Obama Health-Care Plan Would Drive Up Inflation and Health-Care Costs, Shrink Economy, and Reinforce Worst Features of Status Quo
ObamaCare would shrink the economy, drive up health-care costs and inflation, and increase the deficit, notes David Kopel, a “lifelong Democrat.” Kopel provides “Economic projections of the consequences of Obamacare” drawn from a study “from the Independent Institute” on “the national and Colorado consequences of Obama care, based on” its “one trillion dollar increase in health care subsidies over the next decade. These consequences include:
Overall, total federal expenditures will be 5.6 percent higher than otherwise by 2019, adding $285.6 billion to the federal deficit in 2019.
An increase in national health care expenditures by an additional 8.9 percent by 2019.
An increase in medical price inflation by 5.2 percent above what it would have been otherwise by 2019.
Reduce U.S. economic growth in 2019 compared to the baseline scenario by 4.9 percent for the nation as a whole and 4.3 percent in Colorado.
Higher medical inflation and overall expenditures will ultimately lead to government expenditures that exceed the $1.0 trillion in expenditures on health subsidies. The net present value of all additional federal government expenditures through 2019 that will occur as a result of a federal health care reform is $1.2 trillion, or a $3,900 bill for every man, woman, and child in the U.S.
Despite the additional $1 trillion in expected health care subsidies by the government, 30 million people would remain uninsured. The cost to reduce the number of uninsured by 16 million people is $62,500 in subsidy expenditures per person insured.”
ObamaCare will increase, rather than reduce, health care costs for many reasons. As Shikha Dalmia explains, one of those reasons is that it does nothing about the main drivers of high health-care costs, like the fact that doctor salaries are much higher than in other countries — physician’s pay is twice as high in the U.S. as in Europe. This is the product of arbitrary government limits on who can practice medicine.
A doctor shortage is looming, but the AMA has successfully lobbied Congress to artificially restrict the number of doctors in America, through measures such as limits on the number of federally-funded residencies. Thanks to arbitrary AMA requirements, medical education is a much most costly and wasteful process in the U.S. than in other countries. And there are lots of unnecessary restrictions on who can become a doctor (like barring immigrant doctors who have practiced for years unless they redo their residencies all over again in the U.S.), and arbitrary limits on qualified non-doctors providing health care (like bans on midwives in many states, even though they can competently handle most childbirths quite cheaply).
ObamaCare also does nothing about the enormous cost of malpractice lawsuits, ignoring the advice of both Republicans and moderate Democrats like former Senator Bill Bradley (D-NJ). The status quo of having malpractice claims ruled on by unguided juries that don’t understand medicine — rather than specialized tribunals that do — is harmful to everyone but trial lawyers. Doctors and their insurers end up paying off meritless malpractice claims, which result in doctors ordering lots of unnecessary and costly tests to avoid getting sued (so-called defensive medicine). And patients who really were injured as a result of doctors’ negligence sometimes get no compensation at all due to jury error or inability to afford massive legal fees. But ObamaCare leaves this harmful status quo entirely intact.
That’s not the only thing wrong with ObamaCare. Washington Post columnists and others have noted that ObamaCare would worsen the worst features of the status quo.
ObamaCare is full of special-interest giveaways and constitutionally-dubious provisions like racial preferences and set-asides, which has led to ObamaCare being criticized by the U.S. Commission on Civil Rights.
Obama’s own advisors have called into question his claims about how ObamaCare will supposedly let you keep your health coverage while cutting costs. “ObamaCare is all about rationing,” says Obama adviser Martin Feldstein. Feldstein earlier noted that Obama’s health-care plan would harm people with insurance, and massively raise taxes.
Feldstein, a Harvard professor, warns that “For the 85 percent of Americans who already have health insurance, the Obama health plan is bad news. It means higher taxes, less health care and no protection if they lose their current insurance because of unemployment or early retirement.” Obama’s plan would “cost more than $1 trillion,” and raise the top federal “income-tax rate from 35 percent today to more than 45 percent,” he notes.
Fact-checkers say Obama is lying about health-care.
ObamaCare is likely to be a costly boondoggle like his stimulus package, which the Congressional Budget Office predicts will shrink the economy “in the long run,” and which funds waste like a $15 million border-crossing facility for a deserted area on the Canadian border that only 3 people cross per day.