Samuelson does an excellent job at hitting on both the economic and political realities of this health care effort, as opposed to the claims made by supporters.
For example, Samuelson notes the following:
• Their far-reaching overhaul of the health-care system -- which Congress is halfway toward enacting -- would almost certainly make matters worse. It would create new, open-ended medical entitlements that threaten higher deficits and would do little to suppress surging health costs. The disconnect between what President Obama says and what he's doing is so glaring that most people could not abide it. The president, his advisers and allies have no trouble. But reconciling blatantly contradictory objectives requires them to engage in willful self-deception, public dishonesty, or both.
• Obama's top economic advisers assert that the present proposals would slow the growth of overall national health spending. Outside studies disagree. Three studies (two by the consulting firm the Lewin Group for the Peterson Foundation and one by the Centers for Medicare & Medicaid Services, a federal agency) conclude that various congressional plans would increase national health spending compared with the effect of no legislation. The studies variously estimate that the extra spending, over the next decade, would be $750 billion, $525 billion and $114 billion. The reasoning: Greater use of the health-care system by the newly insured would overwhelm cost-saving measures (bundled payments, comparative effectiveness research, tort reform), which are either weak or experimental. Though these estimates could prove wrong, they are more plausible than the administration's self-serving claims.
Indeed, any serious consideration of health care plans featuring more government regulations, mandates, spending and taxes must come to the conclusion that health care costs will rise substantially. It’s simple economics, no matter what the Obama administration might claim. Those costs, though, will take on varying shapes, including more taxpayer dollars spent, increased private-sector costs, reduced access to quality care and treatments, less investment and innovation, and/or more.
Small businesses today face large annual increases in the cost of health care coverage. That only promises to get worse with these big government health care schemes, due to reduced choices in the marketplace, higher taxes (such as income tax rates and “play or pay” penalties), and mandates and regulations driving up insurance costs.
Samuelson correctly concludes that this is not reform, it’s malpractice.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
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