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Report: Kennedy Bill Would Actually Cost $4 Trillion

By Philip Klein on 6.16.09 @ 3:40PM

Yesterday, the CBO estimated that the current Democratic Senate health care bill would increase the defict by $1 trillion over 10 years while leaving 30 million uninsured, forcing the White House to distance itself from the legislation. While liberals have tried to emphasize that the CBO provided only a partial analysis of the draft legislation from Ted Kennedy's Health, Education, Labor and Pensions Committee, a more comprehensive analysis of the legislation will only serve to drive the bill's ultimate cost higher. For instance, because it was only working with a draft of the bill that had holes in it, the CBO did not estimate the costs associated with increasing Medicaid elgibility to 150 percent of the poverty level, or the full cost of providing subsidies to individuals with incomes at up to 500 percent of the poverty level to purchase insurance through state-run exchanges. Once this is taken into account, liberals are right that the final CBO estimate will reflect more people being insured, but the cost of the legislation will go up as well.

Health Systems Innovations Network, a consulting group, went ahead and estimated the full cost of a bill that included the subsidies and Medicaid expansion, and reduced the number of uninsured by 99 percent. With these assumptions, they estimate d (pdf) the cost at a staggering $4 trillion over 10 years, resulting in the shift of 79 million Americans to government-run health care. The report does not include possible tax increases or spending offsets, but notes that, "this would be a challenging proposal to finance with budget neutrality."

President Obama, in a speech to the American Medical Association on Monday, declared of the price tag of health care legislation: "it is a cost that will not – I repeat, not – add to our deficits."

UPDATE: I just spoke with Steve Parente, principal at HSI, who explained that the main reason why the group's estimate is so much higher than the CBO is that it assumes more people will buy coverage with government help. "We see a lot of people taking advantage of that subsidy, because it goes so far up the income threshold," Parente said. To be clear, 500 percent of the poverty level translates into income of $110,000 for a family of four. He also said HSI would revise the estimate if a new version of the legislation proposed new cost savings. However, he said it's difficult to estimate savings from the adoption of information technology and increased prevention. IT, for instance, could turn into an "unfunded mandate" on doctors and hospitals, while not all forms of prevention are created equal. Flu shots, for instance, are relatively cheap, but providing mammograms to some age groups can be quite costly.

View all comments (18) | Leave a comment

rsg| 6.16.09 @ 6:13PM

Barry al Hussein and Teddy "the swimmer" Kennedy's bill should be renamed to - "The Ensure Democrat Majorities Bill of 2009".

Let's change healthcare so 85% of Americans are happy with their healthcare and let's give healthcare insurance to the 15% who don't have it. You know, the illegal aliens, those who are fairly wealthy but choose not to have insurance, the young and healthy, etc.

Barry "the Central Planner" has it all figured out.....Barry should make our day to day decisions. Barry knows best.

B. Johnson| 6.16.09 @ 6:55PM

Why is the cost of Kennedy's healthcare package such a big deal? The truth of the matter is, regardless if his healthcare plan were only to cost US taxpayers a total of $1, it still remains that the federal government has no constitutional authority to lay taxes to fund any healthcare plan.

Please consider the following.

Not only did the Founders make the 10th A. to reserve the lion's share of government power to serve the people to the states, not the Oval Office and Congress, but speaking of health care, Jefferson had likewise noted that the Founders had trusted the states, not the federal government, with the care of the people. See for yourselves.

"Our citizens have wisely formed themselves into one nation as to others and several States as among themselves. To the united nation belong our external and mutual relations; **to each State, severally, the care of our persons** (emphasis added), our property, our reputation and religious freedom." --Thomas Jefferson: To Rhode Island Assembly, 1801. ME 10:262 http://tinyurl.com/onx4j

But more importantly, Chief Justice Marshall had established the following case precedent, now wrongly ignored, which appropriately limits federal government power to lay taxes.

"Congress is not empowered to tax for those purposes which are within the exclusive province of the States." --Chief Justice Marshall, GIBBONS V. OGDEN (1824) http://supreme.justia.com/us/22/1/case.html

So not only is misguided Obama and Kennedy's proposed healthcare plan constitutionally unauthorized, but based on Justice Marshall's official notes, the feds don't have the power to lay taxes in the first place to fund such a program. In fact, federal government funding for the states for these things can be thought of as the feds returning to the states money that the feds have stolen from the states anyway.

The bottom line is that the people need to wise up to the ongoing, illegal usurpation of state powers by the Constitution-ignoring feds and put the constitutional leash back on the renegade federal government by doing the following. The people need to elect pro-state power people to the federal and state governments in 2010 who will do as follows. Pro-state power leaders need to use their power to amend the Constitution to repeal the ill-conceived 16th and 17th Amendments, the source of power for the corrupt Democratic Party now running the country, in my opinion. The 16th A. in particular, the amendment that gives the feds the power to tax citizens directly, has to go. It needs to go because it has made it too easy for the corrupt feds to lay constitutionally unauthorized taxes, in my opinion.

And once the 16th A. has been repealed and the federal income tax eliminated, the states can finance the federal government with higher state taxes for the following reason. The states can use their greater constitutional powers to serve the people to fight a downhill battle with the feds, eliminating constitutionally unauthorized federal taxes, keeping as many tax dollars in a given state as possible for running things like state healthcare programs. (Did you hear that California?)

