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March 25, 2010

Oh, My: Another Case of Democratic Double-Counting is Going to Raise the Costs of ObamaCare By Billions and Billions

I don't know how many billions yet, so I went with Carl Saganesque vagueness.

Here's the skinny: The government used to offer corporations a subsidy to provide Medicare Part D prescription drug coverage plans to their employees. Why? Well, because businesses could offer the plans more cheaply -- it would cost a business only $665 per person to provide the coverage, whereas if those people were getting that coverage through Medicare, it would cost nearly double that.

So the subsidy was in fact a net-cash-winner -- by shelling out some money to induce businesses to provide the coverage, we avoided the additional costs of Medicare having to provide it.

So: Obama and the Democrats need some fake "savings" to claim their bill is "reduces the deficit." What do they do? They cut the subsidy.

On paper, gee, that saves money. But in the real world, that induces corporations to stop playing ball, stop offering Medicare Part D coverage, and dump those employees and retirees into Medicare again, costing the government even more money. Verizon just signaled it will likely be doing just that.

Other corporations will follow suit.

Upshot? They scored this cut as "saving" $5.4 billion. Not only won't it "save" anything, it will wind up costing additional billions as corporations dump their costly retirees into expensive government coverage.

If you like your insurance, you get to keep your insurance. And, PS, if you like me not coming in your mouth, you get to keep me not coming in your mouth. Swearsies.

PPS: Ooops.

Thanks to StarChamberMaid.

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posted by Ace at 02:14 PM

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