Friday, October 09, 2009

CBO's Obamacare costs are way too low

But we knew that already, didn't we?

ALG has some details


"CBO estimates on average that the total cost per individual per year will only be about $2,858—the cost of providing subsidized care to 29 million at a price of $829 billion. The problem is: the average cost of a premium in the United States is $4,700. Either the government plans on expanding coverage by providing below-average, substandard care -- or the cost estimate is grossly understated.

....Currently, only 80.5 million now receive their health care from the government. That means the Senate plan could expand government-run health care to 45 million additional people. The cost? At an average of $4,700 per premium, that would cost an additional $2.1 trillion over ten-years once fully implemented.

Which, of course, is unsustainable. That is why, over time, the quality of care would have to be watered down—i.e. rationed. Not even the tax increases of $406 billion that the bill proposes would be able to pay for it.

Therefore, the real problem with government-run health care, and all government entitlements, is its future burden to taxpayers and yet-unborn generations. Such programs are simply unsustainable. By 2020, according the Medicare and Social Security Trustees Reports, in addition to payroll taxes and premiums, Medicare and Social Security combined will also require an extra 27 percent of federal revenue. By 2030, the programs will need 49 percent of taxes to stay afloat. By 2040, 61 percent. In total, through the century these entitlements constitute some $107 trillion in unfunded liabilities."

Mark Perry examines the historical perspective of government health care cost overruns:
"Bottom Line: If history serves as an accurate guide for the actual cost of the current healthcare bill, we should be prepared for a ten-year cost of closer to $1.6 trillion, double the current estimate of $829 billion, and maybe even much higher.
One other thing: Those of you who expect that your health care costs will become less expensive or even free if Ombamacare manages to get enacted are in for a rude awakening.

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