Romer on Health Care Costs: ‘The Nightmare Scenario is Getting Closer’

If it is corrupt now in its formation …….. what will it be at its inception?

“increase net economic well-being by roughly $100 billion a year, which is roughly two-thirds of a percent of GDP.”
Well, that’s a new one. They should try that out on GM first, say our tax dollars increased the economic well-being of GM by 60B and see if there are any takers.

I think our health care system needs overhauling but maybe not as everyone else might think. I personally think that we can, if we put our minds to it, put together a blend of private and socialized care. I think the elderly and those less fortunate deserve free or low priced health care. Those more fortunate can use private health care funded through their insurance providers. How many elderly and infirmed have to do without proper care because they simply cannot afford the doctor visit or the medications? We’re the United States of America for heaven’s sake. If any country can provide for their people, we should be at the top!!

Wait a minute… Romer is more passionate about health care than Hillary Clinton?

What makes any sane person think that the government can manage health care. Look at what the government has done to Social Security, Medicare, Public Housing, and now AIG. With this kind of a track record they have proven that they aren’t even capable of successfully operating the local burger stand. To start with where will the money come from and not cause an increase to the government debt any more than it is? In his entire 8 years in office Bush increased the debt of the US Government by roughly 4.8 Trillion dollars. In his first 60 days in office Obama has increased the debt of the government by 412.8 Billion dollars. At this rate he will increase the debt of the Government by 2.4 Trillion dollars in his first year alone and 9.9 Trillion dollars by the end of his 4 year term in office. Since the debt owed by the Government was 10.6 Trillion dollars when he took office an additional 9.9 Trillion will almost double the debt in just 4 years. This is money that the Government does not have. It was recently reported that the interest alone on the debt is nearing $1 Billion a day, that $365 Billion a year which when you look at it in those terms is a very large chunk of the federal budget. At this rate there is absolutely no money available for health care. Get real and realize that it is time to stop spending and do what should have been done long ago, cut all spending which is not specifically authorized in the constitution. There is NO money for healthcare, there is NO money for Cap and Trade, there is NO money for education reform or any other dreams in the upcoming budget. Look at what the government has done to Social Security, Medicare, Public Housing, and now AIG.
As far as the federal government cost of health care to its own employees you can Google FEHB and see what the different plans available to federal employees are. It should be noted that these are the same exact plans which are available to our elected federal officials. The government does not pay 100% of the employee health insurance and the portion they pay is considered a benefit in lieu of wages just like most major employers who provide a health benefit to their employees. Usually the larger the company (more employees) the more likely is that they provide the health insurance rather than paying the larger wage as most employees would rather have access to the health insurance instead of the small increase in wages. For an employee in California with a family looking at an HMO (California Health Net, High Option) this amounts to roughly $4.40 an hour. For the same family in California looking at a FFS (Blue Cross Blue Shield Service Benefit Plan, Standard Family) this also amounts to $4.40 an hour. Small business’s which have fewer employees cannot afford to offer this type of benefit to their employees without having to make drastic cuts (layoffs) or drastically raise the price of their finished product/service both of which will probably cause the business to fail in time due to lack of profit. The federal employee still has to pay to participate in the insurance ($292 a month for the HMO and $357 a month for the FFS) so the government does not provide 100% of the insurance to the government employee. Probably the best that the government could do for health care would be to somehow expand the FEHB type of insurance for the general public to participate in but with no government funding for the general public. You have to remember that the federal employee is receiving his government share of the insurance funding as part of his wage and benefit package and performing labor in return, the general public would provide no benefit to the government for any government funding of their health care. Perhaps another question you may want to ask yourself is how much would I pay for healthcare insurance? Would you pay $1055.00 per month to be able to partake of the HMO I used as an example? Would you be willing to pay $1120.00 per month to be able to participate in the FFS I used as an example? If yes then maybe the answer is not government paid healthcare but the government allowing all citizens to participate in their healthcare programs at their own expense (they would have to pay the total of what the government pays for their employee plus what the employee pays). I would imagine that there are some plans which would be cheaper but they might not offer the same level of health care as a more costly one. If this was the way they go then it would be up to each individual to carefully compare costs and benefits between plans before making possibly a wrong choice.
