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The Healthcare Paradox

This weekend, Congressman Martin Heinrich and a panel of experts spoke to an overflow crowd on the topic of proposed federal gift to the health insurance industry:

Several members of the audience asked about costs and how they would affect a rapidly growing federal deficit, now projected to reach $9 trillion over the next decade.

Heinrich said much of the more than $1 trillion in estimated costs would be funded through provisions in various bills that would tax certain employers who do not provide health insurance to employees. Other costs would be paid for by eliminating “waste, fraud and abuse,” he said. The congressman said he would remain open to other ideas on paying for health care changes.

A gift to the health insurance industry is in fact what we are talking about here. This is another classic example of taxing one form of business to give to another. In this case, every business that does not now pay for health insurance will have to pay for health insurance. We’re also going to find in the long run that everyone’s personal income taxes are going to go up. Because, let’s face it, government can’t control costs either:

State government’s largest health care program faces a serious budget shortfall that could balloon to $300 million next year, forcing Gov. Bill Richardson’s administration to start planning for cutbacks in Medicaid.

Options range from reducing or eliminating benefits, such as dental care for poor adults, to lowering the reimbursement rates for doctors and other providers, according to New Mexico Human Services Secretary Pam Hyde.

If drastic cost-cutting becomes necessary, she said, the state might need to scrap entire portions of Medicaid, such as a program to help low-income workers with insurance coverage, or revamp Medicaid to provide a minimum amount of services.

Mind you, this is what it looks like when state government is receiving $3 billion dollars of federal bailout money for services. Oh, I know what you’re going to say. That’s a state problem. We’re talking about the a federal healthcare solution. The federal government can control costs:

Millions of older people face shrinking Social Security checks next year, the first time in a generation that payments would not rise.

The trustees who oversee Social Security are projecting there won’t be a cost of living adjustment (COLA) for the next two years. That hasn’t happened since automatic increases were adopted in 1975.

By law, Social Security benefits cannot go down. Nevertheless, monthly payments would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly.

Yeah, right. The federal government is great at balancing a budget and projecting the ultimate costs of a pie in the sky program. If you believe that, please send me an email regarding the ocean front property I have for sale in Arizona.

UPDATE: To help illustrate my point regarding the federal government’s success when it comes to cost projections:

The Obama administration will raise its 10-year budget deficit projection to approximately $9 trillion from $7.108 trillion in a report next week, a senior administration official told Reuters on Friday.

The higher deficit figure, based on updated economic data, brings the White House budget office into line with outside estimates and gives further fuel to President Barack Obama‘s opponents, who say his spending plans are too expensive in light of budget shortfalls.

The White House took heat for sticking with its $7.108 trillion forecast earlier this year after the Congressional Budget Office forecast that deficits between 2010 and 2019 would total $9.1 trillion.