CBO testimony on Health Care

[Kelly the Dog]

The actual testimony of the CBO chief on Thursday that has been in the news the last few days was a real eye opener, although a lot of the general stuff we have heard about the debt being unsustainable in the future is familiar. In a nutshell, to me, it's both way worse and a lot better than I thought.

 

http://www.senate.gov/fplayers/CommPlayer/...1609&st=960

 

The surprising thing to me can be heard 32 minutes into this recording when the CBO chief says that ALL of the government programs and spending we are doing now, including the military, are at or below the levels as a share of GDP we have seen in the last several decades. And virtually ALL of the problems with the debt and deficit are due to Medicaid and Medicare and its projections, with a smaller piece being Social Security.

 

He did seem to think there are ways to combat the Medicare/Medicaid problem but they obviously need to be addressed. And that is the reason that his projections for the Health Care bills he has looked at do not save money, because they do not fundamentally change the two entitlements.

 

If I heard him right, and I think I did, the Health Care plans could all change in about one minute, if the Congress and the President agree to two things that so far they've been reluctant to do. One is tax health care benefits, and the other is change the way doctors get paid in Medicare. Those two things alone would dramatically alter his projections.

 

Frankly, I don't know why Obama is against taxing benefits over a certain amount of money. Originally he was against it because he didn't want to raise the taxes of the middle class. But now there is a different tact being floated around with a cutoff point at, perhaps, $20,000 a year. In other words, if your Health Care plan from your employer is worth 20K or less per year, you pay nothing. Anything above 20K, you pay income tax on that amount above. This alone, which the Republicans are pressing hard for especially in the Senate, would dramatically lower the cost. I don't know why Obama won't agree to it but I have read that he is leaning closer to agreeing to it.

 

There are also a lot of different ways to lower the cost, many of them were mentioned by both sides in this hearing.

[VOR]

Think about this for a second. Medicare and Medicaid are uinsustainable. Yet the government wants to, in effect, extend these programs to another 50M people, and that this will somehow work? And the answer is to cut payments to doctors, 40% of whom are not accepting Medicare these days?

 

Again, raising the retirement age to 70 would solve problems related to Medicare and Social Security. Both were created when few people lived beyond 65 years of age. Now most people are, and living healthier. Doing that wouldn't take over 1,000 pages and lead to even bigger problems.

[Wacka]

Want to make make money? Become a counselor. All those people over 65 will have to be counseled on how to accept being made into Soylent Green. Lot's of work.

[bills_fan]

The surprising thing to me can be heard 32 minutes into this recording when the CBO chief says that ALL of the government programs and spending we are doing now, including the military, are at or below the levels as a share of GDP we have seen in the last several decades. And virtually ALL of the problems with the debt and deficit are due to Medicaid and Medicare and its projections, with a smaller piece being Social Security.

 

OK, but now lets figure that the entire last decade of GDP growth has been debt-fueled spending, in effect pulling forward into today future demand. And now lets estimate that GDP is in the process of suffering a 25-30% contraction across the board in order to reset to a sustainable level (note: the 25-30% is the amount, year-over-year, that revenues are dropping for each company that is currently reporting earnings; I expect this to continue). Now, if the gov't spending was lower than it has been in decades as a % of GDP, and that GDP number was 25-30% lower (where it should have been, absent the too-easy-credit-binge of the last decade), then what is the number?

 

I have no idea, but be very suspicious of anyone using 2006-2008 GDP to base anything off, the number was grossly inflated.

[Dwight Drane]

Want to make make money? Become a counselor. All those people over 65 will have to be counseled on how to accept being made into Soylent Green. Lot's of work.

 

Yeah...but only every 5 years!

 

I was thinking more along the line of funeral director. Or maybe buy some stock in whomever makes those nice creamatorium furnaces.

[Kelly the Dog]

OK, but now lets figure that the entire last decade of GDP growth has been debt-fueled spending, in effect pulling forward into today future demand. And now lets estimate that GDP is in the process of suffering a 25-30% contraction across the board in order to reset to a sustainable level (note: the 25-30% is the amount, year-over-year, that revenues are dropping for each company that is currently reporting earnings; I expect this to continue). Now, if the gov't spending was lower than it has been in decades as a % of GDP, and that GDP number was 25-30% lower (where it should have been, absent the too-easy-credit-binge of the last decade), then what is the number?

 

I have no idea, but be very suspicious of anyone using 2006-2008 GDP to base anything off, the number was grossly inflated.

 

Maybe I am misunderstanding you, but the CBO chief was talking about the last several decades of GDP, as well as projections into the next several decades of the future. Why would the distorted #s of 2006-2008 affect those numbers all that much?

[VOR]

Solution? Kill off the sick and old.

[finknottle]

If I heard him right, and I think I did, the Health Care plans could all change in about one minute, if the Congress and the President agree to two things that so far they've been reluctant to do. One is tax health care benefits, and the other is change the way doctors get paid in Medicare. Those two things alone would dramatically alter his projections.

 

Wow - free money!

 

Look, all the regulatory fiddling in the world won't change the simple fact that if we are to move 50 million from the uninsured to the insured, we need to come up with about $200 billion a year. Every year. There is nothing magical about that number, it is simply 50 million times $4,000.

 

You can put that number into whatever framework resonates with you: 1/3 of the total defense and intelligence budgets (less the wars in Iraq and Afghanistan), a budget the size of Medicaid, or the sum of the budgets of the Dept's of Energy, HUD, DHS, NASA, the NSF, State, and other international spending.

 

You can make the uninsured pay for their insurance themselves, or you can take it from the rich and out-voted. But $200 billion is a staggering outlay that won't vanish through hand-waving. Taking it through taxes is going to have an undeniable impact on our economy.

[VOR]

Wow - free money!

 

Look, all the regulatory fiddling in the world won't change the simple fact that if we are to move 50 million from the uninsured to the insured, we need to come up with about $200 billion a year. Every year. There is nothing magical about that number, it is simply 50 million times $4,000.

 

You can put that number into whatever framework resonates with you: 1/3 of the total defense and intelligence budgets (less the wars in Iraq and Afghanistan), a budget the size of Medicaid, or the sum of the budgets of the Dept's of Energy, HUD, DHS, NASA, the NSF, State, and other international spending.

 

You can make the uninsured pay for their insurance themselves, or you can take it from the rich and out-voted. But $200 billion is a staggering outlay that won't vanish through hand-waving. Taking it through taxes is going to have an undeniable impact on our economy.

That's just it. It's all funny/Monopoly money. "Just take it from the taxpayers" says Mr. or Mrs. uninsured, and the Dems.

 

And to make matters worse, it won't be just 50M being insured. With the (laughable) $750/year/worker penalty to company owners for failing to provide health insurance (which costs tens of thousands of dollars per worker/year), more company owners will take the "penalty" and have their workers take the government option. Basically just the richest 10-15% (for argument's sake, we'll say about 50M) will have private insurance while the remaining 250M will be supported by the taxpayers. And if the (woefully underestimated) projection for covering 50M is $1T...