When Medicare was created in 1965, benefits were relatively limited and retirees paid a substantial percentage of the costs of their own care. 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. 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, Schip is now open to families that earn up to 300% of the poverty level, or $63,081 for a family of four. Any new federal health plan will inevitably follow the same trajectory, no matter how much 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. This health-care debate isn’t like the “stimulus” bill, which was largely about short-term spending and deficits. This one is about whether to turn 17% of the U.S. economy entirely and permanently into the arms of the government.
Throughout the 1950s and 1960s, during the phase-in period of Social Security, Congress was able to grant generous benefit increases because the system had perpetual short-run surpluses. Congressional amendments to Social Security took place in even numbered years (election years) because the bills were politically popular, but by the late 1970s, this era was over. For the next three decades, projections of Social Security’s finances would show large, long-term deficits, and in the early 1980s, the program flirted with immediate insolvency. From this point on, amendments to Social Security would take place in odd numbered years (years that were not election years) because Social Security reform now meant tax increases and benefit reductions. When revenues exceed expenditures, as they have in most years, the excess is invested in special series, non-marketable U.S. Government bonds, thus the Social Security Trust Fund indirectly finances the federal government’s general purpose deficit spending. It is also interesting to note that the Supreme Court has established that no one has any legal right to Social Security benefits. The Court decided, in Flemming v. Nestor (1960), that “entitlement to Social Security benefits is not a contractual right”. In simple terms, the decision means that since no one has any legal right to Social Security benefits, Congress can cut or eliminate benefits at any time.
The Trust Fund is regarded by some as an accounting trick which holds no economic significance. Others argue that it has specific legal significance because the Treasury securities it holds are backed by the “full faith and credit” of the U.S. government, which has an obligation to repay its debt. It is important to note, however, that while the Treasury guarantees the interest and principal payments it makes to the Social Security Trust Fund, the benefit payments made from the Social Security Trust Fund to American retirees have no guarantee at all. The Social Security Administration’s authority to make benefit payments as granted by Congress extends only to its current revenues and existing Trust Fund balance, i.e., redemption of its holdings of Treasury securities. Therefore, Social Security’s ability to make full payments once annual benefits exceed revenues depends in part on the federal government’s ability to make good on the bonds that it has issued to the Social Security trust funds. The federal government’s ability to repay Social Security, in turn, is contingent on fiscal policies taken today (which have tended to increase deficits and the percent of the budget spent on interest and principal payments) and in the future. Once again in simple terms if you want Social Security then the government is going to have to reduce its debt (lower spending to pay off debt) or raise the FICA taxes to ensure that there is enough coming in during the current year to cover the benefits which are to be paid. Raising the FICA taxes is probably not the way to go as in the coming years there are more people who will be receiving Social Security than there will be people paying the taxes which means that the government has to stop spending on all of their dream programs that they are now trying to pass. Bottom line is the Government does not have this kind of money and there is no way they can get this kind of money without a large tax increases on the entire population.
In his entire 8 years in office Bush increased the debt of the US Government by roughly 4.8 Trillion dollars. In his first 132 days in office Obama has increased the debt of the government by 694.2 Billion dollars. At this rate he will increase the debt of the Government by 1.9 Trillion dollars in his first year alone and 7.6 Trillion dollars by the end of his 4 year term in office. If he is elected for a second term with the same rate of spending then the government debt will increase by 15.3 Trillion dollars. Since the debt owed by the Government was 10.6 Trillion dollars when he took office an additional 7.6 Trillion will almost double the debt in just 4 years to 18.3 Trillion dollars and at the end of his second term it will have increased to an unthought-of 26 Trillion dollars. The interest alone on this amount of debt will consume more than half of the entire federal budget. This does not even include what Obama wants to put into healthcare which the CBO has estimated may actually cost upwards of 1.6 Trillion dollars. This is money that the Government does not have and cannot conceivably have without raising taxes to the point where everyone in the country will be paying a much higher tax rate than they are currently paying. No matter how you want to put it any healthcare reform will require government involvement which will lead to required government spending so the money is an important issue, if it’s not there then healthcare will have to wait until such time as it is available. Obama promised change but this is ridiculous he makes all who came before him look minor on their spending while in office. Time to stop spending and do what should have been done long ago, cut spending which is not specifically authorized in article 1 of the constitution.

drk md – Thanx for your insight..
Tort reform has been minimized.. some saying it is only 2-3 percent savings..
Mediation and arbitration options could provide some savings, if caps are in place..
Trial lawyers are like the UAW, they will be protected, at all political cost to the administration.

