Health Care Reform: Truth vs. Fiction

Today's Wall Street Journal has an excellent editorial along with excerpts from the remarks of Congressman Paul Ryan (R-Wisconsin) dealing with the true costs of health reform. As the WSJ editors put it, Congressman Ryan's remarks "methodically dismantle the falsehoods -- there is no other way of putting it -- that Mr. Obama has used to sell 'reform' and repeated again yesterday."

These falsehoods include:
(1) The bill (presumably the senate version) will reduce the deficity by $131 over the next 10 years. The CBO figures come out that way because the bill engages in smoke and mirror financing tactics, which underestimate the true costs. Among the deceptive features, the bill covers 10 years of tax revenues (estimated at about half a trillion dollars) along with cuts in Medicare that no one believes are sustainable (also about half a trillion dollars, covered here in a prior blog -- including a 22 percent cut in medicare reimbursements beginning next month) to pay for six years of new spending.

If seniors think they have a hard time getting treatment now, just wait until those cuts are implemented. The political reality, though, is that the Congress probably won't let those cuts be implemented, but the costs of that separate bill won't be included in this one, thus adding to the attempted deception of the American people. Although the President claims that he would not sign a bill that would increase the deficit, it will do just that, adding to crushing burdens that we already face in unfunded liabilities for medicare, medicaid, and social security.

Adding insult to injury, the senate bill also takes funds from increased social security tax revenues and uses them to finance health care. But wait a minute -- as Rep. Ryan points out -- "either we are double counting them or we don't intend on paying those Social Security benefits." He makes similar points on funds from the long-term care insurance program.

(2) It does not "bend the cost curve downward." Rep. Ryan points to the chief actuary of Medicare for this fact, which is hard to dispute. And of course, there is the matter of what it means for government to bend the cost curve at all. Greater efficiencies through technological or other productivity gains would be a legitimate basis for changing medical costs, but those gains or hard to deliver, especially when the bill adds new layers of government regulation. Those who are outraged by insurance premium increases may need to learn that just because the government says premiums must go down does not necessarily generate cost savings without some corresponding reductions in services.

Our comrades may disagree with us about the level of federal government involvement in healthcare delivery. But if you want to deliver a good, you need to articulate a sound means for financing it. The President's proposal does not do that. It simply leaves a bigger problem for a subsequent Congress -- and as discussed in my previous entry, subsequent generations --to solve. And that is not responsible government by anyone's definition.

EAM