No, the recent health care reform bill will not suddenly sound the death knell for America. And no, we have not slipped into tyranny, as many in the Republican Party and Tea Party movement would suggest. Rather, the recent legislation seems to confirm the shocking ignorance of Democrats and the Obama administration, and their willingness to play deceptive games to foist their expensive ‘vision” on the American people. The bill itself is merely representative of the incremental and creeping expansion of the power of government and the path to eventual fiscal ruin.
The Democrats have repeated ad nauseam that it will cover 32 million Americans, extend the solvency of Medicaid and Medicare by eliminating waste, contain rising health care costs, stop evil insurance company practices and save over $100 billion. If a used-car salesman offered you this same deal would you not question it? You would certainly ask, ‘Is it too good to be true?” Unfortunately, while we can decline the salesman’s offer, we are forced to accept this legislation.
The bill employs several deceptions to make these promises appear true. The first is double counting, which works by taking $500 billion of Medicare funds and using it in the bill’s subsidies. It counts the $500 billion both as savings on the deficit and as expenditures for the plan. This is equivalent to thinking that one minus one equals two. The bill assumes that increases to doctor and hospital reimbursements simply do not exist. According to a Congressional Budget Office report, it will add $59 billion to the deficit. Combine this with a suspension of the ‘Cadillac” tax on health plans, assumptions about cuts to Medicare/Medicaid and subsidy expenses, the CBO reports that over the next two decades the bill would create a deficit of $600 billion.
When comparing the outcome of this bill to current plans, we are in for more trouble. Medicare was poised to cost only $12 billion in 1990, but continual expansion of the program, as well as cost overruns, made the real price tag $98 billion. It now costs $500 billion a year and will rack up $20 trillion in debt over the next fifty years. The same cost growth can be seen with programs like Medicaid and Social Security. The truth is that Obama’s health care bill will be subject to the same expansion and overrun.
One has to look no further than Massachusetts for direct comparison. It has an individual mandate, subsidies to the uninsured and a health care exchange program. While Massachusetts is one of the healthiest and wealthiest states in the union, it also happens to be the state with the highest rising medical costs and already pays the highest premiums out of any state per family, at $13,000 per year. The state’s medical expenditures are outstripping its projections, with Medicaid expenses ballooning from $7.2 billion to $9.2 billion. After three years, Massachusetts is faced with budget deficits or the rationing of care. If we can learn anything, it is that projected costs become prey to political games, with entitlements outstripping their intended costs. Legislation similar to the recent bill has neither controlled health care costs nor made health care more affordable.
On top of the apparent economic problems associated with the health care bill, there are constitutional issues as well: The bill requires a broad interpretation of federal power that must withstand challenges in the court system. The mandate that Americans buy insurance is an expansion of power under the Commerce Clause of the Constitution (Article 1, Section 8). Never has the government forced individuals to purchase a product. Already Virginia has signed its own ‘Health Freedom Bill” nullifying the mandate. Similarly, state attorney generals are readying to challenge it. The mandate, if it holds, may open the door to yet more expansions of federal power.
The recently passed health care legislation is largely endemic of the problems in our government. It demonstrates a willful ignorance of sound fiscal policy. It creates a regulatory and redistributive scheme by raising payroll taxes and forcing us to buy approved plans. The Democrats may demonize the insurance industry, yet this same source gives them billions of dollars in subsidies. While Obama pledged openness in determining the content and conditions of the bill, the back-room dealing, deception, and the failure of the plan to revolutionize the delivery and availability of health care shows its true colors. No, death panels won’t appear overnight, but at its heart the bill expands federal interpretation of the law to new levels. So much for change.
Lipstein is a member of
the class of 2013.
