Wednesday, October 01, 2008

No such thing as free health care

The following is from the Wisconsin Club for Growth newsletter:


Last year, Wisconsin Senate Democrats rammed a $15.2 billion universal government-run health care plan into the state’s budget (dubbed “Healthy Wisconsin”). As a “compromise” for pulling it out, Governor Doyle created a new program, called “BadgerCare Plus,” which would expand government health coverage to thousands. Doyle pitched the plan as “revenue neutral” – one of the many times you’ll hear that a program “pays for itself.”

Now, we’re finding out that the program didn’t quite pay for itself. In fact, due to over utilization of the plan, the tab will increase by an estimated $25 million more than Doyle expected. And given government’s proclivity to underestimate health costs, the number will go up from there.

In fact, when the initial BadgerCare program was created, the unexpected costs told the same story. In Fiscal Year 2001, the first full year of BadgerCare’s operation, the Legislature spent $129 million in all-funds revenue. By Fiscal Year 2004, merely three years later, that number had nearly doubled to $205.6 million.

Underestimating health care costs isn’t exclusively a state problem. According to Michael Tanner of the Cato Institute, in 1967, the House Ways and Means Committee predicted that Medicare would cost $12 billion in 1990. In reality, the program cost over $110 billion that year. In 1987, Congress estimated that the Medicaid Special Hospitals Subsidy would reach $100 million by 1992. The actual cost exceeded $11 billion.

This is the most significant flaw in the argument for Healthy Wisconsin – the claim that a government takeover of health care will actually keep costs down. The evidence shows that when the more government takes control, the more costs explode. \"Free\" health care draws people like moths to a light. And taxpayers are left to foot the bill.