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It’s All About Assumptions:
How a $829 Billion Healthcare Bill Reduces the Deficit

October 9, 2009 by B. Daniel Blatt

James Taranto echoes my thoughts upon reading that the Congressional Budget Office had scored the Baucus health care bill (still lacking legislative language) and found the $829 billion boondoggle would cut the deficit by $81 billion over the next 10 years:

So Congress is going to reduce the deficit by increasing spending $829,000,000,000.00? Doesn’t this sound like–well, a joke?

How do they do that?  Sounds like, well, you know that word whose dictionary definition was, well, not entirely satisfactory to the president.  That dreaded “T” word.  (Oh yeah, and there are going to be cuts in Medicare too!):

CBO’s estimate of the Baucus plan substantially understates its true cost because it is based on key assumptions that will never hold up over time.

First, there is the new tax on so-called high-cost health-insurance plans.  The Democrats are trying to sell this as a tax on insurers.  But no one is buying that, especially not the unions.  It’s the insurance enrollees who will pay it, in the form of higher deductibles and cost-sharing to keep premiums below the thresholds.

Don’t think the American public is going to buy that.  As taxes go up, James C. Capretta (who wrote the above) finds that the Democrats expect fees to go down:  “the Baucus plan assumes deep and continuous cuts in physician fees that no one supports or believes will occur.  Restoring those cuts would add more than $200 billion to the plan’s bottom line.”  Read his analysis of all the assumptions being made to make the plan deficit neutral.

Having also looked at the CBO’s “fairly sketchy description,” Megan McArdle finds that “virtually all of the extra benefit appears to come from estimating that employers will see their health care costs fall“.  There they go again, with their estimations, assuming costs are going to fall!

In short, all blogging law professor William A. Jacobson agrees that the latest scoring is all about assumptions:

The main problem is that the Baucus Concepts [it’s not a Bill] make assumptions which the CBO recognizes are unlikely to occur, but which the CBO must follow nonetheless in its scoring. And those phony Baucus assumptions go to the heart of the game played to make the Baucus Concepts deficit neutral over two decades.

Before we make too many assumptions, let’s wait until see the final bill in the enforceable language (that will be added to the U.S. Code).  And let’s hope that a Miss R. Scenario is not making the assumptions.

Filed Under: Big Government Follies, Obama Health Care (ACA / Obamacare)

Comments

  1. The_Livewire says

    October 9, 2009 at 8:18 am - October 9, 2009

    I’d add that this is going to fail in conference commitee. Nancy Pelosi’s already announced that she’s going after Rx companies, breaking the agreement, and going after insurance companies even more.

  2. V the K says

    October 9, 2009 at 8:50 am - October 9, 2009

    Yeah, these are the people who “estimated” Cash for Clunker would be a billion dollar program, and it ended up costing three billion. Also, there was an article in the WSJ yesterday about a bridge in Little Rock AR. When a non-government, private group offered to renovate the bridge, the estimate cost of renovations was $4million. But then, renovating the bridge became a Federal “stimulus” project, and now it will cost $10.5 million.

    And these people expect us to believe that them running health care will save money… let alone that they promise to add 30,000,000 people to the system, add zero doctors or hospitals to the system, and claim that they’ll deliver better quality with no rationing. What they are promising is impossible.

  3. TnnsNe1 says

    October 10, 2009 at 12:54 pm - October 10, 2009

    “What they are promising is impossible.”

    The basis of Mr. Obama’s entire political career.

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