And when any state lawmaker shows the voters that they are more interested in protecting the welfare of the federal government than that of their own state, then they can look for another job.

The truth of the matter is that the phony powers now associated with the Oval Office and Congress, powers that the corrupt feds have been scandalously stealing from the states since the days of constitutionally clueless FDR, need to be destroyed. Again, repealing the 16th and 17th amendments is one way to do this, in my opinion.

jimbo| 6.16.09 @ 8:22PM

are liberals mentally ill?

tonypal| 6.16.09 @ 11:18PM

Hey, who cares what it costs. I want my health care. Waaaaaaaaaaahhhhhhhhhhhhhhh!!!! I have a right to it. Waaaaaaaaaaaaaahhhhhhhhhhhh!!!. You say it's not a right guaranteed in the Constitution. Screw you. I want my health care. This country owes it to me because I was born here and I live here and I want it. Waaaaaaaaaaaahhhhhhhhhh!!!

tonypal| 6.16.09 @ 11:19PM

I think the previous post pretty much sums up the attitude of far too many of our fellow citizens. We can thank another federally funded program, public education, for this "thinking."

Stan Redmond| 6.17.09 @ 6:44AM

BUT IT'S FREE!!! Just think it will be even betterer [sic] than Cuba. 4 trillion, 5 trillion... Big deal. This can easily be covered by taxing those making above $250,000 with the current democrat handling of fiscal policy there are sure to be lots and lots of people making over $250,000. Weimar repulic anyone? Billion dollar loaves of bread in Zimbabwe? I fear for the republic.

2Anglico| 6.17.09 @ 10:03AM

4 Trillion over 10 years eh? Let's see, that's 400billion per year, right? A good average rate per employee in my area with Aetna is $240/month( blended with male/female and old/young employees). If Big Daddy O wants these 40 million waifs to have insurance he could pay Aetna, et al, $240/mo and cover them all for $115 Billion per year. (40 million X $240= $9.6 billion/month X 12 months = $115 billion) That's far, far less than 4 Trillion. Like 3 Trillion less.
DO NOT GET ME WRONG, I want the government OUT of the health insurance business, but that horse has left the barn, right? I am simply showing how stupid a government run system would be. It CANNOT "SAVE" any money. No way, no how!!!!!!!
An afterthought; how much could my example above be reduced if the ILLEGAL ALIENS were removed from the BOGUS 40 million uninsured number? If you answered $69.12 Billion/year, go to the head of the class.

jacksmith| 6.17.09 @ 11:50AM

AMERICA’S NATIONAL HEALTHCARE EMERGENCY!

It’s official. America and the World are now in a GLOBAL PANDEMIC. A World EPIDEMIC with potential catastrophic consequences for ALL of the American people. The first PANDEMIC in 41 years. And WE THE PEOPLE OF THE UNITED STATES will have to face this PANDEMIC with the 37th worst quality of healthcare in the developed World.

STAND READY AMERICA TO SEIZE CONTROL OF YOUR NATIONAL HEALTHCARE SYSTEM.

We spend over twice as much of our GDP on healthcare as any other country in the World. And Individual American spend about ten times as much out of pocket on healthcare as any other people in the World. All because of GREED! And the PRIVATE FOR PROFIT healthcare system in America.

And while all this is going on, some members of congress seem mostly concern about how to protect the corporate PROFITS! of our GREED DRIVEN, PRIVATE FOR PROFIT NATIONAL DISGRACE. A PRIVATE FOR PROFIT DISGRACE that is in fact, totally valueless to the public health. And a detriment to national security, public safety, and the public health.

Progressive democrats and others should stand firm in their demand for a robust public option for all Americans, with all of the minimum requirements progressive democrats demanded. If congress can not pass a robust public option with at least 51 votes and all robust minimum requirements, congress should immediately move to scrap healthcare reform and demand that President Obama declare a state of NATIONAL HEALTHCARE EMERGENCY! Seizing and replacing all PRIVATE FOR PROFIT health insurance plans with the immediate implementation of National Healthcare for all Americans under the provisions of HR676 (A Single-payer National Healthcare Plan For All).

Coverage can begin immediately through our current medicare system. With immediate expansion through recruitment of displaced workers from the canceled private sector insurance industry. Funding can also begin immediately by substitution of payroll deductions for private insurance plans with payroll deductions for the national healthcare plan. This is what the vast majority of the American people want. And this is what all objective experts unanimously agree would be the best, and most cost effective for the American people and our economy.

In Mexico on average people who received medical care for A-H1N1 (Swine Flu) with in 3 days survived. People who did not receive medical care until 7 days or more died. This has been the same results in the US. But 50 million Americans don’t even have any healthcare coverage. And at least 200 million of you with insurance could not get in to see your private insurance plans doctors in 2 or 3 days, even if your life depended on it. WHICH IT DOES!

Contact congress and your representatives NOW! AND SPREAD THE WORD!

God Bless You

Jacksmith – WORKING CLASS

2Anglico| 6.17.09 @ 1:22PM

jacksmith, you don't know jack..smith about health insurance.

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