As each new Democrat health care draft is submitted, the non-partisan Congressional Budget Office (CBO) returns another trillion dollar price tag. Tuesday’s cost prediction for the House’s new bill was no exception – weighing in at $1.04 trillion dollars. Why is health care reform so expensive? What is Congress spending so much money on?

Welfare. Massive insurance subsidies and an expansion of Medicaid account for the vast majority of CBO-scored costs. By 2019 these expenditures are expected to rise to $244 billion a year. That’s more than the federal government spent last year on Medicaid ($201 billion according to the CBO).
Meanwhile the costs are piled on top of small businesses and individuals making above $280,000 a year. Even with a draconian 5% income tax increase for the top bracket, the House bill’s surtax only raises $81 billion in 2019 – barely a third of proposed new entitlement spending for that year.
In the first blush of his health care reform drive, President Obama talked enthusiastically about how “investment” in health technology and comparative effectiveness reform would “bend the curve” of health care cost increases. Lately, Obama has stopped mentioning these programs in his speeches. He may have noticed either that they don’t cut costs or that they aren’t an important part of current health care legislation.
The old rhetoric has nothing to do with the reality of current reform proposals. Obamacare is not a visionary down-payment on future efficiency gains. It is a simple redistribution from rich to poor. Instead of lowering costs, it tries to hide costs from Americans with smothering subsidies that the CBO now predicts could derail the budget. The only cost it will save is on life-saving technologies that will never be invented because of stagnant growth and a less dynamic economy.
Americans want real reform. Extending the tax exclusion on health care premiums to individual insurance plans will introduce more competition into the health care market and drive innovation. Allowing individuals to purchase insurance policies across state lines will create regulatory competition that gives customers the protections that actually want. Discarding these very real options for a narrow class-based agenda is an abdication of the promises President Obama made to the American people and a disservice to the nation.