“Tort reform has been minimized.. some saying it is only 2-3 percent savings..”
The impact that lawyers and courts have on the medical industry is a cascade. From malpractice insurance to the insane price of a surgical instrument that could be accidentally left inside someone, are all subjects of suits and thus, charge premiums to protect themselves. The drug industry, often targetted with studies that all say “MAY cause” or “COULD cause” offer no legitimage proof of the claim.
Unrelated, Asbestos damages lungs and was said to cause lung cancer. Yet their sample was compared to the average US citizen. The average insulation worker had a 4x higher chance of being a smoker, conveniently left out and not adjusted for. And the study could not account for people who had worked with asbestos their entire life without issue, just like how some Coal miners work their entire life in a coal mine without lung issues. It’s like we cannot come to grips that some people are more susceptable than others, and we have to blame something because lawyers tell us something is to blame in order to fill their pockets along with a promise to fill yours.
As long as us, the people, see dollar signs from lawsuits no industry is safe. What we need is compensation standards for all grievances, not arbitrary settlements by emotional jurors who hold someone elses pocket book. Its lunacy.

The administration’s goal is to change health care in two fundamental ways. First, to cut costs by slowing the annual growth rate of health care costs by 1.5 percent, which they estimate would increase GDP by 2 percent in 2020 and nearly 8 percent in 2030.
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Well, yeah, that’s a great goal. It’s getting there that’s the real problem. We’ll see if she offers something that will do that, but nobody in the administration has done so so far.

Old Russian saying…You can tell same lie 1000 time but not change truth!
Difference between USSR Communist media and USA “mainstream media”
In Russia government make media say what they want – even if lie.
In USA “mainstream media” try make government what they want – even if lie..
…..eventually they become same thing?!
Do we really want someone who can not even show his own birth certificate try “reform” healthcare

We will always be ‘unhappy’ with the cost of healthcare, since there’s no natural limit to it. Just like an olympic swimmer will always be ‘unhappy’ with their best time.

Lawyers and politicians are one in the same as far as the law makers go. So now you can plainly see what the problem is…..they are NOT looking out for Joe Citizen!
Everyone in DC has got to go!!
Dem, Rep and Ind. are all to blame for the fall of our nation. They ALL sold the voters and tax payers down the river.
THAT…..is the bare facts so stop all this politics crap already!!
It’s them against us!!

46 million is only 16% of the population. So, we are expected to destroy our system to equalize and accomodate a mere 16% of the population. By politicizing the number in millions instead of talking about the percentage, and offering the idea of universal (translates to “free”) coverage for all – our new corrupt power junkies are just rolling out one more entitlement idea to help guarantee 46 million more votes in all upcoming elections…

We can fix our health care system by stringent regulation of the health care providers and insurers. We can force the coverage of people who are denied coverage for prior conditions, etc.
You don’t need to completely disassemble and then reassemble the whole heath care system to achieve reform. Unfortunately politicians like “grand plans”. But given our current financial state, lets hold off on any rebuilding and instead reform it in a fashion that will not add billions and trillions more to the debt.

There has to be a lot of room to save money by changing the healthcare system..probably enough to insure the underinsured..
Some of these people who don’t have insurance are probably eligible for government subsidized insurance and care.. but they won’t go to the trouble of applying for themselves or their children….
A lot of our problems are poor education, drugs, obesity, alcoholism, pill doctors/quacks…
I personally, just don’t believe that the government will be able to implement and secure our healthcare future in a cost efficient manner.. as they have no history of doing so,,, in any of their current and past endeavors.

“46 million is only 16% of the population.”
Ah yes the Limbaugh argument
“They’re 12 percent of the population. Who the hell cares?”

If you look at a good number of people on S.S. disability pensions.. you will wonder.. if they can do all of the things that they do in their personal lives.. why can’t they just get a job?

“Social Security and MediCare/Medicaid are two of the most successful and popular government programs in the history of our country.”
LOL…and you base that on WHAT?

Howard Dean is correct.
“a”(Toothy, Robust)”public health insurance option is more important than bipartisanship, and Democrats should pass health-care legislation that includes the option with 51 votes if necessary.”
“Democrats should have “no intention” of working with Republicans if it’s not the strongest possible legislation that could be passed with a simple majority.” (Howard Dean)
This is what WE THE PEOPLE gave the Democrats all that power to do for ALL of us.
You see, Dr. Dean knows that in medicine and healthcare there is only one acceptable standard. And that standard is the HIGHEST level of EXCELLENCE you can provide for everyone. Nothing less has ever been acceptable in caring for a precious human life.
And the White House is right too. “Good health care reform is essentially good economic policy.” (Christina Romer)
jacksmith — WORKING CLASS