The Real Cost of Obama Healthcare = $4 Trillion Over Ten Years

The media has widely reported that the cost of President Obama's takeover of healthcare tops $1 trillion over ten years. However, Dr. Stephen T. Parente of the University of Minnesota and the HSI Network testified before Congress this week and pegs the true number at $ 4 Trillion Dollars over a ten year period. This number was derived using a model developed by the Department of Health and Human Services. Consider this, our entire budget for FY 2010 is $3.6 Trillion. Ladies and Gentlemen, there is no way we can afford this left wing socialized takeover of the finest healthcare system the world has ever known.

From The Lid blog:

• Our early assessment of the Senate Finance committee proposal shows a 74% reduction in the uninsured with a 10 year cost  2.7 trillionusing public option plan modeled after the Massachusetts Connector. We also modeled an FEHBP version of the public plan and got a cost of over 1.3 trillion, but with a 30% reduction in the uninsured.

• CBO scored the Kennedy Bill last week at approximately a 30% reduction [of uninsured people]for 1 trillion over ten years. Using the ARCOLA model, we found nearly everyone would be covered if all elements of the Kennedy bill were enacted at a ten year cost of 4 trillion. At this time, we are the only group yet to score the full Kennedy proposal. (If you would like to see the full analysis of this bill including how they got to their budget numbers) 

The full analysis concludes:

The plan lowers the uninsured significantly, to less than 1% of the population, but not without a cost of over four trillion dollars over 10 years. There are no provisions in the legislation to offset this course. Even if the most generous estimate of the employer sponsored tax exclusion ($300 billion per year, including collecting FICA contributions from employers) where used and combined with fraud estimates and block granting all of Medicaid (acute and long term care2), this would be a challenging proposal to finance with budget neutrality. Finally, the public plans will be quite successful in recruiting large numbers of Americans. They will also likely crowd out at 79 million individual
contracts with existing private insurers.

Separately, Parente analyzed the house version of the plan:

• The plan lowers the uninsured significantly, to less than 3% of the population, but not
  without a cost of nearly $3.5 trillion dollars over 10 years. There are no provisions in the legislation to offset this course. Even if the most generous estimate of the employer sponsored tax exclusion ($300 billion per year, including collecting FICA contributions from employers) were used and combined with fraud estimates and block granting all of Medicaid (acute and long term care2), this would be a challenging proposal to finance with budget neutrality. Finally, the public plans will be quite successful in recruiting large numbers of Americans. They will also likely crowd out 64 million individual contracts with existing private insurers.

Comments

[Dom]

Here's an interesting article. Had me steaming:

http://www.weeklystandard.com/Content/Public/Articles/000/000/016/659dkrod.asp