May 4, 2010

The Healthcare Bill Due to Come Due

Justin Katz

A recent essay in National Review by Avik Roy takes up the topic of healthcare inflation resulting from ObamaCare (emphasis in original):

Consider the numbers: Based on the gimmick-free assessment of former Congressional Budget Office director Douglas Holtz-Eakin, from 2010 to 2019 the act will increase the debt by $562 billion — almost $5,000 per household. Not great news, to be sure. But a PriceWaterhouseCoopers analysis projected that, over the same ten-year period, Obamacare will increase the cost of health insurance by approximately $20,000 per family.

This cost will be borne primarily by the young, who will be forced to subsidize the care of the middle-aged; by freelancers and small-business owners, who will not benefit from the exemptions afforded to large, self-insured employers; and by middle-class families, who will most feel the squeeze of higher insurance costs yet will also be expected to finance the health care of others.

The effects of this legislation on the debt are worrisome indeed. But, barring a Weimar-style collapse of the U.S. economy, they will be less visible to the typical family than health-care inflation will be. Rapidly rising insurance premiums will blow a hole directly in the monthly paychecks of tens of millions of middle-class households.

Mandates, consumer incentive to avoid "insurance" until it's actually needed, redistribution of costs from people in public programs to people with private insurance, and protection of monopolistic players are some of the ways in which the Democrats' big-government variation of "reform" will only exacerbate our healthcare system's current problems.

When polls ask about support for reform, respondents mean (or ought to mean) government action in pretty much the opposite direction from that which the Democrats have taken. That's why even in Rhode Island a majority supports repeal of ObamaCare.

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Let's see.......

In the last 10 years, the cost of health care for a family of 4 has went up 100%, from about $4300 per person (17,200 per family) to about 8600 per person (34,400 per family).

If we somehow only increased the same amount, a seeming impossibility with double digit yearly increases, then health care would go UP about 35K for that same family by 2020.

Therefore, if it only goes up $20K, that is an incredible savings!

As usual, right wing talking points assume the low IQ of the readers.

Posted by: Stuart at May 4, 2010 3:32 PM

You cheap shot artist. Stuart has set your Krazy Katz Accounting straight. I might remind you that ObamaCare does not exist except in the mind of certain Tea party fanatics and wingnuts.

You Krazy Kat, why not use the official title of the legislation? Why are you afraid of calling the legislation by its proper name?

We'll soon find out what the majority of Rhode Islanders think about the program, and your scurrilous remarks will be dispatched to the political junk heap.

Posted by: OldTimeLefty at May 4, 2010 4:46 PM

The thing about Justin is that he finds fault with virtually everything - must be a tenet of his religion.

But he fails to offer either alternative suggestions....and, by inference, he tries to make his reader assume that the "conservative" or "right" side of the political spectrum would somehow do a better job than the status quo.

Of course, the actual that the GOP has never done a single thing to reform health care or rein in costs...they don't seem to get in the way.

A hint for Justin - anyone can sit back and find fault with everything. But that is no great skill.

Fixing that is a talent worth pursuing!

Another hint - reading stuff like the National Review is not going to educate a person about reality. After all, this is the pub that fired the SON of it's founder because he disagreed with them about a political position!

The amazing thing about the current conservative movement in this that it never existed either here or anywhere else as a form of government. It is simply an exercise in opposition without any real meat of its own.

Posted by: Stuart at May 4, 2010 5:13 PM

No, OTL. Stuart just didn't read the text to which he's responding (which is pretty much his standard OP).

Note: "Obamacare will increase the cost of health insurance by approximately $20,000 per family." There's a difference between the effect that Obamacare will have and the total inflation of healthcare costs. It'd certainly be reasonable to argue the points jointly and separately, but Stuart does neither.

Posted by: Justin Katz at May 4, 2010 5:58 PM

The national review? They got sick on salmon and fell in love with Palin. You use THEM as a source? I would expect this post from BOB(chickenlittle)N.

Posted by: David S at May 4, 2010 7:25 PM

My doctor cousin says half his patients are asking him "when does my insurance go down under Obamacare?"
The answer of course is "Never".
Progressives-the dumbest people on the planet.

Posted by: Tommy Cranston at May 4, 2010 8:08 PM

So, Justin, let's get this straight so we can talk in 10 years and see how wrong you were.....

Health Care is now $8700 per person per year.
Under the status quo GOP, it doubled or more in 10 years, which means it will be $17,400 in 2020.

But you claim it will go up about 5-6K per person more than that, so you are claiming our health care costs per capita in the USA will be over 22K per person in 2020???

Interesting that Rethugs are so good at telling us what is going to happen in the far future- while at the same time, they often think the rapture (end of the world) is coming any day now!

As to when your health care costs are going down.....that's pretty infantile! I'm amazed that any blood relation of Tommys could get a medical degree.....but that aside, ask your cousin when they were going down under the Republican Rule.......

Oh, and Tommy, it is well proven that conservatives are dumber than progressives, but it's only about 6 IQ points - not enough to explain how dumb some on the right ACT. Therefore, I must assume they are smart as foxes - they only act dumb to put money into their own pockets.

