Health Care

Biden's $6 Trillion Budget Plan Is Even More Expensive Than It Looks

The White House chose not to include cost estimates for a number of big-ticket health care policies—while still expressing support for them.

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There is little debate about what President Joe Biden's recent budget proposal represents. The headline figures speak for themselves: $6 trillion in federal spending this year, rising to more than $8 trillion in a decade, with deficits totaling at least $1.3 trillion every year in the process. It's a budget plan that The New York Times—in a news article, not an opinion piece—recently described as a call for "a permanent increase in the size of the federal footprint on the U.S. economy" and "an attempt to expand the size and scope of federal engagement in Americans' daily lives." 

Biden's budget plan is a proposal, not a law, and it has not been passed by Congress. But it is a vision of America's fiscal future in which a substantially expanded federal government is at the center of much of everyday life. And if anything, its vision is actually more expansive than the headline figures represent. 

That's because Biden's budget includes rhetorical support for a number of policies that it leaves out of its cost estimates. In particular, it expresses support for expanding Medicare, already among the most costly federal programs, by adding new benefits and expanding eligibility options to people as young as 60. 

It also calls for the creation of a "public option"—a government-run health plan that would be sold alongside regulated private insurance plans on the health insurance plans created under the Affordable Care Act, also known as Obamacare. 

Some reports have framed this move as Biden leaving out the public option, frustrating progressives who have long supported the creation of a government-run insurance plan. But while it's true that neither the public option nor the expansion of Medicare are included in Biden's budget estimates, I think this is not quite the right way to read the president's budget.

It's not that Biden left these health care expansions out of his budget. It's that he included them—without detailing how they would work or how much they would cost. Biden's budget is an attempt to push for these policies without having to wade into the sure-to-be-controversial policy mechanics or additional budgetary costs they would entail. 

Biden's budget plan doesn't just vaguely suggest that expanding Medicare and creating a public option might be nice. Instead, in a paragraph that opens with an explicit call for Congress "to take action this year to further strengthen health care" by "expanding and improving health coverage," it declares that expanding Medicare, creating a public option, and a number of other health care policies are all part of "the President's health care agenda." 

The Biden administration said in advance of the budget's release that several major health care initiatives had been postponed, and the budget wouldn't "propose new initiatives," and that's true enough in some technical sense. 

But the clear expression of support means that these are, in effect, off-budget policies. But they would have a significant impact on both the budget and the delivery of health care services. Biden just won't say what that impact would be. 

Biden's reluctance to specify how either policy would work goes back to his campaign. As the Kaiser Family Foundation recently noted, Biden's campaign proposal to let people aged 60–64 use Medicare leaves out many details: "Important policy design features have yet to be specified, including how it would be financed or administered." Put a little more bluntly, there isn't actually a plan here. But there is little doubt that adding millions of people to Medicare would increase total federal health care spending.  

Similarly, Biden has declined to provide much in the way of specifics for how a government-run health insurance plan might work. Some analyses in the past have suggested that a public option might reduce the deficit. But such analyses also assume that the public option, like Medicare, would pay health care providers much lower rates than private insurance. Yet paying lower rates inevitably threatens patient access to care, especially at rural hospitals that serve poorer populations. 

That helps explain why it's been politically difficult to make such plans work: Several years ago, Democrats in Washington state attempted to set up a state-run public option with rates close to Medicare's. It only passed after the rates came up. 

A recent paper by a trio of policy analysts at the Hoover Institution, meanwhile, found that depending on how it was implemented and which taxes were used to offset the cost of the program, a public option could end up becoming the third-largest federal program, and running an $800 billion deficit over its first decade in operation. And because Congress would have control over the health insurance premiums charged by a government-run plan, it's easy to imagine that lawmakers would come under significant pressure to cap or otherwise limit increases to those premiums—offsetting the difference via additional taxes or deficit spending. 

The point is that all of this is contentious, and any actual plan would inevitably spark significant debate and opposition from a wide constellation of interests. But Biden didn't want to have those debates or answer specific questions about his policies, so he tried to have it both ways, backing some major policy initiatives while pointedly declining to say how those initiatives would affect the budget. Which means that Biden's expansive, expensive budget plan—his vision for the federal government's fiscal future—is probably much more expansive and expensive than even the big headline numbers look. 

