President Obama has proposed a multi-trillion dollar plan to revamp health care to the alleged millions of people who are not currently covered. He claims that his plan would reduce individual costs by $2,500 per year although you may still carry your own private plan (See Barack Obama and Joe Biden’s Plan to Lower Health Care Costs and Ensure Affordable, Accessible Coverage for All).
Obama's plan claims that “Inefficient and poor quality care costs the nation $50 to $100 billion every year. Billions more are wasted on administration and overhead because of inefficiencies in the health care system.” In the same article, Obama touts that his administration will “invest” $10 billion a year over the next five years for electronic systems. He claims that he and Joe Biden under Obama-Biden, LLP will “support providers to put in place care management programs and encourage team care…through home type models…” He will “require hospitals to collect and publicly report measures of health care costs and quality…”
These and a whole host of other regulations make up the Obama program for health care delivery, malpractice cost reduction, enhanced research, reduced anticompetitive actions, and affordability of health care for all. With all this in mind, Obama's website, www.barackobama.com, proclaims, “I am asking you to believe.” What this adds up to is a great leap of faith on the part of the public. Curiously, this is the same mantra Jimmy Carter used to ascend the steps of the White House. He got booted four years later.
Business forecasts are always uncertain and depend heavily on numerous variables: economic conditions, markets, competition, available capital, and so on. Experienced executive managers engage in such forecasting and strategic planning regularly and still shake their heads when their forecasts fail to come to fruition and Wall Street gives them a negative rating. Many still need to re-address their forecasts even six months later after noting devaluation of their stock. Some boards show CEOs the door as a result of poor performance and missed forecasts.
The question then arises, “What makes Barack Obama, a man with no experience in managing a business and no successful business model on which to rely, think he can successfully implement a strategic initiative for over 300 million people over a decade while reducing costs and increasing productivity? I doubt that he has even read a financial statement or even knows how to interpret one.
Obama suggests his ignorance when claiming he will be “investing” $10 billion in electronic systems. Investment under its standard usage in the private sector suggests a return and a profit. Yet he claims that he can do better over a nation than most executive managers can do in managing a much smaller corporation. What he really means is “consumption” and “expenditures” and not investment. What is the source for his “investment”? The federal government is not in the business of turning a profit, and normally investment derives from working capital of which the major source is profits from sales. Are we to “believe” in ignorance to guide such a large strategic initiative with an entire nation? The answer is obvious.
Obama's claim of $10 billion per year over the next five years does not represent the total costs of his plan. It is only for electronic systems management. The real costs are completely uncertain, especially when it encompasses a nation as large as the United States. The projected costs for the entire strategic initiative are in the trillions of dollars all of which must come from taxpayers since the government cannot turn and earn a profit or show a return on investment. Consequently, these trillions of dollars represent a huge tax increase on every individual. The Congressional Budget Office in its June 15, 2009, report to Senator Kennedy reported that the federal deficit would increase $1.3 trillion for health care coverage alone from 2010 - 2019. This does not include an additional deficit spending on health care of $60 billion over the next 10 years for tax credits for small employers.
Another question arises concerning cost savings. Where are they? If this strategic initiative is going to cause a federal deficit of over a ten year period, the costs to the taxpayer will skyrocket. How will Obama-Biden, LLP deal with the huge leap in deficit spending on top of the normal deficit spending already projected of $1.3 trillion annually for other operations of the federal government? How will costs skyrocket? Taxpayers are footing the bill for the entire federal budget as well as state and local governments.
The deficit will also require the government to enter into greater debt financing and the printing of money to finance the budget and health care. The other alternative, which Obama-Biden, LLP has already explicitly declared, is raising taxes. He will be raising corporate taxes, individual taxes, and commodity taxes. However, tax increases will hardly be sufficient to offset the projected deficits. This leaves the greatest hidden tax--a cheaper dollar and consequent inflation. Inflation eats into individual disposable income by causing prices on all goods and services to increase. Given the deficit picture over the next ten years, this inflation will be exponential and double digit. You and I will be contributing to financing this huge health care program.
The costs of taxes and inflation are the hidden price of health care not included in the Obama-Biden, LLP plan. He only counts out of pocket premiums and co-pays. Our pockets will be hit in two ways for paying for health care: directly as we seek treatment and indirectly as we pay a higher rate of taxes on income and commodities (for example, alcohol, sugar products, tobacco, food products, services, and so on) and see inflation shrink our disposable income. Therefore, the real price we pay will be more than our annual premiums and co-pays. Obamasurance does not include his tax levy and cheaper money into its price to us.
The formula below represents the real price that you will pay for your health insurance:
Premiums + Co-pays + Income and commodity Taxes + Inflation = Total insurance costs
This is only the financial picture of Obamasurance. It does not include reduced service and selective treatment (rationing of health care) to attempt to trim costs. It will also not include the scarcity of doctors to serve a greater number of patience. As Obamasurance assumes greater control, the federal government will also control physician salaries, driving them out of the market. Individuals will be discouraged from pursuing medical degree because their potential for income will no longer be attractive as they recognize the expense it will take to become a physician.
Are you ready to take Obama’s leap of faith? Perhaps it is time to tell Obama-Biden, LLP to take a flying leap through the exit door of the White House before it is too late.
