Charles Krauthammer applies his usual sharp analysis to President Obama and the Democrat's main problem with ObamaCare. Health care reform was initially pitched as necessary to keep out-of-control costs from bankrupting the Treasury and wrecking the U.S. economy. Now, we all know ObamaCare will increase costs and the deficit. Krauthammer explains the 'nuts and bolts' of why Obama's plan won't save money (excerpt below). Democrats are scrambling to redefine health care reform as insurance reform. The problem with this approach is most Americans already have health care insurance. There is certainly empathy among those who currently have insurance for those who don't. However, most Americans are suffering from the economic downturn and don't want to pay higher taxes or higher prices. Americans who are currently paying for their health care don't want to have to pay health care costs for the estimated 40 million uninsured. Even if tax increases didn't affect the middle class, most consumers are smart enough to realize covering pre-existing conditions and greatly increasing preventative care will raise everyone's rates. Also, forcing companies to buy insurance for their employees will increase costs that eventually have to be passed to consumers. President Obama and the Democrats have tried to convince Americans that health care reform will allow more people to be covered at a reduced cost. Americans are buying this deception.
From the Washington Post:
In the 48 hours of June 15-16, President Obama lost the health-care debate. First, a letter from the Congressional Budget Office to Sen. Edward Kennedy reported that his health committee's reform bill would add $1 trillion in debt over the next decade. Then the CBO reported that the other Senate bill, being written by the Finance Committee, would add $1.6 trillion. The central contradiction of Obamacare was fatally exposed: From his first address to Congress, Obama insisted on the dire need for restructuring the health-care system because out-of-control costs were bankrupting the Treasury and wrecking the U.S. economy -- yet the Democrats' plans would make the problem worse.
Accordingly, Democrats have trotted out various tax proposals to close the gap. Obama's idea of limits on charitable and mortgage-interest deductions went nowhere. As did the House's income tax surcharge on millionaires. And Obama dare not tax employer-provided health insurance because of his campaign pledge of no middle-class tax hikes.
Desperation time. What do you do? Sprinkle fairy dust on every health-care plan, and present your deus ex machina: prevention.
Free mammograms and diabetes tests and checkups for all, promise Democratic leaders Nancy Pelosi and Steny Hoyer, writing in USA Today. Prevention, they assure us, will not just make us healthier, it also "will save money."
Obama followed suit in his Tuesday New Hampshire town hall, touting prevention as amazingly dual-purpose: "It saves lives. It also saves money."
Reform proponents repeat this like a mantra. Because it seems so intuitive, it has become conventional wisdom. But like most conventional wisdom, it is wrong. Overall, preventive care increases medical costs.
This inconvenient truth comes, once again, from the CBO. In an Aug. 7 letter to Rep. Nathan Deal, CBO Director Doug Elmendorf writes: "Researchers who have examined the effects of preventive care generally find that the added costs of widespread use of preventive services tend to exceed the savings from averted illness."
How can that be? If you prevent somebody from getting a heart attack, aren't you necessarily saving money? The fallacy here is confusing the individual with society. For the individual, catching something early generally reduces later spending for that condition. But, explains Elmendorf, we don't know in advance which patients are going to develop costly illnesses. To avert one case, "it is usually necessary to provide preventive care to many patients, most of whom would not have suffered that illness anyway." And this costs society money that would not have been spent otherwise.
Think of it this way. Assume that a screening test for disease X costs $500 and finding it early averts $10,000 of costly treatment at a later stage. Are you saving money? Well, if one in 10 of those who are screened tests positive, society is saving $5,000. But if only one in 100 would get that disease, society is shelling out $40,000 more than it would without the preventive care. More here.
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