From the beginning, Democrats claimed stubbornly that Obamacare (the Patient Protection and Affordable Care Act) would reduce medical costs. The originally estimated $1 trillion program, which private analysts estimated would cost as much as $3 trillion, has been morphing into the kind of fiscal nightmare we have come to expect from federal programs like Medicaid and Social Security.
Centers for Medicare and Medicaid Services said yesterday that, under ObamaCare, medical care costs will eat up nearly 20% of the economy by 2019. That's a significant jump from the 16% of GDP that health care costs today. More importantly, this is just the undoubtedly rosy projection of CMMS that will end up being just another wishful thinking like the original cost estimates of nearly every big government initiative that have ended up costing 500-1000% more than originally thought.
Kathleen Sebelius, secretary of Health and Human Services, and the official in charge of implementing ObamaCare, repeated the party line. She talked about stabilizing "out-of-control health care costs" and bragged that the Democrats' bill has "the broadest package of health care cost-cutting measures in American history."
The Centers for Medicare and Medicaid Services isn't the first federal agency to contradict the Democrats' promises. In May, the Congressional Budget Office said ObamaCare would cost $115 billion more than the original estimates.
Two months earlier, just before the vote, Medicare's Office of the Actuary produced an analysis that said the bill would actually force costs higher. Sebelius sat on it. As scandalous as this was (since the bill barely passed by one vote and proper disclosure would have sunk it), hardly anyone in the main stream media opened their mouth.
Nor are the Centers for Medicare and Medicaid Services likely to be the last federal agency to show that the claims were — and still are — nonsense. ObamaCare is subject to the same law that has plagued all government programs: Projected costs are never checked, and actual costs always end up higher.
Big health reforms in Maine, Massachusetts and Tennessee have all exceeded estimates, with the Tennessee project having been effectively shut down.
At the federal level, Medicare has cost more than 10 times as much as its architects thought it would while Medicaid spending leads the league in overruns. When a special hospitals subsidy was added to the program for the poor in 1987, the thought was it would cost $100 million a year. Yet the real cost in 1992 was $11 billion a year, and it's more like $17 billion today.
What else would you expect from a piece of legislation that subsidizes irresponsible use of medical services while creating over 130 new federal offices, many of which have nothing to do with the delivery of services but rather take on issues like minorities rights. No, the real goal has been clear since the beginning: a single payer system that facilitates the socialization of American economy.
On a related note, Secretary Sebelius, adopting language and tactics more typical of tyrants, yesterday sent a public letter to the head of a health insurance industry group demanding that carriers stop "falsely blaming premium increases for 2011 on the patient protections in the Affordable Care Act," and that "that there will be zero tolerance for this type of misinformation and unjustified rate increases."
She reinforced her short-term threat with a longer-term one:
We will also keep track of insurers with a record of unjustified rate increases: those plans may be excluded from health insurance Exchanges in 2014. Simply stated, we will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections.
When Sebelius threatens exclusion from the "Exchanges," she is really saying: "Shut up and eat your costs, or you'll be out of business in a few years."
Keep in mind that three months ago (noted at NewsBusters), leaked government documents estimated that, depending on the assumption sets used, anywhere from 49%-80% of small employer health plans and 34%-64% of large employer plans would be forced financially or otherwise to "relinquish" their "grandfathered" status by 2013. This necessarily means that the market for private plans will decrease, while the market for those who would be forced to buy coverage through the "Exchanges" will necessarily expand.
What a bunch of swell guys and gals! When do the SEIU thugs show up to crack some heads at insurance companies? No disrespect to mafia intended.