Tag: health care bills

What Will the Reid Bill Cost?

Michael Cannon has some astute analysis of the Senate health care bill below. I posted these thoughts at Politico’s Arena:

According to the Chamber of Commerce polls, strong majorities in every state they polled believe the health care bills will increase the deficit. In this case the public’s cynical instincts are almost certain to be more accurate than the computer models of the CBO. As David Dickson of the Washington Times reviewed yesterday, government health care programs have a history of cost overruns.

And not small overruns, like overdrawing your checking account – massive, order-of-magnitude cost overruns. Is that because politicians intentionally overstate the benefits and underestimate the costs of their proposals? Or just that computer models aren’t very good at predicting how entitlements programs change behavior? Either way, just look at the record: In 1967, the House Ways and Means Committee said the entire Medicare program would cost $12 billion in 1990. The actual cost in 1990 was $98 billion. In 1987, Congress projected that Medicaid would make special relief payments to hospitals of less than $1 billion in 1992. The actual cost, just five years after the projection, was $17 billion. Similarly, Medicare’s home care benefit was projected in 1988 to cost $4 billion in 1993, but the actual cost – again, just five years after the projection – was $10 billion.

The government is running a trillion-dollar annual deficit already, and Congress and the president propose to create a new program that promises to cover millions more people with health insurance, drag currently insured people onto government programs, and save billions of dollars in the process. No wonder levels of trust in government are at record lows.

Are Savvier Democrats Playing Rope-a-Dope?

Let’s simplify things and say there are essentially two parts to the health care bills moving through Congress: an individual mandate that would effectively nationalize health care, and a government-run program that would explicitly nationalize it slowly, over time.

One explanation for Majority Leader Harry Reid (D-NV) including the government-run program – supporters call it a “public option”; I prefer Fannie Med – in the Senate bill is that Fannie Med’s popularity is on the rise.  Another explanation is that Reid had to include it to remain majority leader and get left-wing Nevadans to work for his re-election.

But a third explanation, not inconsistent with the others, is that the savvier Democrats know that all they need to nationalize health care is an individual mandate.  So they’ll let Fannie Med take a beating, and then pass the more sweeping individual mandate when opponents are too exhausted and distracted by their “victory” over Fannie Med to notice.

(Cross-posted at Politico’s Health Care Arena.)