A smart health care observer e-mails:
One thing to remember, though. It's not really correct to say that a HELP-like scheme will necessarily inflate the deficit. In fact, on the expenditures side, the Finance bill is going to look extremely similar. There will be subsidies for the poor and working class, tax credits for small business, some increases in what providers are paid, etc. Just like in HELP. In addition, Finance will have one very large chunk of extra expenditures -- a Medicaid expansion -- that HELP doesn't.
But Finance will also have the revenue and offsets -- some combination of employer mandate, exclusion reform, Medicare savings, redacted Medicare Advantage payments, and tax hikes on the rich. And when you put those all together, it should be revenue netural.
I guess what I'm saying is that it's not really true that the partial HELP bill shows us that health reform will grow the deficit. It all depends on whether lawmakers pay for those expenditures -- which is something we've known all along.
The fact that HELP didn't indicate how to pay for them is entirely a function of their decision not to fill in certain blanks right now (the employer mandate) and their jurisdiction (they can't do new taxes). Which, by the way, is why you'er right that it was really stupid to submit a partial bill -- although I gather (a) they thought CBO would take into account promises to fill in the blanks (b) they may have needed a placeholder estimate to start markup.
The real issue right now: the internal CBO score of the Senate Finance Committee bill, which came in way overbudget. Even though the CBO's assumptions are very conservative, the bill won't make it anywhere unless the $1.6 trillion cost estimate is somehow reduced, at least in the CBO's eyes. In some ways, it's a question of values: is it worth an additional $1.6 trillion over ten years to reform health care in a meaningful way and cover everyone? Or are the political consequences of deficits to great to bear?
It's not just the political consequences of the deficits that are problematic, but the economic consequences of them.
Mark, no offense but it's like you didn't read the emailer's message. Deficits aren't the issue, or won't be if Dems come up with what they're promising -- a revenue neutral (i.e., deficit-neutral) health bill.
The trouble will be who pays higher taxes or sees cuts in services or payments. Do we want to shift $1.6 trillion in resources to health care? Where will we shift those resources from? Those are the questions we need to answer.
Marc--with all due respect, you and your "smart health care observer" are completely wrong. The REAL STORY is that universal health care is dead. It died when the CBO released its estimates on the HELP and Finance Committee bills. Universal care, with a strong public plan, is unaffordable because Democrats lack the political balls to do the heavy lifting on cost containment, and, to a lesser extent, revenues. There is little chance of them taking on the private insurers by creating a public plan and giving MedPAC real teeth to enforce cost containment. And there is ZERO chance of Democrats taking on the AMA, the AARP, the hospitals, etc., and cutting Medicare and Medicare Advantage to the tune of $300-$400 billion over ten years, what is probably needed to make the numbers work. ZERO. None. Nada. Zip. They will tax employer-provided benefits, but only above a generous cap, thus providing nowhere near the revenue needed from that stream. And 'taxes on the rich?' Whatever. I'll believe that when I see it.
Yet, they have to come up with something, or they'll be embarrassed. What's the answer? Kabuki theater bullshit dressed up as reform. Some kind of individual mandate that requires people to purchase bare-bones private plans, subsidized by the feds with whatever funds Congress can raise and still get away with politically. That number is WAY below $1.3 trillion. It's more like $600 to $800 billion, and that's stretching it. That's why you see Max "Profile in Courage" Baucus running around insisting that "reform" will absolutely, positively, definitely cost leas than $1 trillion.
So let me get this straight, Marc: you post a reader email that effectively debunks the "$1.6 trillion" myth, and then you go on to talk about whether or not it's "worth an additional $1.6 trillion" to fix health care?
Weak.
Marc, gimme a break. The numbers are astronomical, no matter whether they've been estimated down to the last dollar. Would appreciate some analysis from you. All I see are your desperate attempts to backstop whatever Pres. Obama wants.