Posted by: Stuart at May 4, 2010 9:20 PM

As to predictions from this blog, its card carrying members predicted a resounding national defeat for the Democrats in November 2008. It didn't happen. Some people never learn.

Keep up your missionary work, Stuart although it must be frustrating trying to shed light on such dense darkness.

In a year or two, Justin will drop the Health Care issue like a hot potato (potatoe, if you vote Republican). The poor fellow never mentions his one time unwavering support for the Iraq invasion. This blog was full of such crap. Seems to have been abandoned when the quest for Weapons of Mass Destruction was revealed as Weapons of Mass Deception. The batting average is very poor, but what the hell, you start with false premises, you end up with false conclusions! It's basic Aquinas scholasticism, Justin. You should give it a try.

Posted by: OldTimeLefty at May 4, 2010 10:33 PM

I gotta say - I met Justin for the first time the other day on TV....and he looks like he is uptight! I don't mean that in a bad way, just that he is not having fun.

Justin - you are young and strong! Get surfing, sailing, biking, eating, making love and doing all those fun things while you have your health! This politics and negativity thing is going to take you down down down.

No one ever sat on their death bed and thought "you know, if only I got one more republican elected and we held the line on taxes in Tiverton".....

Ah, lefty, I don't get frustrated with righties. I expect them not to make sense, Justin thinks that just because he actually writes full sentences, therefore they must contain truth! But BS is BS, whether spewed by a KKK member or a self-described Catholic adherent.

And, yeah, what's with rightie Catholics? I didn't think there was such thing.

Posted by: Stuart at May 4, 2010 10:50 PM

If a current low deductible family health insurance plan costs $1,500 per month (this is an accurate figure) and is increasing 10% per year, that same plan will cost $3,090 per month or roughly $ 47,000 per year in 2020.

$47,000 - $17,000 = $30,000 increase over that period of time.

Compare that with the ObamaCare projections.


Posted by: Publius at May 4, 2010 11:34 PM

If a current low deductible family health insurance plan costs $1,500 per month (this is an accurate figure) and is increasing 10% per year, that same plan will cost $3,090 per month or roughly $ 47,000 per year in 2020.

$47,000 - $17,000 = $30,000 increase over that period of time.

Compare that with the ObamaCare projections.


Posted by: Publius at May 4, 2010 11:35 PM

Ah, Alexander....

But you see - since Justin and NR figures are all made up in the first place, they will simply adjust a few words and meet any goal which is desired.

It's quite easy.

Unlike you and the other founders, they don't back up their words with actual deeds and work. Rather they snipe from the rooftops and make a certain minority think "oh, if only those tyrants on the right had their way, they'd whip government into shape".

Problem is, after Nixon and Bush/Cheney, they have little real proof to point to. Therefore, they ask us to take it on "faith" a last resort.

If you really want to be sure of the facts, watch Glen Beck.

Posted by: Stuart at May 5, 2010 8:47 AM

your beloved Messiah just jammed through a trillion dollar boondoggle which increases taxes, stifling job growth.
If it doesn't lower insurance costs (and it won't) the marks will "remember in November".

Posted by: Tommy Cranston at May 5, 2010 8:53 AM

Anyone who believe the Administration's or the CBO's projections of the costs of Obamacare is a naive fool. Every estimate of the cost of government social programs since the New Deal has been ludicrously low, with the actual costs being multiples of the projections, not mere percentage variances, within only a few years.

So since the Leftist arguments above are based on these official projections, they are immediately invalidated.

Posted by: BobN at May 5, 2010 9:28 AM

When people use "health care" and "health insurance" interchangeably it is very telling.

Posted by: JP at May 5, 2010 10:02 AM

The progressives in this thread assuming that health insurance costs will continue to increase by the same percent each year indefinitely are making a horrible assumption. They made the same assumptions about increases in the price of gasoline, and that turned out to be equally wrong. Health insurance is a skewed, corporatist oligopoly created and backed by government, but it's still not perfectly inelastic. No responsible economist would make such outrageous and arbitrary assumptions.

Posted by: Dan at May 5, 2010 11:09 AM

So what you are saying, Dan, is that the fact that it has went up that way for the past 12 years or more...and the fact that we have seen double digit increases projected into the future...that all means nothing???

That is a ridiculous assumption! Unlike Oil, we don't drill for health care, nor can we invade foreign countries or buy it from them cheap.

There is absolutely no reason for all the health care corporations to do anything other than, like Wall Street, take us all for our bottom dollars. In this case, they are taking both us individually and also collectively....but breaking the government with the same high health care costs.

If we put away the pipe dreams of libertarians, we are left with only a couple choices....

1. The outlook of the GOP - who did nothing about health care, and actually continue to fight for increased corporate profits.

2. Change and reform - the existing bill is very weak largely because the republicans and some corporate democrats wanted it that way. But it is better than #1.

No, costs will not go down. But maybe, after 3-7 years, they will only go up 1 to 3% a year instead of 8% to 30% plus as we have seen lately.

Posted by: Stuart at May 5, 2010 5:22 PM

On what kind of economics are you basing your claim that we should rationally expect mandates, subsidies and Federal regulation to reduce the cost of something?

Posted by: Andrew at May 6, 2010 3:58 PM
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