The Real Cost of Democrat Health Care

The freedom to visit the doctor you want and get the service you need will soon be history; along with many other freedoms we thought were guaranteed by the Constitution. 

The Democrats are assuring us they have all costs of their health care proposals “paid for.”  The “paid for” means they propose sufficient cuts elsewhere and/or raise sufficient new taxes to cover the proposed new expenses.  Here’s how they plan to do it.

Cut health services for seniors 

In order to do this, they plan to cut from $450 billion to $550 billion from Medicare over the next 10 years.  This is the equivalent of cutting all Medicare expenses for more than one whole year out of the next ten.  Said another way, since we now spend $391 billion on Medicare each year, and the Democrats plan to cut $500 billion over the next ten years, assuming the annual expense is $391 each year, this is a 13% cut in money for senior health care.  I guess seniors need to begin voting conservative.  

Cut doctor reimbursements for senior patients 

The low reimbursement rates paid to physicians for Medicare patients are going to get lower as well.  Under the Democrat legislation being passed through Congress, the Medicare physician reimbursement rates will fall about 5% a year beginning now and continuing through 2012.  Cumulatively physicians will receive 31% lower payments for senior health care services than they do now.  The American Medical Association says Medicare payment rates for physicians in the year 2013 will be less than half what they were in 1991.  The result is that seniors who need health care will not be able to find physicians who are willing to accept Medicare payments. 

Ask yourself, what would you do if you knew that you were going to get paid half what you earned in 1991?  If accepting Medicare patients created this result for you, what would you do?  Mr. Obama and leading Democrats say this isn’t rationing; I say a rose by any other name… 

Earlier this week Harry Reid tried to muscle legislation written by Debbie Stabenow (D. MI) that would spend an addition $250 billion over 10 years to boost physician reimbursement for Medicare patients.  (This was done in a separate bill so that the claim could be made that the health care legislation was “paid for.”)  This legislation was defeated, so as of today, the cuts in doctor reimbursement stand.  The stench of deception is overpowering. 

Raise taxes on everyone 

Another means of claiming that the Democrat health care legislation is “paid for” is by adding taxes for almost everyone in the U.S.  I list the Democrat tax proposals here: 

  • 10 cents per can tax on soda and other sweet drinks
  • 2% increase on income taxes for singles earning more than $200,000 per year
  • 2% increase on income taxes for families earning more than $250,000 per year
  • Employer payroll tax of 3% of the company’s health care expenses
  • Higher taxes on alcohol products
  • Increases in the Medicare payroll tax
  • A Value Added Tax of 1.5% or more on every product or service in the U.S.
  • 35% excise tax on insurance companies for “high cost plans” – more than $8,000 for individuals or $21,000 for a family 

Candidate Obama promised that anyone earning less than $250,000 a year would have even a one cent rise in their taxes; taxing the rich would pay for everything.  Well, new we see that anyone who drinks soda, or alcoholic beverages, is employed, or purchases anything (VAT) would be in for big increases in their taxes.  This is not including the special taxes Democrats have in mind for higher income people.  Nor does it include those who have great health care plans through their employer.  For those plans that cost $8,000 or more for an individual or $21,000 for any family the government will impose a 35% excise tax.  (This one tax alone would create more than $200 billion in 7 years!  There is no exemption for individuals earning less than $200,000 a year.) 

Harry Reid has arranged to exempt Nevada from this particular tax, not beginning the tax until the cost is $25,000 for a family; a couple of other states as well.  (Harry is running for his Senate seat again, and is trying to bring home the bacon meaning that health care will cost residents of other states even more.)  In addition, Union health care plans would be exempt from these added taxes.  (Remember who elected this administration.)  Now it is proposed that no government Cadillac health care plans would be subject to the 35% tax either!  So the poor get poorer and the rich get richer – if you work for the government, or are in a favored political constituency. 

