Tuesday, August 04, 2009

Apply the inverse-Scotty calculation to all government-run healthcare programs

You remember Scotty from Star Trek? If he said it would take him four hours to fix the warp drive on the Enterprise, that meant two hours - tops. When it comes to federal spending on health care, any number is going to be the lowest of the lowball. Here's a little history from the Medicare system:

When Medicare was enacted in 1965, official government projections foresaw hospital spending - the program's largest component - reaching only $9 billion in 1990. Actual Medicare spending on hospital care in that year was $66 billion, or over seven times as high. One result is that Medicare's payroll tax is now nearly double what its sponsors said would be necessary (having been raised most recently in 1994), and Congress increasingly relies on other revenue sources to meet Medicare's obligations.
And let's not forget this more recent government program. WashPost: "Medicare drug benefit may cost $1.2 trillion - Estimate dwarf's Bush's original price tag."

The White House released budget figures yesterday indicating that the new Medicare prescription drug benefit will cost more than $1.2 trillion in the coming decade, a much higher price tag than President Bush suggested when he narrowly won passage of the law in late 2003.
And what is the Congressional Budget Office saying now?

But even the nonpartisan Congressional Budget Office says that none of the health plans pending on Capitol Hill would control long-term spending, and that ones with the elements Obama wants would add around $1 trillion to the deficit over the next 10 years.
If the CBO is saying $1 trillion, go ahead and assume $3 trillion.

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