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HEALTHCARE DELUSIONS

“The urge to save humanity is almost always a false front for the urge to rule.”
                                                                                                H.L. Mencken

Unleashing a new multi-trillion dollar entitlement hurricane, when we already have the Social Security/Medicare hurricane bearing down on us and a Federal Reserve caused Depression level 5 hurricane already raging will have calamitous consequences for our nation. The ideologues on both sides of the healthcare debate care only about the next election and how they will spin the votes of their opponents to attain victory. The economic consequences of this 2,400 page bill are secondary because these politicians will be retired or dead when our grandchildren get the check.  

Politicians have demonstrated over decades to be completely ignorant of the long-term impact of the rules and regulations they have inflicted upon the American people. For those who believe that creating a new entitlement for 32 million people, hiring 16,500 new IRS agents to enforce the new regulations, and allowing government boards to make your healthcare decisions for you will reduce costs and improve healthcare, I will point you to the facts versus promise of prior legislation. A Senate Joint Economic Committee released a report in 2009 found that health care plan costs are always dramatically underestimated by the politicians that create the entitlements:

·         Medicare (hospital insurance) -  In 1965, as Congress considered legislation to establish a national Medicare program, the House Ways and Means Committee estimated that the hospital insurance portion of the program, Part A, would cost about $9 billion annually by 1990.v Actual Part A spending in 1990 was $67 billion. The actuary who provided the original cost estimates acknowledged in 1994 that, even after conservatively discounting for the unexpectedly high inflation rates of the early ‘70s and other factors, “the actual [Part A] experience was 165% higher than the estimate.”

·         Medicare (entire program) - In 1967, the House Ways and Means Committee predicted that the new Medicare program, launched the previous year, would cost about $12 billion in 1990. Actual Medicare spending in 1990 was $110 billion—off by nearly a factor of 10.

·         Medicaid DSH program - In 1987, Congress estimated that Medicaid’s disproportionate share hospital (DSH) payments—which states use to provide relief to hospitals that serve especially large numbers of Medicaid and uninsured patients—would cost less than $1 billion in 1992. The actual cost that year was a staggering $17 billion. Among other things, federal lawmakers had failed to detect loopholes in the legislation that enabled states to draw significantly more money from the federal treasury than they would otherwise have been entitled to claim under the program’s traditional 50-50 funding scheme.

·         Medicare home care benefit - When Congress debated changes to Medicare’s home care benefit in 1988, the projected 1993 cost of the benefit was $4 billion. The actual 1993 cost was more than twice that amount, $10 billion.

·         Medicare catastrophic coverage benefit - In 1988, Congress added a catastrophic coverage benefit to Medicare, to take effect in 1990. In July 1989, the Congressional Budget Office (CBO) doubled its cost estimate for the program, for the four-year period 1990-1993, from $5.7 billion to $11.8 billion. CBO explained that it had received newer data showing it had significantly under-estimated prescription drug cost growth, and it warned Congress that even this revised estimate might be too low. This was a principal reason Congress repealed the program before it could take effect.

Based on this track record, do you believe President Obama when he declares that his national healthcare plan will save $136 billion in the first ten years? It appears the rocket scientists on the Democratic side of the aisle have trouble estimating the costs of the entitlements they hand out on a regular basis. Republicans, on the other hand, tend to slightly underestimate the cost of their invasions (Rummy says $50 billion; taxi meter says $977 billion and counting).

Platform for Your Lies

For the last few decades Congress could get away with silence as the public was preoccupied with getting rich day trading, flipping houses, and buying electronic gadgets with limitless credit cards. Their backroom deals and corporate payoffs were ignored. Not anymore. These “servants of the people” have had the curtain pulled back, revealing their foul deeds. The mood of the country changes dramatically during a Crisis period. The citizens will not ignore what was overlooked in the 1990’s. Leaders will be held accountable for their actions. Institutions will be replaced if they fail. Civility will be cast aside. Violence, pain and sacrifice are inevitable. The politicians with common sense are fleeing Washington in droves, retiring and accepting jobs with the companies that bought their votes for the last few decades.

The last year has been a never ending competition of lies. The American public has been subjected to misinformation and lies from the tongues of politicians who hire pollsters and PR firms to fabricate their propaganda. Democratic talking points hammered home incessantly are:

·         Insurance companies are evil and must be stopped from screwing Americans.

·         The healthcare plan will reduce deficits by $136 billion in the 1st ten years and $1 trillion in the 2nd ten years.

·         The healthcare plan will reduce Medicare waste by $500 billion.

·         The biggest middle class tax cut for healthcare in history.

