Cost of Healthcare Reform

The “Healthcare” legislation is now in the Senate. Harry Reid is Senate Majority Leader, and he likes the new Congress Visitor’s Center because he doesn’t have to smell the tourists anymore.

Stay classy, Harry. The visitors center was supposed to cost $265 million, but wound up costing $621 million. Sez so right here: Congress’s $621M visitor center set to open

So they were off by 234 percent…

Which leads us to:

Health Costs and History

Washington has just run a $1.4 trillion budget deficit for fiscal 2009, even as we are told a new health-care entitlement will reduce red ink by $81 billion over 10 years. To believe that fantastic claim, you have to ignore everything we know about Washington and the history of government health-care programs. For the record, we decided to take a look at how previous federal forecasts matched what later happened. It isn’t pretty.

Must-read!!!

Congressional forecasters in predicting costs. Start with Medicaid, the joint state-federal program for the poor. The House Ways and Means Committee estimated that its first-year costs would be $238 million. Instead it hit more than $1 billion, and costs have kept climbing.

Thanks in part to expansions promoted by California’s Henry Waxman, a principal author of the current House bill, Medicaid now costs 37 times more than it did when it was launched—after adjusting for inflation. Its current cost is $251 billion, up 24.7% or $50 billion in fiscal 2009 alone, and that’s before the health-care bill covers millions of new beneficiaries.

Medicare has a similar record. In 1965, Congressional budgeters said that it would cost $12 billion in 1990. Its actual cost that year was $90 billion. Whoops. The hospitalization program alone was supposed to cost $9 billion but wound up costing $67 billion. These aren’t small forecasting errors. The rate of increase in Medicare spending has outpaced overall inflation in nearly every year (up 9.8% in 2009), so a program that began at $4 billion now costs $428 billion.

The Medicare program for renal disease was originally estimated in 1973 to cover 11,000 participants. Today it covers 395,000, at a cost of $22 billion. The 1988 Medicare home-care benefit was supposed to cost $4 billion by 1993, but the actual cost was $10 billion, because many more people participated than expected. This is nearly always the case with government programs because their entitlement nature—accepting everyone who meets the age or income limits—means there’s no fixed annual budget.

Kind of like Obamacare.

Their track record:

Program	Year	Predicted cost	Actual Cost
Medicare	1965	$12 Billion	$110 Billion
Medicare Hospital	1965	$9 Bill	$67 Bill
Medicaid Hospitalization	1987	$1 Bill	$17 Bill
Medicare Homecare	1988	$4 Bill	$10 Bill
Schip	1997	$5.4 Bill	$6.8 Bill
Medicare Prescription Drug	2003	$49 Bill	$41 Bill

Wow. What’s the danger that this “healthcare” will cost more than they are telling us?

‘Fuzzy math’ could drive health bill cost higher

The official $1.1 trillion price tag for the House Democrats’ health care bill excludes dozens of unfunded programs that could drive up costs when future congresses look to fund them.

Republicans said the health care bill includes two dozen programs whose funding is listed as “such sums as may be necessary.”

How is “such sums as may be necessary” different than a blank check?

It is in Congress, though, where bills get written, that creative math is elevated to an art.

Can’t argue with that. The deficit is already sky-high.

If they have their way, they will force us to buy “health insurance,” they will determine what it will cover, they will tell us how much we will pay…

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