“Cheaper” Health Care Bill Not So Cheap, Actually

After the public uproar over a health insurance plan that was going to cost as $1 trillion (or $2 trillion or $4 trillion, but who’s counting?), the Democrats have put forth a new bill that claims to cost “only” $600 billion dollars over the next ten years.

The plan carries a 10-year price tag of slightly over $600 billion, and would lead toward an estimated 97 percent of all Americans having coverage, according to the Congressional Budget Office, Sens. Edward M. Kennedy and Chris Dodd said in a letter to other members of the Senate Health, Education, Labor and Pensions Committee.

Don’t let the lower numbers fool you. What the government has done here is not lowered the costs, but shifted the costs. To poor people, actually. How did they do it?

One way was to fine employers who fail to provide health insurance to their employees. But basic economics tells us that either a) labor will be more expensive and force employers to hire fewer employees (perhaps not such a good idea considering the latest jobs report), or b) employers will simply replace wages with health insurance, forcing employees to take a pay cut to enroll in a health insurance plan they probably don’t want.

So either way, employees — especially lower income employees — get to pay for Obama’s health care plan through more unemployment or lower wages.

You see, the original Obamacare plan went something like this: Obama and the Democrats wanted to claim that they created “universal coverage.” So they simply mandated that everyone — like it or not — has to buy health insurance. People who were too poor to meet this mandate would be given a subsidy.

But that turned out to cost the government way too much money. I think James Capretta captures the essence of what the Democrats did:

Democrats used to be sympathetic to the financial strain these workers are under. But that was before CBO said their sympathy would be expensive. So now the emerging plan is to make tens of millions of Americans pay more than they do today for government-approved insurance organized by their employer. That’s really their only choice. If they don’t take it, they will face a large financial penalty. Great deal, huh?

A great deal, but only for the politicians! They get to take credit for universal health coverage with lower costs and no obvious tax increases. What a terrible deal for us.

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