Awesome cite, Smashy. Let’s work through it.
- “Estimating the effects of major changes tothe health care and health insurance systems over the next 10 years is very difficult and involves substantial uncertainty; generating longer-term estimates is even more challenging and is fraught with even greater uncertainty. As a result, CBO does not provide formal cost estimates beyond the 10-year budget window.”
That’s what was bothering me about the Reason link: I knew that budget estimates 10 years out were highly qualified. The speechwriter’s chart really didn’t capture that.
But now we can move towards the substance:
2. “The starting point for such an analysis of the recent House proposal is our estimate of the proposal’s impact on the federal budget deficit in the first 10 years. As discussed in CBO’s letter of July 17, we estimate that the proposal as a whole would increase federal deficits by $239 billion over the 2010–2019 period.”
Ok, for the first 10 years, we will add $24 billion per year to the deficit – that’s something we can afford (even though it’s tilted towards the later part of the period). After all, the US economy is about $13 trillion+ and we can reasonably expect it to grow. (Incidentally, thank congress for extending their budgetary horizons out for 10 years – they used to have much shorter ones. Obviously the practice doesn’t end gaming: it just limits its scope.)
Ok, but what about long run prospects?
3. “In sum,relative to current law, the proposal would probably generate substantial increases in federal budget deficits during the decade beyond the current 10-year budget window.”
We’re here to fight ignorance and we have to face facts: we are facing budgetary shortfalls down the road. Put into perspective, they are less than that of the Bush tax cuts, apparently, never mind the Iraq war. But they are there.
Against that, what are the pluses?
15,000-45,000 die each year due to lack of health insurance, depending upon the study.
Moreover, the share that US spends on health care is the highest among all advanced countries, while our life expectancy is only middling. A good part of the reason for that is that massive amounts in the US are devoted to getting somebody else to pay the bill. Community rating provisions in this health care legislation could take a substantial bite out of this problem. In a sense, the existing comparative inefficiencies in US health care have a silver lining: they imply that there is scope for cost control. Interesting qualification:“The main question,” [Rick Kronick of UC San Diego] said, “is why are health care costs going up at 2.4 percent a year faster than GDP? And most of the answers to that question have nothing to do with administrative costs. The answers are that we do more stuff and have more technology. Even if we could wring administrative savings out of the system, which I’m all in favor of and would be a good thing, we’d still be facing the question of how to slow the rate of cost growth.”
Health care is ~1/6 of the US economy. For all the naysaying about big guv, private health care costs are growing somewhat faster than public health care costs. Cite. So let’s not compare current proposals to some magically perfect world: there are massive inefficiencies in the status quo which need to be addressed over the coming decade.