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  1. You wanted this, Mr McArdle.

    1. One of the Volokh Conspirators said he would vote for Biden because Trump spent too much. It was a sorry excuse then. I wonder what he thinks now? I don’t remember which one it was.

      1. http://ace.mu.nu/archives/394098.php

        Tim Pool connects the dying economy to the insane rush by the wealthy, US corporations, and foreign interests to buy up US real estate to astonishingly high values, all but leaving home ownership out of the reach of what was formerly called the American middle class.

        Back in January, the dollar was already losing value, and some analysts forecasted that the dollar would ultimately lose over one third of its buying power in the then-future.

        So the dollar is crashing, and you can’t buy a home without offering hundreds of thousands of dollars above its asking price and freeing the seller from any warranties or rights to inspection.

        One obvious conclusion: the smart money — the Big Money — knows that a huge crash is coming and they’re buying up land, because it’s historically held its value in a recession (or depression) better than alternatives.

        Boy, that moderate, centrist Democrat relentlessly promoted by NeverTrump as a conservative-leaning decent man is sure doing a hell of a job.

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        1. notice the false cause and effect. The Left are spending us in a hole butblame corporations.

          They rant about Capitalist health care being a failure but OBAMA CARE OWNS THIS MESS!

          IOW theyre insane

  2. Who could have possibly seen this coming?

  3. Once you factor in the impact of Trump’s mean tweets to the deficit, it becomes obvious that Biden was the fiscally responsible option and the Reason staff is not comprised of morons.

    1. Tweets DO cause Inflation after all!

  4. It would be halarious if the public option could only be used a VA hospitals

  5. 1.3 trillion? But a small increase over the “small govt” Republicans/Trump who pushed it from 500 billion to over 1 trillion (before covid- you know, to finance those much needed tax cuts that went to the wealthy.)

    1. to finance those much needed tax cuts..
      Too funny.

      1. It’s fucking dip wad Tony; I’m muting it, too.

        1. Tony and raspberries never post an actual thought they just exist to inflammatory comment back when their own thoughts tell them they are geniuses

        2. You mute anyone who doesn’t suck Republican cock.

          That basically makes you a failed human.

    2. Fuck you, cut spending.

      1. they are! They increase the Budget and call it a spending cut.

    3. The amount of soul selling you have to do to be this disingenuous and obtuse is just remarkable. I really hope you are at least getting paid to shell out this amount of garbage.

    4. What separates a lefty from a normal human being is an excessive amount of gall. No normal human being would have the gall of a lefty, who criticized the President for creating deficits.. ( The President can only propose a budget. He cannot force the Congress to accept it.)
      The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. President Trump submitted a budget each year that would have reduced deficits but Democrats refused to vote to pass a budget without their earmarks for hundreds of billions being added then threatened to shutdown the government and blame it on the President if he would not sign it. Then a lefty will parrot the TCJA only gave the wealthy a tax cut which is a lie because the cap on SALT actually raised taxes on the wealthy. The Democrats have voted to repeal the cap on SALT 3 times including last February when it passed the House buried in one of the economy killing, deficit exploding bills that AOC and Bernie voted for. Tax revenue has increased every year since the TCJA passed but facts never get in the way of a lefty parroting the propaganda and lies that tell him what to think.
      Is it any wonder they voted for ol joe?

  6. Yeah, 12 trillion in spending looks about 50% smaller than it is when you don’t count 6 trillion of it. (2 trillion for more bailouts to fix the damage caused by the lockdowns, 2 trillion to solve the community college affordability crisis, and 2 trillion to repair the ever-crumbling infrastructure).

  7. Why don’t the Washington politicians just make it an even quadrillion and be done with it?

    1. Go big or go home.

      1. If you are going to fuck something up, do it in such a way that people will forever wonder how you did it.

  8. “a permanent increase in the size of the federal footprint on the U.S. economy”

    “imagine a boot stamping on a human face – forever.”

