Hollow Ring

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A few thoughts on the Patient Protection and Affordable Care Act, a.k.a. Obamacare. I can’t resist kicking a bad law when it’s down. Even the federal government predicts that the unpopular law will add to the average American’s annual healthcare expenses. According to a report from Medicare’s Office of the Actuary, released in September, Americans will spend an average of $13,652 per person per year on healthcare in 2019. Without Obamacare in place, they would spend $13,387. (At present, Americans spend $8,389 per person per year.) The difference is slight, but it’s significant. The Feds are moving away from Obama’s talk of “bending the cost curve down.” And his promise that the law would pay for itself seems . . . unlikely to be true. The Medicare actuaries also predict that healthcare spending will account for nearly 20% of the U.S. economy in 2019, up from 17%, currently. So the description of healthcare as “one-sixth of the economy” will have to be changed to “onefifth.” The study also made two other noteworthy points: 1. Government is becoming the dominant player in healthcare even without the unpopular law. Federal, state, and local government spending will overtake private sources in 2011, three years before the main provisions of Obamacare take effect. 2. Two federal-state programs, Medicaid and children’s health insurance (known as CHIP or S-CHIP in most states), will grow dramatically under Obamacare. Enrollment will jump 34% between 2013 and 2014, to more than 85 million people. And these increases are likely to start even sooner, as private-sector insurance companies stop offering child-only policies. White House health reform director Nancy-Ann DeParle was Obama’s point person on spinning these troubling numbers. DeParle acknowledged that spending would rise in the short run as uninsured people get government-subsidized coverage but insisted that the rate of growth would slow in the second half of the coming decade. Then she offered projections from a different agency, the Congressional Budget Office, that suggested some slight savings would occur instead. Former CBO director Douglas Holtz-Eakin has done a lot of work explaining that CBO numbers should be taken with a grain of salt. Or several. Most critical of the many points he makes: CBO projections must assume that the policy goals of a bill or law will occur as stated. So, when Obamacare promises to make drastic cuts in certain pricey programs several years out, the CBO must assume those cuts in its projections — even if everyone agrees they’re unlikely to take place. As Holtz-Eakin has said, “I like to think of this as CBO being in the position of pricing Congressional fantasies and precluded from pointing out reality.” Statists like that. Obama has been yabbering about CBO projections of unlikely savings all year. In a media op last spring, he said, “That [CBO projection] makes this legislation the most significant effort to reduce deficits since the Balanced Budget Act in the 1990s. This is but one virtue of a reform that will bring new accountability to the insurance industry and greater economic security for all Americans.” This is a hollow man talking. For hollow men, convenient delusion always trumps inconvenient, er, truth.

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