So, the Democrats have gotten their legislation.\u00a0 They are promising:<\/p>\n
– Lower insurance premiums<\/p>\n
– Near universal health insurance coverage<\/p>\n
– Preservation of Medicare’s benefits<\/p>\n
– Reduction of the budget deficit<\/p>\n
– Lower medical costs<\/p><\/blockquote>\n
Since I am now petrified to put any of my long-term savings into the stock market, I need to find creative ways to boost my returns.\u00a0 So, here is what I’m willing to wager against anyone who wishes to bet against me.\u00a0 By the end of 2014:<\/p>\n
– Insurance premiums will be higher<\/p>\n
– The percent of America’s uninsured will fall far short of the target<\/p>\n
– Medicare’s benefits will be reduced<\/p>\n
– The federal budget deficit will be higher than currently projected<\/p>\n
– Medical costs will be higher than currently projected<\/p><\/blockquote>\n
My over\/under is that at least four of these five predictions will come true.\u00a0 If you’re particularly gutsy or liberal, then I will be happy to offer 2:3 odds that at least three of these predictions will come to pass, or take 3:2 odds that all five of them come to pass.<\/p>\n
To be more specific;<\/p>\n
– The national average for health insurance premiums per year is currently $4,824 per person and $13,375 per family; I am wagering that premiums for 2014 will be higher than those numbers plus the rate of inflation.\u00a0 Why?\u00a0 Because insurance companies will be required to accept all comers despite pre-existing conditions (just the kids, at first, then adults in 2014), which will increase their costs, especially in the individual market.\u00a0 Also, to the extent that mandates work to push more people into the insurance pools, greater demand will enable higher prices, notwithstanding the adverse selection that mandates are supposed to fix.<\/p>\n
– The bill is expressly designed to drive coverage from the current level of about 85% to “near-universal” level of 95%; I am wagering that the percentage of Americans with health insurance by the end of 2014 will be no higher than 88%.\u00a0 Why?\u00a0 As costs go up (see above), there will be less incentive for healthy individuals to obtain coverage, especially if they can get covered whenever they get sick, which will exacerbate the adverse selection problem insurers now face.\u00a0 The $695 penalties will be tiny compared to the $10,000 premiums, so you’d have to be a sucker to pay the latter when you can get away with just paying the former, and be guaranteed coverage anyway.<\/p>\n
– It’s difficult to quantify Medicare benefits; one indicator is the percent of doctors accepting new Medicare patients.\u00a0 That number is currently about 75% nationally.\u00a0 I predict that number will drop, even if Congress adopts the budget-busting repeal of Medicare cutbacks, i.e., the “doc fix,” that was hidden from this legislation to help it’s CBO score.\u00a0 Why?\u00a0 Because Medicare will have to suffer some kind of cutbacks in order to keep costs from exploding as much as they otherwise would, and because one of the cost-control measures is likely to be more bureaucratic hurdles for doctors to leap in an attempt to limit fraud.\u00a0 Both of these trends will continue to turn off doctors, especially the successful, experienced ones who don’t need Medicare patients to maintain their lifestyles (or sanity).<\/p>\n
– The fact that Congress will immediately make a mockery of the CBO score by adopting the “doc fix” is just one reason that the deficit will continue to climb.\u00a0 The Obama budget projects $2.1 trillion in deficits over the next two years.\u00a0 I am wagering that deficits will exceed that amount.\u00a0 Why?\u00a0 Congress has consistently underestimated the costs of its entitlement programs.\u00a0 This one, too, will be higher than projected.\u00a0 The higher taxes and fees that Congress is imposing to pay for this law will slow economic growth, resulting in disappointing government revenues.<\/p>\n
– According to HHS, the national health expenditures were about $2.4 trillion in 2009, or $8,000 per person, and accounted for about 16% of GDP.\u00a0 They have projected 6.1 percent per year growth over 2010 and 2011, which means the expense will rise to about $9,100 per person for 2011.\u00a0 I am betting that the total cost per person will be higher than that.\u00a0 Why?\u00a0 More money will be funneling into the health care system, which will drive up prices, just as student loan subsidies have driven up college costs.\u00a0 In addition, the regulations flowing out of the 2700 page law like topsy will increase the cost of our health care system, which will be reflected in the prices people will pay as both consumers and taxpayers.<\/p>\n
There you have it.\u00a0 Anyone with some liberal convictions and cash can put them both on the line here.\u00a0 Otherwise, this simply serves as a detailed warning for the time when those liberals will claim that nobody could have predicted how badly this law could have turned out.\u00a0 Just before they blame the insurance companies for the outcome.<\/p>\n