NCPA - National Center for Policy Analysis


March 2, 2009

Ignored by the forces that want to impose a national system on the country, and relevant to the conversation, is government's role in the exploding cost of health care, says Investor's Business Daily (IBD).

Decades of encroachments -- Medicare, Medicaid, the State Children's Health Insurance Program, etc. -- have resulted in the government owning 47 percent of the health care system.  With that much of the market, says Investor's Business Daily (IBD), Washington cannot deny its role in driving up costs.

Medicare lost control of its purse from the start and has never recovered, says IBD:

  • Between 1966, its first year of operation, and 1980, costs doubled every four years.
  • In all but a few rare instances, Medicare's annual costs have increased faster than private insurance costs; and the trouble is only just beginning.

The hospital insurance portion of Medicare is now paying out more in benefits than it receives in tax revenues:

  • By next year, outlays for all parts of the program will exceed income.
  • The Hospital Insurance Trust Fund will be exhausted by 2019.
  • If nothing changes, Medicaid eventually will have $36 trillion in obligations that it won't be able to pay under the current arrangement.

The funding gap gets so big, Congress would have had to deposit $80 trillion in an interest-bearing account last year to meet Medicare's eventual obligations.  The $700 billion Congress spent to bail out the financial institutions wouldn't cover 1 percent of the amount needed to bail out Medicare, according to Cato Institute calculations.

It's hard to fathom how anyone would suggest that a government that has run a program like Medicare should increase its role in health care.  Democrats like to tax, but Medicare's mess shows they cannot tax enough to pay for their grandiose medical care plans, says IBD.

Source: Editorial, "A 'Down Payment' On Dysfunction?" Investor's Business Daily, February 27, 2009.


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