October 09, 2009
How to get the CBO to say that your new entitlement is free.
  1. Make people buy the benefit themselves, and tax them if they don't
  2. Tax the provider (drug and instrument manufacturers) who will pass the costs on to the consumer
  3. Include statutory requirements to cut back subsidies to the program if it increases the deficit (knowing that subsequent legislative sessions will remove the requirement once the entitlement is firmly established)
  4. Shift costs to the states
  5. Commit to future reductions in Medicare spending growth that aren't realistic and won't be in fact implemented.
As this morning's opinion in the Wall Street Journal explains, the Senate Finance health care proposal uses all of these methods, and more. It's classic legislative obfuscation of costs that makes people think they are getting something for free, when in fact they are paying for it indirectly. I think Americans will eventually figure it out. The crucial question is when. Posted by Carter Mackley at October 09, 2009 10:15 AM | Email This
Comments
1. What the CBO scored carried as much weight as a bowl of steam.

Posted by: Gary on October 9, 2009 12:00 PM
2. hinton, didn't you hear, it's not called the "Nobel" prize any longer. They've gone all in and are now calling it the "Obama Peace Prize".

Posted by: Gary on October 9, 2009 12:10 PM
3. Huh...I don't think the CBO said the Finance Committee plan was free. I think the CBO characterization was that the plan was paid for -- something Republicans usually had a hard time with in regard to their programs.

It's weird how the right regards CBO numbers as gospel when they support right wing points -- not so much when they don't.

Posted by: scottd on October 9, 2009 01:47 PM
4.
"...something Republicans usually had a hard time with in regard to their programs. "

-

"Government spending on the Medicare drug benefit has also been lower than expected and is one of the rare federal programs to come in under budget. The program cost $40 billion in 2007, less than the projected $66 billion, the report said."

Posted by: Gary on October 9, 2009 02:04 PM
5. scottd - you just have been pwned.

Posted by: Crusader on October 9, 2009 02:20 PM
6. Gary, scottd is a leftist, which means, by definition, that he is one of those liars where facts have no impact.

Further, I apologize for my mislabeling of the joke punchline that this heretofore prestigious award USED to have... but no longer does.

Posted by: hinton on October 9, 2009 02:29 PM
7. Gary: Weird...I point out that Republicans offered entitlements without figuring out how to pay for them, and you respond with an example of a Republican-sponsored entitlement that wasn't paid for. It just added less to the deficit than was projected, but it has still contributed to the deficit. In other words, the program wasn't paid for.

Thanks for making my point.

Posted by: scottd on October 9, 2009 02:43 PM
8. Scottd,

There are several stories out today from a variety of stories on just how much Baucus is lying about his plan, and how his restrictions on the CBO's means of scoring the bill led to the "surplus".

In reality, it'll have several hundred billions in deficits over 10 years, and that does NOT include the trillions of dollars of hidden funds that are mandated to be spent by States and private citizens.

Posted by: Shanghai Dan on October 9, 2009 08:04 PM
9. ...And I'm still waiting to see John Jensen come in and denounce this bill since it still leaves 25 million without coverage, meaning we spend $829 billion to cover 11 million people for 6 years (over $1000 per month per person covered).

Posted by: Shanghai Dan on October 10, 2009 08:34 AM
10. Carter, 5. Commit to future reductions in Medicare spending growth that aren't realistic and won't be in fact implemented.

This is wrong. The Baucus bill does not contain spending growth cuts nor does it "commit" to them. What the WSJ is talking about is already statue.

Point 3 & 4 are valid. Point 3 in particular should be addressed since it's plainly stupid. But that statue wouldn't apply after the first few years as revenues grow.

Scottd is right. This bill is simply more responsible in terms of the deficit than Medicare Part D. Believe me, we'd have a lot less difficult choices to make if we just irresponsibly spent into the deficit for all eternity like Part D does. Unfortunately for the politics of it all, but fortunately for America, we actually raise enough revenue to pay for our plans. Not a single dime is added to the deficit over the next 10 years or even the next 20, according to the CBO. In fact, over both timeframes there is a reduction in the deficit.

Posted by: John Jensen on October 10, 2009 10:52 AM
11. Centrifuge John wrote:

What the WSJ is talking about is already statue.

And every year the Congress - by pressure of the progressives in Congress - has waived implementing those statutes. But you'll count them for your CBO estimate anyway, right?

And earlier this year you stated explicitly that you would NOT support any health bill that doesn't cover everyone and doesn't cut the deficit.

You support this bill from Baucus?

Posted by: Shanghai Dan on October 10, 2009 06:08 PM
12. And here's a great article on just HOW my insurance will be free. At least in 2013. And for the other years, all you people will pay for my insurance.

Seriously, why should ANYONE buy insurance? The penalty is LESS than the cost of insurance, and with the mandated "no pre-existing condition" exclusion, well, why carry insurance? I can - in 8 years from now - pay $750 for the penalty, and about $150 twice a year for doctor visits. Less than I pay today.

