“HHS: ObamaCare Would Make Costs Go Up”

From Hot Air.com,

Does the official HHS website include their latest study of ObamaCare along with their propaganda linksNot so far, but the AP picked up on the new analysis, which shows that far from containing costs, the proposals for health-care reform on Capitol Hill will actually increase costs, thanks to an entirely predictable response from people with new health insurance:

The nation’s medical costs will keep spiraling upward even faster than they are now under Democratic legislation pending in the House, a report from government economic experts concluded Wednesday.

Republicans said the report is a warning sign that health care legislation is likely to fall short of President Barack Obama’s goal of “bending the cost curve” by slowing torrid rates of medical inflation. …

Unlike previous estimates that have focused mainly on the legislation’s impact on the federal deficit, the actuaries’ report looked at total costs, public and private, over the next 10 years. It found that the nation’s health care tab would increase somewhat more rapidly with the legislation than if nothing is done. The main reason: Newly insured people will seek medical care.

The nation’s health care tab, now at about $2.5 trillion annually, is projected to approach $4.7 trillion in 2019 without the legislation.

With the legislation, national health care spending would be nearly $4.8 trillion in 2019.

This should surprise no one who looks at the actual cost problem in American health care.  It comes from a lack of price transparency, thanks to an irrational system which has most of the costs paid through third parties. Consumers overuse the system and choose inefficient, expensive options for care because they have no idea of the costs, and providers locked into compensation schedules have little incentive to compete and to innovate.  As a result, costs go up as demand increases irrationally, and producers don’t get rewarded for efficiency and excellence.

The ObamaCare model would make this problem exponentially worse by locking everyone into this faulty model.  The HHS probably underestimates the increased demand that will result from imposing comprehensive plans on everyone in the country.  Those who forgo health insurance to pay retail actually help the industry and reduce their costs of care in the short term, although they leave themselves vulnerable for catastrophic events.

The proper route for reform would remove pricing opacity and rely on consumers to make rational choices on health care.  That would allow providers in clinics and hospitals to compete for consumers and get rewarded for excellence and efficiency.  Those efforts would not only drive costs downward, but would also encourage more providers to enter the market to meet the demand.  A combination of health-savings accounts with a move away from comprehensive insurance to catastrophic coverage would not only better serve Americans but would result in a massive boost to the health-care industry.

In the meantime, we should ask why the administration doesn’t pay attention to its own analysis.  Perhaps it’s because the ObamaCare push has always been about ideology over rational policy.

Published in: on October 23, 2009 at 2:24 am  Leave a Comment  

“Obama Pay Czar Driving Execs to Go Galt?”

From The Foundry blog at the Heritage Foundation,

At Marginal Revolution George Mason University economics professor Alex Tabarrok comments on Obama administration’s pay czar Kenneth Feinberg’s decision to cut bailed out firm executive pay by an average of about 90 percent from last year:

There is no way this will work as advertised. If the administration actually follows through, most of these executives will quit and get higher paying jobs elsewhere. Executives not directly affected by the pay cuts will also quit when they see their prospects for future salary gains have been cut. Chaos will be created at these firms as top people leave in droves. Will the administration then order people back to work?

End TARP. End the Obama Czar State.

Published in: on October 23, 2009 at 2:14 am  Leave a Comment  

White House vs. FoxNews Gets Uglier

From Hot Air.com,

Decide for yourself what the most disgraceful aspect of this is. Was it the fact that Gibbs told Jake Tapper explicitly on Monday that the White House wouldn’t try to dictate to the press pool who should and shouldn’t be included — before doing precisely that? Was it Anita Dunn going out of her way to say she respects Major Garrett as a fair reporter — before the administration decided he didn’t deserve a crack here at Feinberg? Or was it the repeated insistence by Dunn and Axelrod that of course the administration will make its officials available to Fox — before pulling the plug today?

The other networks deserve the praise they’re getting for standing up to the Baby-in-Chief, but if they had acquiesced in this freezeout, a precedent would have been set that would have been eagerly used by future Republican presidents to close them off too. And don’t think they weren’t all keenly aware of it.


Published in: on October 23, 2009 at 2:07 am  Leave a Comment  

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Published in: on October 23, 2009 at 1:53 am  Leave a Comment  

I Gots’ a Peace Prize

The hilarious Steven Crowder strikes again with this play on Obama’s Nobel prize.

Published in: on October 16, 2009 at 2:27 am  Leave a Comment  

“3.6 Million Jobs Lost is ‘Quite Positive'”

From the Foundry blog at the Heritage Foundation,

The Obama administration released the first hard numbers on how many jobs their $787 billion stimulus package has created or saved on Recovery.gov today. The number: 30,383 jobs from roughly $16 billion worth of stimulus contracts awarded directly by federal agencies.

Crunching the numbers, that comes to $533,000 per job “saved or created.” To put those 30,383 jobs in perspecitve, consider that the U.S. economy lost 263,000 net jobs just last month and has lost 3.6 million net jobs since President Barack Obama was sworn into office.

But the administration also claims that federal contractor spending is just one portion of the overall stimulus “buckshot.” Last month at the Brookings Institute, Vice President Joe Biden claimed that White House computer models showed their stimulus plan had already saved between 500,000 and 750,000. And just how accurate are these White House economic  models? Well, when the White House was pitching its plan to the American people, White House economic adviser Jared Bernstein wrote a reportA a 26-year record high of 9.8% unemployment rate. claiming the stimulus would keep unemployment under a peak of 8%. And what have actual Bureau of Labor and Statistics shown?

So what does Bernstein have to say about the stimulus now? Associated Press reports:

Jared Bernstein, the chief economic adviser to Vice President Joe Biden, said it was too early to draw conclusions from the data “but the early indications are quite positive.”

Heritage fellow J.D. Foster explains where Bernstein’s fancy model went wrong:

The Keynesian stimulus theory fails for the simple reason that it is only half a theory. It correctly describes how deficit spending can raise the level of demand in part of the economy, and ignores how government borrowing to finance deficit spending automatically reduces demand elsewhere. Exculpatory allusions to idle saving simply do not wash in a modern economy supported by a modern financial system. Deficit spending does not create real purchasing power and so it cannot increase total demand in the economy. Deficit spending can only shift the pattern of demand toward government-centric preferences.

Exactly what the Obama administration is after.

Published in: on October 16, 2009 at 2:19 am  Leave a Comment  

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Published in: on October 16, 2009 at 2:11 am  Leave a Comment