How expensive will Obama care really be? Let’s look at what happened with Medicade?
Friday, 14. May 2010
In 1965, Congressional budgeters said that Medicade would cost $12 billion in 1990. Its actual cost that year was $90 billion. WHOOPS!!!!!
The hospitalization program alone was supposed to cost $9 billion but wound up costing $67 billion. Another WHOOPS!!!!!!
These aren’t small forecasting errors. The rate of increase in Medicare spending has outpaced overall inflation in nearly every year (up 9.8% in 2009), so a program that began at $4 billion now costs $428 billion.
The Medicare program for renal disease was originally estimated in 1973 to cover 11,000 participants. Today it covers 395,000, at a cost of $22 billion. The 1988 Medicare home-care benefit was supposed to cost $4 billion by 1993, but the actual cost was $10 billion, because many more people participated than expected. Another congressional DOH!
This is nearly always the case with government programs because their entitlement nature—accepting everyone who meets the age or income limits—means there’s no fixed annual budget.
One of the few health-care entitlements that has come in well below the original estimate is the 2003 Medicare prescription drug bill. Those costs are now about one-third below the original projections, according to the Medicare actuaries. Part of the reason is lower than expected participation by seniors and savings from generic drugs.
Moral of the story – Congress is terrible at estimating the cost of programs and what will the Obama healthcare cure be worse the the actual problem we have right now?
http://online.wsj.com/article/SB10001424052748703746604574461610985243066.html?mod=WSJ_hpp_sections_opinion