It Turns Out, The Cost Of Free-Riding Is A Straw Man Argument For ObamaCare

Thanks to Ronald Reagan's signature on EMTALA in 1986, hospitals must by law provide service to anyone, regardless of ability to pay among other things.

It turns out that the costs of this beneficence have indeed grown into a big problem, but it is nowhere near as big a problem as advocates of ObamaCare would like to make out.

Here's the government's best estimate of the problem, from the Congressional Budget Office, which everyone has known about since 2008 (italics added):

"A recent study by Hadley and others, which used that analytic approach, examined a sample of medical claims for uninsured individuals and projected that they would receive about $28 billion in uncompensated care in 2008. That study also examined cost reports from hospitals and a survey of doctors and generated a different estimate: The gross costs of providing uncompensated care would be about $43 billion in 2008, of which $35 billion would come from hospitals and $8 billion from doctors. Total spending on hospital care in 2008 is estimated to be about $750 billion, so those figures would imply that uncompensated care accounts for about 5 percent of hospital revenues, on average. Those findings are consistent with CBO’s analysis of uncompensated hospital care (cited above), which found that a sample of for-profit and nonprofit hospitals incurred costs for such care that averaged between 4 percent and 5 percent of their operating revenues."

So there you have it. The government has known all along that this  has been a problem in the neighborhood of 5 percent of the gross costs of care overall, yet it is preparing under ObamaCare to spend $200 billion annually to bring in the uninsured, almost 5 times as much as the problem warrants, wrecking insurance for everyone else in the process.

House Defiant, Passes Cut, Cap and Balance 234-190

Presidential candidates Bachmann and Paul were among nine Republicans who voted against the plan because it raises the debt ceiling:

The measure, to be taken up by the Senate next, would impose statutory spending caps to wring $5.8 trillion in unspecified savings from the government over the next decade — twice the $2.4 trillion debt ceiling increase that is allowed. Nondefense appropriations face a 30 percent cut from what the Congressional Budget Office now projects for the same period, and even SSI (Supplemental Security Income) payments for the elderly and disabled are exposed to across-the-board sequesters to enforce the reductions.

Read the rest here.

Congressional Budget Office Puts Fannie/Freddie Bailout at $317 Billion

The regime's Office of Management and Budget says it's $130 billion, net of certain repayments, apparently, totaling $34 billion.

Story here.

ObamaCare Will Increase Deficits By Over $500 Billion in First Decade

Sorry. Just correcting the lies.

The article was posted here:

March 25, 2010

Bond Markets Reflect the True Cost of Obamacare

By Michael Barone

Not many people noticed amid the Democrats' struggle to jam their health care bill through the House, but in recent weeks U.S. Treasury bonds have lost their status as the world's safest investment.

The numbers are pretty clear. In February, Bloomberg News reports, Berkshire Hathaway sold two-year bonds with an interest rate lower than that on two-year Treasuries. A company run by a 79-year-old investor is a better credit risk, the markets are telling us, than the U.S. government.

Buffett's firm isn't the only one. Procter & Gamble, Johnson & Johnson and Lowe's have been borrowing money at cheaper rates than Uncle Sam.

Democrats wary of voting for the health care bill may have been soothed by the Congressional Budget Office's report that it would reduce federal deficits over the next 10 years. But bond buyers know that the Democrats gamed the CBO system to get a good score.

The realities, as former CBO Director Douglas Holtz-Eakin pointed out in The New York Times, are different. The real cost is disguised by the fact that the bill includes 10 years of revenue but only six years of spending. It includes $70 billion in premiums for long-term care that will have to be paid out later. It excludes $114 billion in discretionary spending needed to run the program. It includes nearly half a trillion dollars in unrealistic Medicare savings.

Holtz-Eakins's bottom line: The bill will not lower deficits, but will raise them by $562 billion over 10 years. Treasury will have to borrow that money -- and probably pay much higher interest than it's paying now.

Moreover, once the bill is fully in effect, the Cato Institute's Alan Reynolds points out, its expenses are likely to grow at least 7 percent a year -- significantly faster than revenues. At that rate, spending doubles every 10 years.

No wonder that Moody's declared last week that the Treasury is "substantially" closer to losing its AAA bond rating.

