Lies About Health Care Reform

WASHINGTON—Democrats made a final sprint toward a weekend vote on their health-care bill, pressuring wavering lawmakers as the Congressional Budget Office put the cost of the legislation at what party leaders see as a politically palatable $940 billion over the next decade. …

On Thursday, the nonpartisan CBO said the bill would extend health insurance to 32 million Americans now without coverage, while reducing the budget deficit by $138 billion over 10 years.

Is it really possible to reduce the deficit by adding trillions of dollars in government expenditure?

 Of course not. The health care bill is really two bills: one that creates all the expenditure, and one that (allegedly) raises even more revenue via taxes, fees, and cuts in Medicare.

The first lie is that the policy changes in the two bills need to be linked; specifically, that we need the subsidies, mandates, and insurance regulation to obtain the Medicare savings.

Not true. If we have ways to make Medicare more efficient, that’s great. But we can and should do that independent of expanding subsidies or further regulation of health insurance. The Democrats have linked the issues because they know the public would never vote for expanded subsidies straight up.

That brings us to the second lie, which is that we can reduce Medicare expenses without reducing care. No one disputes that Medicare spends money on care of dubious value. But designing a better system is incredibly hard. If policymakers or economists had a solution, we would have adopted it long ago. The reality is that efficiency is impossible in a huge, complex, command and control systems.

We do have ways, of course, to reduce Medicare expenditure: a higher age of eligibility, higher co-pays and deductibles, or rationing.

The first two changes are good ideas and will reduce expenditure, but by reducing the amount of care. Rationing is more problematic, although it might be better than the status quo; regardless, it reduces expenditure by reducing care.

It is incomprehensible to me that anyone can support a bill whose supporters claim it reduces the deficit by spending trillions of dollars. The fact that people say this with a straight faces merely convinces me not to trust them.

Are we really going to adopt this insanity?

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