The Misleading Numbers Of U.S. Health Care Reform

The U.S. Senate passed its version of health care reform today as reluctant centrist Democrats were either bought of (Senators Nelson and Landrieu) or were able to get some aspects they didn't like removed (such as Senator Lieberman with the public option). The problem is that the House, where bills can pass with a simple majority instead of the 60% supermajority required in the Senate, passed a bill with a public option and without the payoffs to Nelson and Landrieu. The most likely outcome is that House Democrats will reluctantly agree to these changes.

Supporters of the reform argues that it will really not cost that much. Yet these numbers are misleading for two reasons:

First, as Ann Coulter and Jay Cost points out, the 10-year number is misleading because taxes will be collected during 10 years while benefits will be paid out only during the latest 6 years. But during later decades taxes and benefits will both be collected all years, meaning that the costs will be much greater.

And secondly, Democrats double-count some tax hikes and budget cuts, causing the negative effect on the deficit to be underestimated, as James Pethokoukis points out.