Yes, this kind of plan may "save the Government money" but it WILL bankrupt the insurance companies, meaning more people going to the public plan, well beyond the participation the CBO estimated.

So yes, my entitlement will be free, because if this does pass I fully intend to take advantage of this loophole to its full extent, and get everyone here to pay for my insurance (unless you're also planning to use this loophole). So thanks, especially to scottd, John Jensen, and their fellow leftists! Glad you like to pay for me...

Posted by: Shanghai Dan on October 11, 2009 08:19 AM
13. hey, dan, if it works out for you, mazel tov! But here's a few things you might want to think about:

1. That entitlement isn't exactly free. As you noted, you'll be paying $750 a year and you won't be getting anything for it. That money will probably go to lowering premiums or taxes for people like me. Thanks, dan!

2. Who said it's only going to be $750? Earlier drafts had a larger penalty. Baucus lowered it to $750 in a futile attempt to gain Republican support. Now that we know that's impossible, Democrats might wise up and raise the penalty. They'll have plenty of support from the insurance industry once they realize that reform is going to happen and they are about to get stuck with a huge moral hazard problem if they don't push for a stronger individual mandate.

3. And, dan, because I care about you, I want to point out that while you're going without insurance, you'll be exposed to the risk of catastrophic costs from accidents or sudden illness because you'll be too busy in the ER or ICU to fill out insurance applications when the hammer falls. All I can say is, I'll be glad that I'm not paying those bills.

4. Once you finally get around to applying for insurance, it might be a while before you get coverage and you'll be paying your own bills in the meantime. That can really add up and I'll be thankful you're not passing those costs on to me. At the very least, it's likely you will have to wait until the start of the following month. More likely, the insurance industry will probably adopt an open enrollment convention (like Medicare) where new members are only admitted during a few months each year. Not that that's a problem, as long as you don't mind having that newly discovered cancer eat away at you for eight months while you wait for your treatment to be covered. At least I won't be paying for the expensive tests that discovered the good news for you, nor for the expensive early phases of treatment. With any luck, you'll put off treatment and lower the ongoing costs for the rest of us along with your expected lifespan.

Posted by: scottd on October 11, 2009 11:10 AM
14. scottd,

1. For the first year, it's free (no penalty). And what do I get for paying for insurance at $100+ per month, versus the $60 per month penalty? Coverage IF something happens. Since I can sign up the very day something happens (see 3) there is nothing I gain. I save money, actually...

2. Baucus said it's so. That's the bill as put forth. Or are you saying the bill will change? Then why trumpet the CBO "scoring" of the bill if it's going to change?

3. Power of Attorney, my friend. I can have someone with power of attorney sign me up if I'm incapacitated. What a deal!

4. Per Baucus' bill, no. I cannot be excluded, and coverage starts when I apply. So at most it'll be one day (maybe) of coverage that I'd miss.

So how is this plan going to actually increase coverage and control costs? I don't see it doing either, and there are nice big loopholes for people to not participate, meaning those who do will end up paying even more (the pool won't be as big as expected).

Posted by: Shanghai Dan on October 11, 2009 01:08 PM
15. Dream on, Dan. Baucus' bill is one of several and it's part of a process -- the final result is gonna be different. If you want to fantasize over the great scam you're gonna pull in four years following the specific provisions of a bill that will be history in four weeks, be my guest. I'm not going to argue with you.

PS: I don't think Baucus' bill says coverage starts when you apply. It says you can't be excluded for pre-existing conditions. Those are two different things.

Posted by: scottd on October 11, 2009 01:55 PM
16. So why are you Slavers crowing about the CBO saying the bill is "free" if it's not done, and is just one and is a part of the process? You mean the final bill doesn't exist? Meaning the CBO estimate is meaningless?

Posted by: Shanghai Dan on October 11, 2009 02:00 PM
17. I think there is a gradient between "meaningless" and "this is the final bill." The CBO score is a good guide: it shows that there is a way to produce a revenue source that rises faster than the cost of subsidies. It shows how to create a plan that reduces the deficit. The Baucus bill will be the foundation of whatever passes, that much is clear. But the exact nuances of the plans are going to be amended specifically to prevent stupid plans like yours.

Do you understand now why debating the trivial faults of HR3200 was never too interesting to me, because I realized there was another four months of work ahead? As per usual, life is more complicated than you allow it to be.

I said I would oppose a bill that didn't significantly expand coverage or added to the deficit. This mark easily fulfills these requirements. I do hope for even more coverage expansions, sure. But getting one out of every ten Americans health insurance coverage they don't have today is a huge deal to me.

Posted by: John Jensen on October 12, 2009 01:57 PM
18. So to summarize, John:

- A bill that still doesn't have final language but a "score" you like is OK.

- A bill that leaves 25 million uninsured (meaning it covers just 5 million people) is OK.

Got it. Basically if it has a "DEMOCRAT" stamp you're happy as a clam! Enjoy, zombie...

Oh, and John?

HOPE AND CHANGE!

Posted by: Shanghai Dan on October 12, 2009 04:57 PM
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