Healthcare Part 4/6

Another thing that must be taken into account when discussing yet another entitlement bill and the CBO score resulting from it is the history surrounding other programs' projected costs.

So, let's start with Medicare. In 1965, Medicare was supposed to cost only $12 billion a year in 1990. Actual spending for the 1990 fiscal budget year was $110 billion. That's a little over 9 times off.

In 1987, the new Medicaid DSH program was projected to cost less than $1 billion by 1992. Actual costs for that year were $17 billion! That's off by a factor of over 17.

In 1988, the Medicaid Home Care Benefit was supposed to cost $4 billion for the year of 1993. Actual cost for that year were $10 billion. That's off by a factor of 2.5 - their best performance.

And on to the last example - the Medicare Catastrophic Care Benefit. This one is even better. It was voted on, passed and signed into law. But... it was actually repealed before it could go into effect due to the CBO having to double it's cost estimate over night. They had not gotten all of the information (in this case, the projected costs for medication) when they made their first estimate!

Bottom line is, as Rudolph Penner said, "Any CBO estimate involving human behavior and social programs is very hard to figure."

Costs will go up, and Congress' response will be to throw more money at it, instead of pulling the plug while they can.