transformation will take will prove dramatic for Americans and carry with it mass destruction on a scale most Americans cannot conceive of. Americans voted for this change, which was hiding in plain sight behind an empty suit and fine, reassuring rhetoric to those who did not think about the meaning of what they were hearing. In a democracy, even in America given our choice to ignore our Constitution and the sole individual-rights-protection reason for government, the sins of the majority are jackboot visited upon all without discrimination.