#Economy, #Healthcare, #Politics

Unsustainable Healthcare Costs

At this point, it seems more plausible that the cost of health insurance will keep rising, just as the costs of health care services have continued to climb. The upshot is that the burdens of mandatory purchase, the subsidy costs and the associated implicit marginal tax rates will all increase, eventually to the point of unsustainability. — Tyler Cowen

We continue to debate healthcare proposals in this country, almost non-stop, while the economy burns and fails to recover in any meaningful fashion. On the minds of politicians is not the well-being of the citizenry, or it’s interests, but rather it is the progression of a certain agenda above all else, as the mechanisms are in place to do so; whether or not it can be accomplished within the ranks of the party is mildly debatable, at least.

What the government might consider, rather than this agenda that is, are ideas proven to generate a little momentum in the recovery process: tax breaks, tending to the fiscal health of the federal government, reducing regulatory control on private sector practices, etc. But, health care is just too important.

The quote below is a from Tyler Cowen, How an Insurance Mandate Could Leave Many Worse Off, discussing why the current proposals are eventually doomed to thrive in the pile of unsustainable government ideas.

A further problem is “mandate creep,” which we’ve seen at the state level, as groups lobby for various types of coverage — whether for acupuncture, alcoholism and fertility treatments, for example, or for chiropractor services or marriage counseling.

There are now about 1,500 insurance mandates among the various states, and hundreds of others are under consideration. The dynamic at work here is that the affected groups have a big incentive to push for mandates, while most other people are unaware of the specific issues and don’t become involved.

Because mandates don’t stay modest for long, health insurance would become all the more expensive. The Obama administration’s cost estimates haven’t considered these longer-run “political economy” issues.

Why politicians will not look to these sorts of predictions as an indicator of why their current plans are foolhardy and dangerous is nerve wracking. This is all via, Tyler Cowen. Be sure to read through the comments as it is usually an interesting discussion.

2 Responses to “Unsustainable Healthcare Costs”

  1. Kevin Holesh

    November 27, 2009 @ 6:23 pm

    “But it’s going to be budget neutral! How can we lose?”

    That’s unfortunately what I’m hearing in support of this plan. I think it’s actually arrogant that the government thinks they can run the health care system better than the private market. There isn’t one example of a government running something more efficiently than a free market.

    One thing that would make this a decent plan is to force all Congress men and women to use this health care. Not allow them to spend their 6 digit salary on better health care. Force them to use what they are forcing the rest of us to go through. I can guarantee that they’ll fix any problem that comes up pretty quickly.


  2. Mike

    November 30, 2009 @ 12:37 pm

    Deficit neutral is an oxymoron when it comes to government spending. Additionally, even if it were deficit neutral, that does very little to solve the underlying issue of deficit spending to begin with.

    I agree, force them to use the same set of rules we’re using. They’ll never vote for it, and have in fact voted against an amendment to do just that.

    I wish there were some easy recourse for the citizenry on this matter.

    Great comment.


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