It's not only the federal government that is heading toward insolvency. State governments will have to spend more under the health care bill -- $735 million in Tennessee alone, according to Democratic Gov. Phil Bredesen.

And state governments are already facing a huge problem called pensions. The Pew Charitable Trusts estimates that state government pensions are underfunded by $450 billion. My American Enterprise Institute colleague Andrew Biggs argues in The Wall Street Journal that the real figure is over $3 trillion.

The reason: State governments set aside cash to invest in pensions, but they typically assume that their investments will rise 8 percent a year indefinitely. They haven't been getting such high returns and are not likely to do so in the future. But they are under legal obligations, which courts won't allow them to escape, to pay the pensions. Retirees get paid off before bondholders, which means that states are going to have to pay more interest when they borrow.

Back in the 1990s, Clinton adviser James Carville said that if he was reincarnated he would like to come back as the bond market -- "because you can intimidate everybody." Governments, like all organizations, need to borrow routinely. But investors won't lend unless they think they will be paid back. And they will demand higher interest rates as their loans become riskier.

On Sunday, 219 House Democrats, soothed by their leaders' gaming of the CBO scoring process, voted in reckless disregard of what the bond market has been telling them. Some may share Speaker Nancy Pelosi's optimism that the government's looming fiscal disaster can be avoided by imposing a value-added tax -- in effect, a national sales tax.

But, as we know from the experience of high-tax Western Europe and relatively low-tax America over the last three decades, higher taxes tend to retard economic growth. Lower economic growth means less revenue for government than in CBO projections. Less revenue means more borrowing -- and at some point lenders are going to call a halt.

Barack Obama's project of transforming the United States into something like Western Europe is, according to the CBO, raising the national debt burden on the economy to World War II levels. I see train wrecks ahead -- as the bond market forces huge spending cuts or tax increases first on states and then on the federal government. It will make what happened in the House Sunday look pretty.

On the Dangers Posed by Libertarians

Consider this popular and influential enthusiast for Ron Paul.

He appears to favor a single payer system of federalized healthcare, an enormous interference in the personal liberties of individual Americans, many of whom freely eschew health insurance, from students in their twenties to the rich and successful like Rush Limbaugh. This from the same guy who wants to end the Federal Reserve because of its role in debasing the currency. It should bother him that he would swap debased healthcare for debased currency, but it doesn't.

He realizes, quite rightly, that a single payer system implies rationing of health care. But he's all for that, which means government will most certainly deny services when you desperately need them:

The press seemed concerned with a fear of rationed health care. Some republicans have raised the issue as well.

Mr. President I am concerned there will be no rationing of health care. . . .

Mr. President, unless something is done to rein in costs taxpayers will be footing the bill for a lot of things they shouldn't. In every country that has a single payer system, there is some degree of rationing.

Somehow you have us believe benefits will not be reduced, everything will be covered for everyone, there will be no rationing and somehow health care will cost less because of reduced paperwork. Mr. President, no one believes that, not even the nonpartisan Congressional Budget Office.

Mr. President, to prevent costs from spiraling out of control rationing is mandatory. Unfortunately, you do not have the courage to admit it. Yet until you do, it can't happen.

(Mike Shedlock, 7/23/09)

Then fast forward a few months and he considers it a flaw in the Senate version of the bill that abortions will not be covered (which happens not to be true). Sounds like rationing to me. Yet he's clearly upset abortion will not be paid for:

The bill does allow states to opt out of paying for abortions. This is folly given the huge ongoing costs of unwanted births.

(Mike Shedlock, 12/26/09)

Suddenly the advocate for personal liberty is transformed into a statist potentially as dangerous to life, liberty and the pursuit of happiness as the crew of clowns now infesting Washington, D.C.

My Stand? I am all in favor of the right to die.

(Mike Shedlock, 12/31/09)

Liberty is not all. When it is, it becomes license, not liberty, and exposes one and all to the whims of the powerful, who make it all up as they go. In our time its young victims already approach 50 million since 1973. Now ask yourself how many elderly and infirm are in the gun sights of the rationers of today?

No, law and order must exist before there can be any semblance of liberty, and the sources of our law are too deep, ancient, and complex to be sacrificed to the caprices of the simplifiers of our age.

Take Over the Health Care of All To Provide it to 5% Who Don't Have it Now?