Use sufficient deception 

One more observation about the current Democrat Party plan to completely alter the American landscape:  these taxes are scheduled to go into effect immediately while the health care expenditures go into effect in 2013.  We are told it is an emergency; first we had to do this in two weeks or all was lost; blah, blah, blah.  (Keep in mind that coincidently 2013 is the year following the Presidential election which Mr. Obama intends to win.  So the devastating results of the Democrat plan are delayed until after his re-election bid.)  But we know that the coverages would not take effect for another 3 years!  This permits the Democrats to give a ten year cost of $900 billion in the attempt to prove their scheme is “paid for.”  The legislation would actually permit them to raise about $250 billion BEFORE they have to spend a cent underestimating the true cost of a real 10 year expense estimate.  In addition, it isn’t a 10 year estimate; it’s a 7 year estimate – from 2010 through 2020.  Remember the expenses don’t begin until 3 years from now, so the cost is a 7 year estimate.  

Democrats say the cost of their legislation is $900 billion through 2020, but they only implement the changes in 2013 so the $900 billion estimate is really for 7 years.  The $900 billion total divided by 7 years rather than 10 means the real cost is $129 billion a year.  So over 10 years the cost is really $1.290 trillion.  Then add the $250 billion in taxes with no benefit, and the cost is $1.540 trillion over 10 years. 

Please post a reply if you can remember the last time the U.S. government made a 10 year cost estimate for anything and came in on budget.  They can’t control the cost of hammers, toilet seats, jets, fuel, cars, or anything else.  Why would any American assume they are able to estimate the cost of health care in the U.S. with any degree of accuracy? 

Consider the federal government’s track record with regard to estimating health care costs: 

  • When Congress was considering the creation of Medicare in 1965, the House Ways and Means Committee estimated that the hospital coverage (Part A) would cost a total $9 billion by the year 1990.  The actual cost in 1990 was $67 billion.  Their estimate regarding health coverage was too low by more than 700%.
  • In 1967 when Medicare was one year old, the House Ways and Means Committee estimated that both Part A and Part B would cost $12 billion in the year 1990; the real cost in 1990 was $110 billion.  They underestimated by more than 900%.
  • When Congress originally estimated the Medicare prescription benefit program in 2004, their 10 year estimate was $400 billion.  Current estimates are that upon reaching the year 2016, the real cost will be $1.2 trillion.  An underestimate of more than 300% with many years to go.  If they are off by the lowest government underestimate regarding health care – 300% – this bill  will cost $3.9 trillion over the first 10 years; if they are off by their worst underestimate – 900%, their socialistic health care plan will cost $10.8 trillion.  

The real cost of Democrat health care

But the cost will be far greater than $trillions of dollars; it will be the precipitous decline of health care quality in the United States.  Decline in quality will occur without doubt, but so will decline in delivery.  Seniors will not have adequate access to healthcare unless they are rich.  The Democrat plan for health care in the U.S. consists of denial, delay, and dilution.  For seniors to these three D’s we can add another; early death.  In addition, the cost in terms of additional deficits to pay for it, or inflation if they choose to print money, will result in personal economic collapse for millions of American citizens, persistently high unemployment as we see in the European socialist countries.  The Democrats are prepared to accept persistent unemployment of about 10%.  I know that because without adding one new spending program, our deficit is scheduled to be $23 trillion by the year 2020, just 10 years from now.  The Democrats know this, which is why today they requested to raise the federal debt limit from $12 trillion to $13 trillion; and they will have to do this again and again if we permit them to do what they want.  Currently the debt is $11.8 trillion having risen $1.4 trillion since January.

If we add more $trillions, taxes will skyrocket, the rich will flee the country and take their money with them, and the decline will occur.  Think of the tax policies of California that have driven tens of thousands of employers to other states with the result that California can’t pay it’s bills, can’t quit spending money, is tied into long-term union contracts and high wages that will drive the state into bankruptcy in order to be free of the contracts.  The same direction is being taken by our national government with the result that businesses will have to flee to other countries rather than to other states. 

If anyone reading this post thinks the new Democrat health care proposals will cost only what the Democrats say they will cost please comment and let me know why you believe that.