ObamaCare's Real Price Tag

In a 2002 fact sheet, the Agency for Healthcare Research and Quality (or AHRQ, a division of the U.S. Department of Health and Human Services) reported:

The United States spends a larger share of its gross domestic product (GDP) on health care than any other major industrialized country. Expenditures for health care represent nearly one-seventh of the Nation's GDP, and they continue to be one of the fastest growing components of the Federal budget. In 1960, for example, health care expenditures accounted for about 5 percent of the GDP; by 2000, that figure had grown to more than 13 percent. [Italics added.]

In February 2010, the New York Times reported:

With the health care tab for last year coming to $2.5 trillion, health care spending now represents 17.3 percent of the nation's gross domestic product -- a 1.1 percent bigger portion of the nation's economy than in 2008. This represents the biggest one-year expansion of health care's share of the economy since the federal government began keeping records in 1960.

So in seven years health care had gone from less than one-seventh of the economy to well over one-sixth. In 2011, a year after the passage of the Affordable Care Act (ACA, aka ObamaCare), Bloomberg reported: "Health-care spending will make up 20 percent of the U.S. gross domestic product by the end of the decade." (For those of you still "occupying" Wall Street, 20 percent is one-fifth.)

On March 13 of 2012, the CBO reported that the price tag for the ACA would be much higher than had been advertised. At the Washington Examiner, Philip Klein reported:

President Obama's national health care law will cost $1.76 trillion over a decade, according to a new projection released today by the Congressional Budget Office, rather than the $940 billion forecast when it was signed into law. Democrats employed many accounting tricks when they were pushing through the national health care legislation, the most egregious of which was to delay full implementation of the law until 2014, so it would appear cheaper under the CBO's standard ten-year budget window.

The next day NewsMax reported:

Healthcare expert Betsy McCaughey [said] that the original cost projections of the plan were "a shell game" and that the new report "inches closer to the truth" about the cost of the reforms. ... She said the consulting company McKinsey estimated that half of all employers who know about the costs of the law plan to drop health coverage.

What working Americans wanted from health care reform was relief from ever-escalating prices -- their soaring medical bills and insurance premiums. What they got was ObamaCare.

But controlling costs was never the aim of the Democrats' health care reform. If it had been, Congress would have required insurance companies to offer options, such as inexpensive "catastrophic" policies, to pump a little competition into the market. On April 7, E. Thomas McClanahan at the Kansas City Star reported:

The pollster Scott Rasmussen notes that 76 percent think they should be allowed to choose between high-cost insurance plans with low deductibles, and low-cost plans with high deductibles. They want a choice between costly plans that cover everything, and affordable plans that cover less.

None of those choices is available under Obamacare.

An even higher proportion -- 81 percent -- say that if a company offers health insurance, workers should be able to "cash out" that benefit and use the money to buy a policy on their own -- and keep the difference if it costs less.

Consider the effect of such a step. Workers who chose economical policies would get a raise. Insurance companies would have to scramble to provide more choices and better value, or lose business in the suddenly broadened individual market. Why can't people have this option? Why can't we have an approach that encourages real competition?

Part of the reason that health insurance in America is so expensive is because Medicare and Medicaid don't fully pay their bills, which results in cost-shifting to other payers, such as insurance companies. The rampant fraud in those public programs costs tens of billions each year, as well. Congress also didn't fund EMTALA, which mandated that emergency rooms treat the uninsured, resulting in yet more cost-shifts.

ObamaCare just makes the system's "pre-existing conditions" all the worse. A free market can only work if there is choice. But if everyone is commanded to enter the market and buy a single one-size-fits-all product, then there is no market. (Some might contend that the market for health insurance was subverted in 1945 with the McCarran-Ferguson Act, which gave an antitrust exemption to the insurance industry. For the other side, click here and here and here.)

On April 10, the Mercatus Center published the most-recent upward revision for ObamaCare's true price tag, and it was written by a Medicare trustee, Charles Blahous. The study garnered immediate howls of disapproval from the usual suspects, but Blahous deftly rebutted his critics on April 11 at Forbes.

When asked on ABC News if he would favor a tax rate hike even if it meant less tax revenue, President Obama replied that he would -- "for purposes of fairness." So it is with ObamaCare, affordability was never the goal. But then neither was "fairness." Consolidation of power and control in the central government was the Democrats' goal all along -- and at any price.

Jon N. Hall is a programmer/analyst from Kansas City.

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