Thursday, March 4, 2010

Paul Ryan vs. President Obama on the cost of health care "reform"

First, from the WSJ editorialists on Paul Ryan's remarks, which

...methodically dismantle the falsehoods—there is no other way of putting it—that Mr. Obama has used to sell "reform" and repeated again yesterday. No one in the political class has even tried to refute Mr. Ryan's arguments, though he made them directly to the President and his allies, no doubt because they are irrefutable. If Democrats are willing to ignore overwhelming public opposition to ObamaCare and pass it anyway, then what's a trifling dispute over a couple of trillion dollars?...

Mr. Obama's fiscal assertions are possible only because of the fraudulent accounting and budget gimmicks that Democrats spent months calibrating. Readers can find the gory details in Mr. Ryan's pre-emptive rebuttal...one of the most egregious deceptions is that the bill counts 10 years of taxes but only six years of spending...

The real cost over a decade is about $2.3 trillion on paper, Mr. Ryan estimates, and even that is a lowball estimate considering how many people will flood to "free" health care and how many businesses will be induced to drop coverage....

Yesterday Mr. Obama again invoked the "nonpartisan, independent" authority of CBO, which misses the reality that if you feed the agency phony premises, you are going to get phony results at the other end...


Then, from the Paul Ryan WSJ op-ed piece cited in the editorial-- remarks made by the Congressman at President Obama's summit on health care, Feb. 25:

Look, we agree on the problem here. And the problem is health inflation is driving us off of a fiscal cliff...

The majority leader said the bill scores as reducing the deficit $131 billion over the next 10 years. First, a little bit about CBO. I work with them every single day—very good people, great professionals. They do their jobs well. But their job is to score what is placed in front of them. And what has been placed in front of them is a bill that is full of gimmicks and smoke-and-mirrors...

Now, what do I mean when I say that? Well, first off, the bill has 10 years of tax increases, about half a trillion dollars, with 10 years of Medicare cuts, about half a trillion dollars, to pay for six years of spending. Now, what's the true 10-year cost of this bill in 10 years? That's $2.3 trillion....

And it goes on from there...

2 Comments:

At March 4, 2010 at 5:22 PM , Blogger William Lang said...

If the Democrats propose mechanisms to control costs, the Republicans accuse them of rationing, of having the government decide who gets what care or how much care.

If a reform requires insurance companies to provide coverage regardless of medical status, the reform must have a mechanism requiring people to be covered; else the insurance companies will be trapped in a death spiral from people who don't bother seeking coverage until they are ill. So now we have mandates, which Republicans characterize as the government forcing you to get insurance.

But many people simply wouldn't be able to afford the premiums, so you must have a subsidy to support them. This in turn must be financed, which gives the Republicans an opportunity to complain about increased taxes or deficits.

So it appears that health care reform at the national level is politically impossible. We won't have reform. We will be continued to be burdened with health care inflation and large numbers of people who cannot afford coverage.

But perhaps, as you have suggested, reforms can be tested state-by-state. The Canadian system originated that way, province-by-province. Perhaps the Massachusetts model will serve—newly elected senator Scott Brown supported this in 2006. Or perhaps Mitch Daniels 'Healthy Indiana' initiative will develop into a successful model: health savings accounts coupled with subsidized catastrophic care coverage. This model might avoid political problems of other systems, by emphasizing personal responsibility for buying coverage.

 
At March 5, 2010 at 8:13 AM , Blogger Eric Schansberg said...

I agree with you on the politics in your first few paragraphs. But in this case, there is economic reality behind those claims. And that stands in contrast to the obfuscation and lies behind much of the Democratic position. (The GOP is quite capable of the same, but here, for a variety of motives and reasons, they come out looking relatively good.)

Controlling costs means rationing-- or it means that the govt was wasting a ton of money and somehow we should trust them to grow it and run it more efficiently. Hmm...

More govt involvement means, well, more govt control. How much more? Only the shadow knows, but it's a very reasonable concern.

Mandates would accomplish what you say, but they bring other baggage philosophically and practically-- most notably, forcing people to buy a very expensive policy. A mandate to have catastrophic coverage and preventative care addresses your concern and limits the baggage.

Especially if there is catastrophic and preventative coverage, modest subsidies for those who are lower-income is fine. But too much coverage complicates this. And in any case, it will cost money. Dems often pretend as if this would be low cost or would even reduce costs.

Absent market-based reforms, yes, we will continue to have these problems. State-to-state would an improvement-- perhaps a dramatic one (as per your IN example of HSA's and catastrophic coverage). But we'll have to see if they jam something through at the federal level first.

 

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