Obamacare *FAIL*

The President and his allies in Congress have perfected their argument: health care in this country is expensive. Something must be done. This is something. Therefore, we must do this.

Unfortunately, it is clear that the president’s plan is too costly, does not cover the uninsured as promised, and will make health care worse in America. To the first point, the Congressional Budget Office has just issued a report on the proposal. According to the Director of the CBO:

According to our preliminary assessment, enacting the proposal would result in a net increase in federal budget deficits of about $1.0 trillion over the 2010-2019 period. When fully implemented, about 39 million individuals would obtain coverage through the new insurance exchanges. At the same time, the number of people who had coverage through an employer would decline by about 15 million (or roughly 10 percent), and coverage from other sources would fall by about 8 million, so the net decrease in the number of people uninsured would be about 16 million or 17 million.

These new figures do not represent a formal or complete cost estimate for the draft legislation, for several reasons. The estimates provided do not address the entire bill—only the major provisions related to health insurance coverage. Some details have not been estimated yet, and the draft legislation has not been fully reviewed. Also, because expanded eligibility for the Medicaid program may be added at a later date, those figures are not likely to represent the impact that more comprehensive proposals—which might include a significant expansion of Medicaid or other options for subsidizing coverage for those with income below 150 percent of the federal poverty level—would have both on the federal budget and on the extent of insurance coverage.

As Ed Morrissey points out:

We would spend a trillion dollars to achieve a net result of solving a third of the uninsured problem. We could have exceeded that by simply paying for private insurance. Assuming an annual cost of $5,000 for basic catastrophic and wellness coverage, we could purchase 20 million plans for the ten years, without overhauling the rest of the American health-care system.

The respected economist Robert Samuelson puts the point more plainly than a non-partisan organization like CBO can: Obamacare takes us in the wrong direction.

It’s hard to know whether President Obama’s health-care “reform” is naive, hypocritical or simply dishonest. Probably all three. The president keeps saying it’s imperative to control runaway health spending. He’s right. The trouble is that what’s being promoted as health-care “reform” almost certainly won’t suppress spending and, quite probably, will do the opposite…

That’s the crux of the health-care dilemma, and Obama hasn’t confronted it. His emphasis on controlling costs is cosmetic. The main aim of health-care “reform” being fashioned in Congress is to provide insurance to most of the 46 million uncovered Americans. This is popular and seems the moral thing to do. After all, hardly anyone wants to be without insurance. But the extra coverage might actually worsen the spending problem…

The one certain consequence of expanding insurance coverage is that it would raise spending. When people have insurance, they use more health services. That’s one reason Obama’s campaign proposal was estimated to cost $1.2 trillion over a decade (the other reason is that the federal government would pick up some costs now paid by others). Indeed, the higher demand for health care might raise costs across the board, increasing both government spending and private premiums.

In other words, the main effect of Obamacare is likely to be to increase health care costs while reducing the number of uninsured. But according to the CBO, the Obama plan will do little to solve that problem – while increasing health care costs by $1 trillion. Obamacare must be defeated.

There may be some hope however: as Philip Klein points out, the effort to replace the private health care system with a more seriously flawed government system may collapse under its own weight. Then perhaps Congress can consider a serious reform proposal that controls costs and preserve the right of Americans to choose their own doctors.

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