Democrats in Congress have let us know they will do whatever it takes to ram through their national health care agenda. The big question is whether enough republicans will go along for the sake of “compromise.” If they do, when things go bad (which they surely will) the democrats can deflect blame by saying it was bipartisan.
The squishes, like Olympia Snowe and Susan Collins, should keep history in mind during negotiations on this issue. The Wall Street Journal took a look at what has happened in the past, and the actual costs versus the projected costs, when government has gotten involved in health care. It’s pretty ugly.
When Medicare was created in 1965, benefits were relatively limited and retirees paid a substantial percentage of the costs of their own care. But the clout of retirees has always led to expanding benefits for seniors while raising taxes on younger workers.
In 1965, Congressional actuaries expected Medicare to cost $3.1 billion by 1970. In 1969, that estimate was revised to $5 billion, and it actually came in at $6.8 billion. That same year, the Senate Finance Committee declared a Medicare cost emergency. In 1979, Jimmy Carter proposed limiting benefits, only to have the bill killed by fellow Democrats. Things have gotten worse since, and Medicare today costs $455 billion and rising.
Medicaid was intended as a last resort for the poor but now covers one-third of all long-term care expenses in the U.S. — that is, it has become a middle-class subsidy for aging parents of the Baby Boomers. Its annual bill is $227 billion, and so far this fiscal year is rising by 17%.
Schip was pitched a decade ago as a safety net for poor kids, and some Republicans helped sell it as a free-market reform. But Schip is now open to families that earn up to 300% of the poverty level, or $63,081 for a family of four. In New York, you can qualify at 400% of poverty.
Any new federal health plan will inevitably follow the same trajectory, no matter how much Republican Senators might claim they’ve guaranteed otherwise. The Lewin Group consultants estimate that 119 million people who now have private insurance could potentially be captured by the government under the Obama public option. This is on top of the 90 million already in Medicare or Medicaid. This would guarantee a spending explosion that would over time lift federal outlays as a share of GDP into the upper 20% range or higher. Republicans would spend the rest of their days deciding whether to vote for tax increases to finance this, or stand accused of denying health care to the middle class.
Republicans would be wise to heed the warning before it’s too late.
I guess the answer to the squishy repubs is to either a) pressure them to not take part in socialized health care via grassroots efforts or b) hope that they go the way of the dodo, I mean Specter….
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