Commentary Magazine


Topic: John Cassidy

There Is No Santa Claus for Health Care

A sharp reader points me to this:

The official projections for health-care reform, which show it greatly reducing the number of uninsured and also reducing the budget deficit, are simply not credible. There are three basic issues. The cost and revenue projections rely on unrealistic assumptions and accounting tricks. If you make some adjustments for these, the cost of the plan is much higher. The so-called “individual mandate” isn’t really a mandate at all. Under the new system, many young and healthy people will still have a strong incentive to go uninsured. Once the reforms are up and running, some employers will have a big incentive to end their group coverage plans and dump their employees onto the taxpayer-subsidized individual plans, greatly adding to their cost.

James Capretta? Yuval Levin? Rep. Paul Ryan? No — John Cassidy of the New Yorker. It does of course raise the question as to why these warning flares didn’t go up from liberal publications before ObamaCare passed, but it’s nice to know there is broad opposition to it now across the ideological spectrum.

Cassidy’s  entire piece is well worth a read, but his takedown of the cost numbers is especially helpful and echoes what conservative critics have been saying for months:

Does Santa Claus live after all? According to the C.B.O., between now and 2019 the net cost of insuring new enrollees in Medicaid and private insurance plans will be $788 billion, but other provisions in the legislation will generate revenues and cost savings of $933 billion. Subtract the first figure from the second and—voila!—you get $143 billion in deficit reduction. …

The first objection to these figures is that the great bulk of the cost savings—more than $450 billion—comes from cuts in Medicare payments to doctors and other health-care providers. If you are vaguely familiar with Washington politics and the letters A.A.R.P. you might suspect that at least some of these cuts will fail to materialize. … The second problem is accounting gimmickry.

Cassidy, who favors “Romney-ObamaCare” instead, may not have the right solution. (Massachusetts is not exactly a smashing success.) But his analysis is dead-on and may show up in more than a few political ads this season.

A sharp reader points me to this:

The official projections for health-care reform, which show it greatly reducing the number of uninsured and also reducing the budget deficit, are simply not credible. There are three basic issues. The cost and revenue projections rely on unrealistic assumptions and accounting tricks. If you make some adjustments for these, the cost of the plan is much higher. The so-called “individual mandate” isn’t really a mandate at all. Under the new system, many young and healthy people will still have a strong incentive to go uninsured. Once the reforms are up and running, some employers will have a big incentive to end their group coverage plans and dump their employees onto the taxpayer-subsidized individual plans, greatly adding to their cost.

James Capretta? Yuval Levin? Rep. Paul Ryan? No — John Cassidy of the New Yorker. It does of course raise the question as to why these warning flares didn’t go up from liberal publications before ObamaCare passed, but it’s nice to know there is broad opposition to it now across the ideological spectrum.

Cassidy’s  entire piece is well worth a read, but his takedown of the cost numbers is especially helpful and echoes what conservative critics have been saying for months:

Does Santa Claus live after all? According to the C.B.O., between now and 2019 the net cost of insuring new enrollees in Medicaid and private insurance plans will be $788 billion, but other provisions in the legislation will generate revenues and cost savings of $933 billion. Subtract the first figure from the second and—voila!—you get $143 billion in deficit reduction. …

The first objection to these figures is that the great bulk of the cost savings—more than $450 billion—comes from cuts in Medicare payments to doctors and other health-care providers. If you are vaguely familiar with Washington politics and the letters A.A.R.P. you might suspect that at least some of these cuts will fail to materialize. … The second problem is accounting gimmickry.

Cassidy, who favors “Romney-ObamaCare” instead, may not have the right solution. (Massachusetts is not exactly a smashing success.) But his analysis is dead-on and may show up in more than a few political ads this season.

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