Monday, August 24, 2009

Ooops: President Obama routinely provides figures for health insurance reform that are HALF of what the real numbers will be

Keith Hennessy explains. The logic and documentation are lengthy and wonkish; if you have doubts read the entire post yourself.

What Hennessy concludes is that the President routinely says things like this:

Now, what I’ve proposed is going to cost roughly $900 billion — $800 billion to $900 billion. That’s a lot of money. Keep in mind it’s over 10 years. So when you hear some of these figures thrown out there, this is not per year, this is over 10 years. So let’s assume it’s about $80 billion a year. It turns out that about two-thirds of that could be paid for by eliminating waste in the existing system.

Problem? Best estimates and the loading sequence of the benefits are calculated to average $160 billion per year rather the $80 billion the President keeps claiming. Moreover: current predictions are that by 2019 the cost will have reached a annualized $202 billion.

Here's what Hennessy concludes:

So the President is off by at least a factor of two.

This becomes particularly misleading when the President compares his $80 B annual new cost to $17-$18 B in savings from Medicare Advantage. The listener hears that MA savings can offset more than 20% of the cost, when in reality it’s more like 10%.

Is this nitpicking? Why is it important?

We’re discussing tens and hundreds of billions of dollars here. Each billion matters.

The aggregate cost of the new entitlement is the most important fiscal fact in this policy proposal.

One of the hardest elements of passing the bill is getting agreement on how to offset the proposed new spending. The President’s statements make it appear that this problem is easier to solve than in reality.

Everything the President says should be accurate and verifiable.

This is a repeated mistake. That should never happen.

Someone on the White House staff needs to tell the President not to use this arithmetic. And it’s disappointing that it appears no one in the White House press corps has asked about this basic factual error.

See, there's a real problem with the health insurance reform debate in this country when the opposition party is making shit up about the program for which the President is making up the cost numbers.

Rocks. Glass houses. Two wings of the Demopublican Party and all that.

3 comments: said...

Why are you guys so excited about all this? Maybe if your suppliers didn't overcharge there would be less of a problem. There are so many misapprehensions that its difficult to know where to start.

Over here in the UK, despite what everyone says, we strongly approve of our NHS (National Health Service). No we don’t kill people – its illegal. Yes, even the poorest get treated free – thats morality (and Christianity). Yes if I want to jump the queue, assuming I paid my health insurance I can do so. But its interesting that If I’m REALLY ill I’ll go to the NHS every time, because for serious and emergency stuff they are actually better.

And as a result we have lower infant mortality, and higher life expectancy. We spend a lower proportion of GDP on healthcare, and we can still spend as much as we like individually on private healthcare insurance.

So maybe you should be trying to learn from us? I know you won't want to.

The only reason I can think of for all this hysteria in America is that it’s being whipped up by vested interests.

Here’s an example for you. 2 years ago I tripped in central London and ripped the quadriceps tendon completely off my knee at 5pm on a Friday, on the steps of the London Library. An ambulance (free, NHS) was called by a first-aider because I couldn’t walk. I was taken to a major hospital, where my knee was stabilized, and I was admitted (free). The next day I was operated on at 1 p.m. (free), and I was home, in plaster, on the Sunday. After the initial Physio consultation (free) there was a bit of a wait for the next appointment for some reason, so I invoked my health insurance and did the rest of the Physio privately. But it wouldn’t really have mattered – The result would be the same, if a little delayed. I am fit now, and can walk and even run.

So really, what's the beef? We can do it. So can you.

Anonymous said...

Keith Hennessey is the correct spelling.


Anonymous said...

None of it was (free) you moron.