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Putting Obamacare's Launch in Perspective

October 01, 2013

By Avik Roy

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The common view of Obamacare among conservatives goes something like this. Prior to 2010, America’s free-market health-care system was the envy of the world. Obamacare changed all that; it is a government takeover of our health-care system, of one-sixth of our economy, one that will turn America into a European-style welfare state. That is to say, Obamacare is an existential threat to the American way of life.

If this is your view of Obamacare, then of course it makes sense to shut down the government in order to attempt to defund the law. What’s the point of maintaining a Republican majority in the House in 2014, let alone seeking a majority in the Senate, if the end result is the destruction of the American way of life?

It’s helpful, on today of all days, to look at the numbers, and understand the impact that Obamacare will have on the size and scale of government.

Let’s start with this: Over the next ten years, Obamacare will spend $1.9 trillion dollars in an attempt to subsidize health insurance coverage for 30 million people. By the end of the decade, this spending will exceed $200 billion a year, as illustrated by the chart below. That’s real money.

So how does this government takeover compare to what the federal government already spends on health care? In the chart below, Obamacare’s spending remains in blue, and pre-existing federal health spending, on things like Medicare and Medicaid, is in red

The government takeover of our health-care system took place in 1965, when LBJ signed into law the amendments to the Social Security Act that created Medicare and Medicaid. Obamacare is simply the cherry on top.

So what about those European welfare staters? Are we catching up to them in terms of government spending on health care?

It turns out that in 2010, prior to the enactment of Obamacare, U.S. government entities spent more per capita on health care than all but three countries in the world. Our government spent more on health care – $3,967 for every man, woman, and child in the country – than did Germany ($3,331), Canada ($3,158), France ($3,061), Sweden ($3,046), Belgium ($3,000), or Britain ($2,857).

Obamacare will, of course, pad our lead in this regard. But if our government spending on health care approximated that of, say, Sweden, we would be running a budget surplus instead of a deficit.

The conservative slogan on Obamacare has been “repeal and replace.” But that slogan has been an empty one on two fronts. Conservatives are not even close to being united on what ought to replace Obamacare, if anything. Ted Cruz spent 21 hours lambasting Obamacare on the Senate floor without spending any time on this important topic.

Even more importantly, Obamacare is only one part – and not even the largest part – of our health-care leviathan. Just because Obamacare is our youngest entitlement doesn’t mean that we should ignore the older and much larger ones, such as Medicare and Medicaid. And yet, in terms of our priorities and our rhetoric, we have.

Original Source: http://www.nationalreview.com/corner/360050/putting-obamacares-launch-perspective-avik-roy

 

 
 
 

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