When I read Paul Krugman's New York Times column last Friday, my jaw dropped. Among other amazingly obtuse things he said was this: "Which brings me to the third myth: that health reform is fiscally irresponsible. How can people say this given Congressional Budget Office predictions -- which, as I've already argued, are probably too pessimistic -- that reform would actually reduce the deficit?"
And how does it reduce the deficit? By upping federal taxes, pushing more Medicaid costs off on to the states (where it will also increase taxes, but the CBO doesn't care about state taxes), and by cutting federal funding for Medicare by $500 billion over 10 years.
Plus, by limiting some of the much-despised treatment denial practices, it will push the price of private policies higher, above where they would otherwise go, enabling yet higher profits for insurers. But the CBO cares not about what happens to policy costs they too are outside the federal budget, which is all it examines.
So the total national healthcare bill, federal, state, and private, will be bumped up considerably by Obamacare. It "reduces the deficit" only because it raises federal taxes, cuts Medicare funding substantially, and pushes many costs off to states and private policy holders.
For what? All so the federal government can throw a much needed lifeline to the health insurers. It will protect health insurance company profits by guaranteeing them tens of millions of new customers, sending them $500 billion directly as a dole from the public till, and letting them sell yet higher priced insurance for yet greater profits.
How can all this be missed by a Nobel-prize winning economist?
And why doesn't Krugman discuss the incredible 45% markup (over the cost of actual medical treatments) imposed by the healthcos? (They don't get all of it some is the cost they impose upon providers who must hassle with them for payments.) It is just plain huge compared to any other kind of insurance.
What "value add" do they deliver for that markup? None except for risk-spreading, worth maybe 3%.