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Let's Look at Healthcare Reform Basic Math

The CBO has done a good job of attempting to analyze a unanalizable problem, to determine the cost of entitlement program out 10 years from now.  Clearly the numbers are daunting, $1.6T or less, depending on the level of mandates for coverage and what level of coverage.  It seems reasonable until you realize that the percent increase out a few years is something around or less than 10%, according to the CBO.

Even with the CBO analysis the outlook is unsustainable with Obamacare.

Is a 10% increase in healthcare the logical, intuitive result of adding 16% to the healthcare coverage population, adding all of the entitlements that are included, and making Medicate and Medicaid more expensive in demand?   The error in the CBO forecast could be dramatic

Let's look at how well did the government predicted the cost of Medicare, in this video: 

Clearly this amount of error made in the forecast of the cost of Obamacare would result in a complete take over of the healthcare industry, degraded care, and a near complete destruction of medical R&D.  So the risks here are great.

To gain some measure of the specifics, perhaps some other numbers are in order.

Spending with the House BillSince Medicare is growing by nearly 100% in number of beneficiaries, one could add as far as demand and cost shifting a measure of this increased demand.  Also since the feeling of entitlement will grow and in a few years would drive the demand for health services up by at least 20%. 

Could the result for the hypothetical year of say 10 years from now be an increase as follows:  (without inflation)  (Note: this is a calculation of the demand possible, and is not given as an estimate of the actual cost, but rather as estimate of the demand driving the cost.)

Future Medicare + Medicaid (w/o entitlement increase) = $1.27T x 2 = $2.54T  (2x is because of the forecasted increase in the number of Medicare recipients, plus a crude estimate in the number eligible for Medicaid.)

Future cost of the remaining portion of the population (w/o entitlement increase) = $1.43T  (since the number in the remaining portion, beyond Medicaid and Medicare, of the population is the same, due to the number added of uninsured folks equaling the number added to Medicare and Medicaid.)

Subtotal = $4T before the entitlement costs.  If entitlement adder is 20%, which seems low.

Unconstrained demand would equal $4.8T per year ($4 x 1.2) total healthcare demand

The CBO forecasts something close to $3T, in today's dollars. 

So the error resulting is (4.8-3)/.25 = 7.2X.

So do your own math, and ask the question how is the cost going to be contained in this or your scenario, over the coming decades.  It will be constrained by price controls and rationed care, just as it is in every other country with this strong sense of entitlement.

This simple analysis is hard to argue away, and the resulting conclusion is that the only viable reform is one that drives down costs using a market solution.   Obamacare clearly does not affect costs except to increase them.