The president has a full-court press on Congress to pass his health-care plan, dubbed “Obamacare.” The primary reason given for the legislation is to control and ultimately reduce the cost for health care.
The government’s 10-year projection on the cost for this program is $1 trillion. We are fortunate that Medicare, and to a lesser extent Medicaid, is an excellent example of a similar, albeit smaller, government-controlled health-care program.
Looking back on the financial cost projections for these programs versus what the actual costs were should provide true insight into the veracity of today’s projections for Obamacare. At Medicare’s inception in 1965, the government projected that the cost for the program in 1990 would be $12 billion. The actual cost came in at $112 billion, a 920 percent overrun.
Government cost projections for the sister program, Medicaid, fared even worse. In a government 1987 projection, the Medicaid program was estimated at $1 billion by 1992. The actual cost came in at $17 billion, a 1,700 percent overrun.
Finally, Medicare Part D, the drug subsidy program for seniors, was added by Republicans just prior to the 1994 elections. Two months after the election, the Bush administration raised the cost projections for the first decade from $394 to $534 billion. Low-balling taxpayers?
It is obvious that making cost projections for complex programs is far from an exact science. Moreover, in all cases the data suggest a “politics first” motivation.
My thoughts on the cost and the vacuous savings projections for Obamacare are summarized in two famous quotes. George Santayana said, “Those who do not learn from history are doomed to repeat it.” Albert Einstein defined insanity as “doing the same thing over and over again and expecting different results.”
Michael J. Keogh
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