Thursday, February 11, 2010

Obama Budget Built on Faulty Health Care Assumptions

Via Instapundit

Andrew Briggs at The American writes the Obama administration is the first in recent history to ignore Medicare Trustees' projections for healthcare cost growth.   This seems surprising for an administration that spent the entire first year talking endlessly about long term health care costs.  Well it would certainly be surprising if Medicare Trustees' projections supported the administrations' narrative.  Guess what?  The projections seemed just a tad too rosy/not dire enough to help make the claim that health care reform was necessary to deal with looming defiicits in the entitlements.  Evidently this is not the first time the administration has ignored independent analysis that doesn't support their agenda either.   I am shocked, shocked I tell you by that news:

The Obama administration’s fiscal year 2011 budget continues a pattern of ignoring independent analysis and rigging economic assumptions to meet political goals. For the first time by any administration in memory, the Obama budget forecast rejects the Medicare Trustees’ projections for long-run healthcare cost growth. The reason: the Trustees’ projections undercut the administration’s narrative that increased federal control over private sector healthcare could painlessly reduce Medicare and Medicaid costs. The Obama budget instead assumes long-term health cost growth at twice the rate projected by the Trustees.

The White House’s assumptions are factually implausible. Worse, they threaten to politicize the Social Security and Medicare Trustees, whose process for estimating entitlement costs has until now stood out for its lack of political influence.
How much does it matter that the White House ignores the Trustees' projections and fudge their own?  Actually quite a bit:
To what possible purpose could these changes have been made? The answer lies in the administration’s case for increased federal control over private-sector healthcare.The 2011 Obama budget, by contrast, assumes per capita health costs will grow at GDP plus 2 percent, double the Trustees’ rate. The effects of this change are staggering: the administration’s 2010 budget, which followed the Trustees assumptions, projected Medicare costs of 9.6 percent of GDP by 2080. The 2011 budget, which uses White House assumptions, projects Medicare will consume 22 percent of GDP by 2085.
By inflating the rate of growth of costs, the Administration, in effect, minimizes the role of the aging population on entitlement costs and assumes the problem lies in the private sector.  If they were able to contain costs by shifting control of the costs from the private to the public they would inevitably have to deal with the large number of retiring citizens anyway.  The White House doesn't want you to focus on that however.  They prefer you see that there is dire necessity to control costs above all else and only the government can do that, at least according to Democrats.  Unfortunately independent analyses predicted neither the House or Senate bills would actually bend down the costs, however.

 Perhaps just as troubling, since this White House consistently rejects analyses that doesn't support their narrative pressure is brought subtly on groups like Medicare Trustees to produce assumptions that support the White House.  It taints the process making all future analysis suspect instead of calling into question the real culprit here, a faulty White House narrative.  

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