Analyzing the Gimmicks in Warren’s Health Care Plan

Six weeks ago, this publication published “Elizabeth Warren Has a Plan…For Avoiding Your Health Care Questions.” That plan came to fruition last Friday, when Warren released a paper (and two accompanying analyses) claiming that she can fund her single-payer health care program without raising taxes on the middle class.

Both her opponents in the Democratic presidential primary and conservative commentators immediately criticized Warren’s plan for the gimmicks and assumptions used to arrive at her estimate. Her paper claims she can reduce the 10-year cost of single payer—the amount of new federal revenues needed to fund the program, over and above the dollars already spent on health care (e.g., existing federal spending on Medicare, Medicaid, etc.)—from $34 trillion in an October Urban Institute estimate to only $20.5 trillion. On top of this 40 percent reduction in the cost of single payer, Warren claims she can raise the $20.5 trillion without a middle-class tax increase.

News Flash: Obamacare Did NOT Lower Health Costs

We interrupt this wall-to-wall coverage of the Supreme Court’s ruling to point out yet more evidence that Obamacare did nothing to reduce health costs.  Reuters reported yesterday on a report on health spending from the Organization for Economic Cooperation and Development (OECD):

Growth in health spending reversed a long-term trend of rapid increase and either slowed or fell in real terms in most OECD countries in 2010…Overall health spending grew by nearly 5 percent a year in real terms in the 34 countries…between 2000-2009, but this was followed by zero growth in 2010…The OECD also said preliminary figures for a limited number of countries suggest there was little or no growth in health spending in 2011.

In other words, the slowdown in American health care spending is nothing unusual – it’s happening worldwide.  And it is NOT occurring because of Obamacare; it’s taking place because of the global economic downturn.  Spending growth has been slower than projected NOT because Obamacare worked, but because the Obama “stimulus” didn’t.

What IS unusual about American health care is the growth in government spending on health programs.  The OECD found that “the health in total health spending in 2010 was driven by a fall of 0.5 percent in public spending for health, following an increase of over 5 percent per year in 2008 and 2009.”  So while other governments are reducing spending on health programs and entitlements, the United States – at a time of trillion-dollar deficits – is embarking on a $2.6 trillion coverage expansion.  It’s one more sign that under Obamacare, government spending really is doing fine.