Friday, March 19, 2010

Cost Myths

Jeffrey H. Anderson has a devastating deconstruction of the various bureaucratic tricks used to make the reconciliation package look financially sustainable. Some key paragraphs:

To see the bill’s true first-decade costs, we need to start the clock when the costs would actually start in any meaningful way: in 2014. The CBO says that Obamacare would cost $2.0 trillion in the bill’s real first decade (from 2014 to 2023) — and much more in the decades to come.

But $2.0 trillion wouldn’t be the total ten-year costs. Instead, that would merely be the “gross cost of coverage provisions.” Based on earlier incarnations of the proposed overhaul, the total costs would be about a third higher (the exact number can’t be gleaned from the CBO’s analysis, which is only preliminary and is not a full scoring) — making the total price-tag between $2.5 and $3 trillion over the bill’s real first decade.

How would we pay for all of this? According to the CBO, by diverting $1.1 trillion away from already barely-solvent Medicare and spending it on Obamacare, and by increasing taxes on the American people by over $1 trillion. Among the Medicare cuts would be cuts of $25,000 in Medicare Advantage benefits per enrollee — up from $21,000 in the previous scoring.

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