Obama’s healthcare plan offers hopelessness and change

Obama has unveiled his healthcare plan, which is expected to cost $130 billion per year by 2018:

WASHINGTON (Reuters) – President-elect Barack Obama’s plans to overhaul the U.S. health care system would cost the federal government $75 billion but would provide health insurance for 95 percent of Americans, consulting firm PriceWaterhouseCoopers said on Wednesday.

This works out to about $2,500 per newly insured person, the firm said in a report.

“The plan would increase to $1 trillion cumulatively by 2018 or approximately $130 billion per year,” the report said.

While the plan would extend health insurance to two-thirds of the 47 million people who currently lack it, the overhaul may worsen some problems, such as a shortage of primary care doctors, the analysis found.

“Unless costs are cut, growing health care costs will increase the costs of Obama’s plan dramatically over time and reduce the effectiveness of mandates. This could make the federal costs unsustainably high,” the report read.

“Because of the deficit and financial crisis, there’s unlikely to be any new federal money available, so health reform may require reallocation of dollars already in the health system.”

I’ll bet money that Obama’s plan will cost $130 billion a year well before 2018 — maybe even before the end of his first term. Take a look at Michael Tanner’s work on the ballooning costs of Mitt Romney’s universal healthcare plan in Massachusetts, and the appalling real-world consequences of rationing care under national healthcare systems like Canada’s (here, and here).

I don’t think it’s a fundamentally bad idea to have taxpayers subsidize care for Americans who otherwise couldn’t afford it, but that’s never really been what this is about. Of the 47 million uninsured in America, tens of millions can afford insurance but choose not to buy it, and perhaps millions more are uninsured only for brief periods of time. (See Tanner on this as well.)

It’s one thing to make a moral argument that we should all come to the aid of the neediest cases; another to say so while actually creating another massive, sprawling bureaucracy that subsidizes care for tens of millions of people who don’t need the subsidies, and costs a lot more than it’s worth to the vast majority of Americans. Tanner and his colleagues find that the average American pays only a small percentage of his medical costs directly (less than 10%, if I’m not mistaken?).

As medical costs continue to increase wildly — one friend tells me insurance premiums at his father’s company have gone up over 20% since last year — our government is doing everything it can to remove the few cost-control measures we have left. And because Obama’s plan will be pumping even more money into healthcare without adequate regard for where it would be best spent, we can all look forward to seeing our medical costs go up even more.

That’s not the change we need.