Here’s how the New York Times headlined its story on the Congressional Budget Office’s Monday healthcare-bill report: “No Big Cost Rise in U.S. Premiums Is Seen in Study.”
Actually, as the Wall Street Journal points out, the CBO reported that there will be a little cost rise in premiums: from 10 percent to 13 percent for individual health policies (that means that family policies that cost $13,100 today on average will jump to $15,200 under Obamacare). The Journal continues:
Finance Chairman Max Baucus chimed in from the Senate floor that “Health-care reform is fundamentally about lowering health-care costs. Lowering costs is what health-care reform is designed to do, lowering costs; and it will achieve this objective.”
Except it won’t. CBO says it expects employer-sponsored insurance costs to remain roughly in line with the status quo, yet even this is a failure by Mr. Baucus’s and the White House’s own standards. Meanwhile, fixing the individual market—which is expensive and unstable largely because it does not enjoy the favorable tax treatment given to job-based coverage—was supposed to be the whole purpose of “reform.”
Instead, CBO is confirming that new coverage mandates will drive premiums higher. But Democrats are declaring victory, claiming that these higher insurance prices don’t count because they will be offset by new government subsidies. About 57% of the people who buy insurance through the bill’s new “exchanges” that will supplant today’s individual market will qualify for subsidies that cover about two-thirds of the total premium.
So the bill will increase costs but it will then disguise those costs by transferring them to taxpayers from individuals. Higher costs can be conjured away because they’re suddenly on the government balance sheet. The Reid bill’s $371.9 billion in new health taxes are also apparently not a new cost because they can be passed along to consumers, or perhaps will be hidden in lost wages.
As the Journal says, this isn’t cost-cutting but “the paleoliberal school of brute-force wealth redistribution.” But isn’t that the whole point when you decide to put Democrats in charge of 18 percent of the nation’s economy?