Even the pundits on CNBC know the stock market is a discounting mechanism that looks forward 6 to 12 months. With Obama blaming insurance companies for everything that is wrong with our healthcare system and declaring an end to their reign of terror, you would think their stocks would reflect a miserable future. As you can see from the chart below the five biggest insurance companies in the country are dancing in the aisles of Congress over this plan. It is funny how their stocks have doubled the market while Obama declares he is going to stick it to them. Considering insurance company and drug company lobbyists wrote large portions of the bill, maybe Obama was stretching the truth, just a little.

Company

26-Mar-09

26-Mar-10

% Change

S&P 500

$833.00

$1,167.00

40.1%

Aetna

$24.39

$34.32

40.7%

CIGNA

$18.62

$35.90

92.8%

United Health

$21.59

$32.63

51.1%

Wellpoint

$36.42

$63.05

73.1%

Humana

$25.06

$47.20

88.3%

    

The truth is that Obamacare will increase budget deficits, increase costs for everyone, decrease levels of service, increase wait times for procedures, and drive doctors out of the profession. Only a delusional ideologue could believe that throwing 32 million people into the healthcare system could possibly reduce costs. Democrats specifically wrote the bill in a way to manipulate the CBO scoring system. Douglas Holtz-Eakin, the CBO director from 2003 to 2005, knows all the tricks of the trade. His assessment of the bill concludes that the federal deficit will increase by $562 billion. The major deceptions in the healthcare bill are as follows:

·         The bill declares it will trim $463 billion from Medicare spending and use it to finance insurance subsidies. But Medicare is already bleeding red ink, and the health care bill has no reforms that would enable the program to operate more cheaply in the future. Instead, Congress will continue to regularly override scheduled cuts in payments to Medicare doctors and other providers. With an anticipated 200,000 doctor shortage by 2020, Congress will never make these cuts.

·          To operate the new programs over the first 10 years, future Congresses would need to vote for $114 billion in additional annual spending. But this so-called discretionary spending is excluded from the Congressional Budget Office’s tabulation.

·         The bill uses $53 billion in anticipated higher Social Security taxes to offset health care spending. Social Security revenues are expected to rise as employers shift from paying for health insurance to paying higher wages. But if workers have higher wages, they will also qualify for increased Social Security benefits when they retire. So the extra money raised from payroll taxes is already spoken for. It cannot be used for lowering the deficit.

These are just the costs that were purposely misrepresented in the healthcare bill. The unintended consequences in a 2,400 page bill that was not read by the people who voted for it will be immeasurable. The Bill will bring 32 million high usage people into the healthcare system and force insurance companies to cover people with pre-existing conditions. Sounds like a humane thing to do. The last time I looked, insurance companies are for-profit entities. If they are forced to take on riskier customers, they will increase premiums on all their customers. According to the Congressional Budget Office, insurance premiums will double in the next few years. The bill will do nothing to lessen that increase. Obama pays for large swaths of the bill by taxing people making over $200,000 and imposing fees on drug manufacturers, health insurers, and medical device manufacturers. The rich will change their behavior to avoid these taxes. It seems ironic that many of the Americans that earn more than $200,000 per year are doctors. The corporations will pass along the fees and taxes to the consumers of their products.

It is clear that prices for all forms of healthcare will be going up. At least we can be sure that services levels and care will decline while wait times for service go up. There is no doubt that many doctors will choose to shrink their patient loads or retire. In Massachusetts, after the passage of Romneycare, the wait to see a primary-care physician increased from 33 to 52 days. Surely adding 159 new programs, thousands of new rules and regulations, and a boatload of government bureaucrats will improve healthcare for all. Doctors will face greater workloads, lower reimbursements and still be subject to frivolous lawsuits by ambulance chasers, as the Democrats surprisingly chose not to address medical malpractice lawsuits. Despite the future doctor shortage, higher premiums, longer wait times, more paperwork, and boards of bureaucrats deciding your treatment, at least you have the comfort of knowing the IRS will be enforcing the 2,400 pages of rules and regulations with threats of fines and imprisonment. The IRS is well known for their extreme competence and ability to enforce rules and regulations. There are already 100,000 pencil pushers occupying the offices of the IRS. They are so efficient in their existing endeavors that it is estimated that they have somehow not collected $354 billion of taxes that they are owed. They now have the green light to hire 16,500 more enforcement agents to crack skulls if you fail to purchase government healthcare. Thomas Sowell sums up the fantasy that only an intellectual could believe:  

 

“It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think that we can afford to pay for doctors, hospitals, medication and a government bureaucracy to administer it.”



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