August 13, 2009

History of Government health care costs

The house has passed HR3200 "America's Affordable Health Choices Act". As a general rule, one should assume that a bill does the exact opposite of what the title says, so "Affordable" and "Choices" in the title are red flags. The summary is:
This is the House Democrats' big health care reform bill. Broadly, it seeks to expand health care coverage to the approximately 40 million Americans who are currently uninsured by lowering the cost of health care and making the system more efficient. To that end, it includes a new government-run insurance plan to compete with the private companies, a requirement that all Americans have health insurance, a prohibition on denying coverage because of pre-existing conditions and, to pay for it all, a surtax on households with an income above $350,000.

It isn't like this is the first government run health program. We have many of them. So lets look at the performance of the others to see if we can predict the performance of this. Promoters of this bill estimate that it will cost about $1 trillion over the next 10 years. Negotiators in the Senate and House are now saying they've whittled the cost down to "only" $900 billion or so.

From 1968 to 2007 federal spending went from $178 billion to $2,729 billion. So overall spending has increased 15 times in 40 years.

As Medicare was being considered in the 1960's it was estimated to cost $10 billion by 1990, actual costs were $107 billion that year, so congress estimated 10 times less than the actual costs! Medicare went from a cost of $5.1 Billion in 1968 to $436 billion in 2007, an incredible increase of 85 times the original cost 40 years ago!

What about Medicaid? In 1968 the program cost $1.8 billion, 40 years later it is at $191 billion. That is a ridiculous 106 fold increase in the cost of the program!!!!

So will Obama's health care plan be better? Empty promises is all it is.
If it follows the other similar programs, it will cost $10 Trillion dollars in 25 years, that is 4 times ALL Income tax from EVERYONE collected today!
So obviously it can not be paid for by taxing ONLY those earning over $250,000 a year as Obama has promised.
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