Paying a Premium for Insurance

How much would it cost in 2018? Kaiser Family Foundation data on employer-provided health benefits (which tend to cost a lot more than policies purchased by individuals) indicate a recent premium growth rate of 5 percent a year, which would make $2,000 in 2007 about $3,400 in 2018, a little more than half what the House bill would spend to insure one person. Even if premiums double during the next decade (as they did during the last decade), simply buying insurance for 37 million people would still be about one-third cheaper than the subsidy scheme created by the House bill.

Also keep in mind that government spending, especially on health care programs, tends to be much higher than anticipated. "When Medicare was launched in 1965," note Cato Institute policy analysts Michael Tanner and Chris Edwards, "Part A was projected to cost $9 billion by 1990, but ended up costing $67 billion. When Medicaid's special hospitals subsidy was added in 1987, it was supposed to cost $100 million annually, but it already cost $11 billion by 1992."

The subsidies championed by Obama would only aggravate the problem of runaway government spending on health care. "In the legislation that has been reported," CBO Director Douglas Elmendorf told the Senate Budget Committee last week, "we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs."

The bill does have a great name, though. In the spirit of the spending binge that Obama dubbed a New Era of Responsibility, it's called America's Affordable Health Choices Act.