Tuesday, June 14, 2011
Health Reform: Obamacare as a Dismal Economic Disease
Economics: The dismal science.
Thomas Carlyle (1795-1881), Latter-Day Pamphlets I
Positive economics is or can be an “objective” science.
Milton Friedman (1912 - 2006 ), Essays in Positive Economics, 1953
June 14. 2011 - Think of The health reform law as a dismal economic disease. It has signs, symptoms, and treatment. To some, its prognosis is dreadful. It is incurable, contagious, and will negatively infect the rest of the economy.
Or you can think of it contributing positively to the economic health of the nation, with more people insured, and more diseases prevented, treated, and cured.
What follows is the negative spin on the health law , with signs and symptoms of an economic disease , as seen by the authors of Why Obamacare is Wrong for America (Broadside, 2011). Its authors are Grace-Marie Turner, president of the Galen Institute; James C. Capretta, a fellow at the Ethics and Public Policy Center and former associate director of the White House Office of Management and Budget (2001-2004), Thomas Miller, resident fellow of the American Enterprise Institute; and Robert Emmet Moffitt, senior fellow at the Heritage Foundation’s Center for Policy Innovation.
Ten Signs and Symptoms of Obamacare as Dismal Economic Disease
1. Higher Costs - Americans will spend average of more than $1000 per person for a family of four if the law hadn’t passed.
2. Tax Increases - Obamacare includes $569 billion in tax increases to fund its subsidies, which will be passed through to consumers as higher drug, devices, and premium costs.
3. Seniors losing coverage and gaining costs - 7 million seniors will lose Medicare Advantage coverage; and seniors’ costs will go up $346 a year in 2011 and by as much as $923 by 2017.
4. Burgeoning bureaucracy - The health law establishes 159 new boards, advisory commissions, and programs, all of which will generate massive reams of bureaucratic red tape.
5. Higher government spending – According to Richard S. Foster, chief Medicare actuary, the health law will increase national health expenditures by $311 billion between 2010 and 2019.
6. Larger national deficits – The health law starts collecting new and higher taxes in 2010 but provides no benefits until 2014. The real cost will be $2.3 trillion for first full 10 years.
7. 23 million still uninsured – The bill will leave 23 million Americans without insurance by 2019, not even close to the promise of universal coverage.
8. Insurance death spiral - Individual mandate will require younger workers to pay higher premiums to subsidize older workers. If young choose to pay penalties rather than buy expensive premiums, costs will soar for those left in insurance pool.
9. Losing your coverage - As many as 80 million to 100 million people will have to look for different coverage to meet federal standards, despite repeated promise “you will be able to keep your health plan.”
10. Medicare provider losses - Hospitals, nursing homes, hospices,and doctors will face financial losses, impacting and lessening access to care for Medicare beneficiaries. The health law proposal cuts $575 million out of Medicare funding over the next 10 years. This means health care facilities will be forced to close, and many physicians will stop seeing Medicare patients, retire, or pursue other careers.
In short, I regret to report: Some see Obamacare as a disease dismal, its economic effects mostly negative and abysmal. Others see the health reform law as positive, with more people covered and in better health, primarily fiscal.