This article appeared here.

December 17, 2009

Government Shouldn't Control Health Decisions

By Larry Elder

Americans overwhelmingly like their health care and their health insurance. While Americans reject ObamaCare, the President and Congress insist on driving it through.

Most Americans, up to 85 percent, already have health insurance and are satisfied with it. Lacking health insurance is different from lacking health care -- which, by law, emergency rooms must supply. Millions go without health insurance by choice and not due to lack of resources. Deduct from the number without insurance those who have access to it via entitlement programs, those temporarily without it while between jobs, those here illegally and those who could go on their parents' insurance plans by paying affordable amounts -- and you're down to 10 million to 15 million people without health insurance for longer than a year. This represents 5 percent of Americans.

To address this, the President and the Democrats are this close to a complete government takeover of health care. And a takeover it is. Assuming some kind of plan reaches the President's desk, it will -- at minimum -- force all Americans to purchase health insurance or pay fines or worse. It will force nearly all employers to provide health insurance or pay fines. It will tell health insurers that they must accept applicants with pre-existing illnesses and restrict their ability to "discriminate" based on factors like sex and age.

Incredibly, the President and Congress tell us that our economic recovery hinges on "health care reform" and that they can achieve it -- providing millions of people with health insurance estimated to cost a trillion dollars in the first decade -- while simultaneously reducing the deficit. The plan anticipates cutting hundreds of billions from the popular Medicare programs, whose beneficiaries vote in numbers greater than any other age group. Doctors and hospitals already complain that Medicare reimbursements fall short of costs, let alone profits. Good luck with that.

"Health care reform" achieves its deficit-reducing magic by collecting taxes in the early years -- building up money -- while paying out very little. Only after the first four years does money go out. It also forces states to pick up part of the tab. So, voila, it actually reduces the deficit -- at least in the first decade.

Then what? The Congressional Budget Office -- in cost estimates full of caveats, conditions and on-the-one-hands -- says that it could/might/may reduce the deficit in the second and third decades, too. Again, this assumes continued cuts in doctor and hospital reimbursements.

Despite the White House photo op of docs in their white frocks, most physicians oppose ObamaCare. They resent further government supervision and control over their practice. A poll commissioned by Investor's Business Daily found that 65 percent "oppose" ObamaCare and that 45 percent would consider taking early retirement or leaving their practice if the bill went through.

Given the broad opposition -- most Americans, most doctors and seniors in fear of cuts in Medicare -- why do it?

First, the Democrats -- now in control of all three branches of government -- have convinced themselves that they face a political price if they fail. ObamaCare supporters, based on bogus assumptions and inflated numbers, argue that many, if not most, bankruptcy filings are due to health care bills. If, as President Obama asserts, "reforming" health care and economic prosperity go hand in hand, how can they abandon it?

Second, while a large majority of Republicans and most independents oppose these "reforms," Democrats overwhelmingly support them. They consider health care and health insurance a right -- never mind the Constitution or the price tag -- and think "the rich" should bear the costs. Congresspersons fear an electorate upset at a failure "to deliver" a victory over the evil, money-grubbing insurance companies.

Third, many believe in good faith that this is the "right thing to do." This breathtakingly ignores the mountain of evidence that government command-and-control health care reduces quality, reduces innovation and inevitably leads to rationing. The president of the Canadian Medical Association says Canada's system -- a single-payer kind, favored by President Obama -- is "imploding." She calls for more competition.

Critics of America's health care system say that citizens in other countries enjoy longer life expectancies. But after adjusting for homicides, increased infant mortality due to teen pregnancies and low birth weights, obesity and other behavioral factors, the discrepancy disappears. Compare American medical outcomes against those of other countries. Our system produces the world's best results for cancer patients who go into medical care at the same time similarly situated patients enter their countries' care. Our pharmaceutical companies lead the world in coming up with new life-extending and -enhancing drugs, a record at risk given new controls and taxes under the guise of "reform."

When the ObamaCare bill comes due -- when the deficit explodes and the costs are "controlled" through government-directed rationing -- supporters, including President Obama, will long have departed Washington, leaving others to deal with the mess. In the meantime, bend over and cough. Or else.

Copyright 2009 Creators Syndicate, Inc.