The folks pushing Placebocare are wanting us to believe that other than the $800 Billion or higher increase in the deficit, Placebocare won’t cost anyone another penny to provide all of its wonders. On it’s face, this doesn’t pass the smell test. How do you add tens of millions of additional users to a system without increasing costs? How to you accept all health conditions without increasing costs? How do you dramatically reduce the ability to rate differently for different health situations without increasing costs…at least on someone? How, how, how?
The Politico is reporting that another set of Placebocare studies have been done by WellPoint. While not received directly from WellPoint, Ben Smith has the studies posted on his blog. Want to see the potential impact of Placebocare on your health insurance premiums? From the studies posted on Smith’s site:
Note that these are projections of the increase in health insurance premiums. While they do assume that new taxes on things like hearing aids etc. are passed on via increased health care premiums, it does not include increases in your taxes that will be required to offset the significant increase in the deficit Placebocare will cause.
So, what do we see here? Well, we see some very basic economic principles being reflected.
In regular insurance analysis, the amount of risk assumed directly impacts the fees charged to assume that risk. This principle is why in today’s health insurance, we see young, healthy people being charged significantly less for insurance than older, less healthy people. Placebocare, like so many other government programs, does not treat people as groups of similarly situated individuals but rather, attempts to treat everyone the same. The result is clear in the information provided from these studies.
Looking at the result of the studies we see several things. First, the people or groups who are closest to the blended average of all have the least increase in their insurance costs. Second, those who typically pay the least amount for their insurance will see dramatic increases in their rates so as to bring them closer to the “norm”. Finally, we see that those who today, pay the higher premiums, will actually see some reduction in premiums. Of course in this last case, the reduction in premiums will also come with a reduction in the overall services they receive as this will be the group that feels the required effects of reducing the provision of health care in an attempt to keep Placebocare from completely bankrupting the nation.
Folks, none of this is suprising. There has never been a government run social program that hasn’t cost dramatically more than budgeted and resulted in increased deficits or costs over time. Does anyone really think Obama and his acolytes have found a way to break this trend? If they have, why don’t they focus that pixie dust on Social Security which is the number one problem for long term budget deficits. Better yet, why don’t they fix Medicare and Medicaid, places where they already have near complete control on benefits and reimbursements?
Through Divine insight or shear luck, the Founding Fathers did not allow for the government to be involved in social programs. If through insight, perhaps we can learn as every time the government wades into the social economic programs, they become a bigger mess than had it been left alone. When government gets involved with social economic programs it does not create a “Free Lunch” but it sure as heck will create less liberty and an increase in taxes!