Health care math

The Congressional Budget Office announced that the Senate finance committee's bill will cost $829 billion over the next 10 years while generating revenue of $911 billion over the next 10 years. The revenue will be from taxes, fees and penalties in the proposed legislation. This will result in a net deficit reduction of $81 billion. When I subtract $911 billion from $829 billion I get $82 billion. But I am not going to make a big deal of this, I'll attribute it to rounding down. What I do want to rant about is some of the assumptions used here. First, the CBO uses the estimates of the bill for the Cadillac tax, a tax on high cost health insurance plans. Many members of congress have labeled the insurance industry as profit motivated to the point of greed and avarice. (This is a vampire calling a mosquito a blood sucking fiend) What makes anybody think the insurers will not cut back on selling these plans and pass on the tax cost to the buyers who still purchase these Cadillac plans?
The CBO is the same agency that said on July 16,2009 that none of the proposed health care bills would do anything to bring down the curve in health care costs. See my earlier post on the same day for details. In less than 4 months a complete reversal in the impact of health care bills occurred? Wow, I'm impressed.(more sarcasm) Anyone who has suffered the mental torture of an economics class and can still remember any of it will tell you economists always add the caveat "all other things being equal" to anything they say. In real life this does not work, so I doubt that the $81 billion dollar savings will survive the next 10 years.
And another point, this is still proposed legislation, the finance committee will vote on it tomorrow then the process starts over again trying to get the bill signed by the Senate and then it will go to the house of reps. Remember what our wildcat house speaker Nancy Pelosi said? A health care bill will not pass the house without a public option. Let's hope Ms. Pelosi can adjust to the fact that most Americans do not want more government, especially government selling health insurance. More to come as this saga unfolds.