Been catching up on Tyler Cowen’s Marginal Revolution Blog, which is one of my favorite blogs. He’s been all over the Healthcare Reform Debate and economics-based analysis of the various bills that are under consideration. There’s been three recently that I thought were noteworthy:
1) Is this why the Senate bill has an ok CBO rating?
This post quotes the CBO study on the Senate bill:
Because the program would begin taking in premiums immediately but would not start paying benefits until 2016, congressional budget analysts have forecast that it would generate a nearly $60 billion surplus over the next 10 years, cash that would help the larger measure’s balance on paper.
So the $60 billion stockpile in the beginning masks the true costs of the bill in the first 10 years, which is the time horizon that politicians like to quote. But after those 10 years, there’s no stockpile of cash to counter balance the costs.
Cowen concludes:
In the longer run it is very bad for the budget and it is simply an accounting trick. It’s a sign that fiscal responsibility will never come to U.S. health care.
Sounds right to me.
2) What should we do instead of the Obama health reform bill?
This one is a hodge podge of other things we could be considering to improve healthcare. Some I agree with. Some I don’t. But here’s the point. For some reason we’re not allowed to debate the merits of all these alternate proposals. The only debate being allowed is do you support the pending bills or not. Why can’t we debate other ideas. I’d read in other blogs that there are over 40 other healthcare reform bills that various Representatives have filed but have never seen the light of day because the Congressional leadership has already decided the type of healthcare reform we are going to have and refuse to all consideration for any other.
3) Department of Unintended Consequences
This post quotes the CBO analysis of the current House bill on healthcare:
Medicare cuts contained in the health package approved by the House on Nov. 7 are likely to prove so costly to hospitals and nursing homes that they could stop taking Medicare altogether.
Cowen’s conclusion, from an economics point of view:
The laws of economics have not been repealed. I know fully well how hard it is politically, but until the supply side (and I mean the supply of services, not health insurance) is more competitive, the proposed reforms will make the core problems of U.S. health care worse not better.
The blog posts at the above links are reasonably short and deserve to be read.