  9. Suderman, you picked your side. Try staying on it.

    1. Yeah how is that orange man bad working out for you and the other Reason cucks.

  10. Derp liberaltarian hates printing money. OK so back to the gold standard and get rid of the fed, right? That’s a winning strategy to get elected.

    1. What’s the point in getting elected if you have to be objectively wrong to do so? You do not get out of a hole by digging. Electing someone who digs faster or slower is irrelevant. Digging slower does not increase the appetite for ladders. If nothing else, Biden is doing a bang up job of crashing this plane with no survivors so hopefully there will be no mistaking the problem in the next generation and they might finally turn around and do something about it. Pain and suffering and death are going to be required to teach society about the perils of bad ideas. Better to get it over with quickly than to drag it out.

  11. “ with deficits totaling at least $1.3 trillion every year in the process”

    Hahahahahahahahaha. Anybody with half a fucking brain should know that number is utter and complete bullshit. The fed.gov took in 3.8TT in 2019. There is no way they’re raising another 2 trillion. Especially not without raising taxes on middle class earners.

    https://www.thebalance.com/current-u-s-federal-government-tax-revenue-3305762

    (I’d just like to point out to all the zomg tax cuts!!!1!1! retards that revenue has gone up every year since those cuts were passed so it’s pretty fucking obvious that we have a spending problem not a revenue problem.)

    1. Yes but you, in contrast to Biden and Pelosi, have a brain whats not turned to Pudding.

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  13. Biden has declined to provide much in the way of specifics for how a government-run health insurance plan might work.

    Doesn’t need to. It’s not really an Overton window – but every economic shock/recession proves how utterly incapable the existing employer-based medical system here in the US is at providing access to the medical system. It’s stunning to watch the health care politics of 1992 recession (Hilarycare) and 2008 recession (Obamacare) and 2020 recession (Hairsniffercare) and for that matter 2002 (HowardDeancare)

    The R’s have no ideas themselves and thus are perfectly fine with a D idea with no specifics. They’ll pretend to oppose it if that gets some votes but will come up with new non-specific ideas to expand spending if that gets votes.

    ‘Libertarians’ have nothing but bad ideas and don’t remotely understand the difference between say Sweden v Somalia or Brazil re some ‘medical system challenge’ like a pandemic.

    So that leaves a huge vacuum for – wait for a recession and – well – ‘let’s do something anything’.

    1. Left asshole once again proves “stupid” is his operating mode:

      “…‘Libertarians’ have nothing but bad ideas and don’t remotely understand the difference between say Sweden v Somalia or Brazil re some ‘medical system challenge’ like a pandemic…”

      Stuff you *PANIC* flag up your ass, stick first, and sit on it, lying pile of lefty shit

    2. Here’s a great idea: How about just not doing anything? No government action needed at all. People want medical care so they’ll buy it even without government intervention and they have money to spend so the industry will be there to sell it to them.

      But the people NEED medical care! What if they can’t afford it? You’re condemning the poor to die!
      People don’t NEED medical care. Human beings need, in order: Air, water, food, shelter, and to a lesser degree sex. These are the things you NEED. Food is largely left to the private market and somehow obesity has become a problem of the poor because it is so cheap and so ubiquitous. Poor people have medical needs and a market will exist to sell them medical care at a price they can afford, because otherwise it would go out of business for lack of customers.

      But that medical care won’t be as good as a rich person’s medical care!
      So? Do you think destitute people get medical care as good as the rich do today? All our current regime does today is make things more expensive and difficult to obtain.

      1. Here’s a great idea: How about just not doing anything? No government action needed at all. People want medical care so they’ll buy it even without government intervention and they have money to spend so the industry will be there to sell it to them.

        Yeah great idea. It’s why you people will always keep losing. Because you will always get blindsided by – the next recession. When people lose their jobs and lose their health insurance and will thus be forced into the individual market where no anticipated medical care (aka pre-existing conditions) will be covered. And hey let’s throw a new wrinkle in this time – a pandemic.

        The reason political support for a solution to this grows every fucking recession like clockwork is because ‘the market’ doesn’t solve this. The reason you and your broken clock ilk remain irrelevant is because these are precisely the times when it is obvious that you are a broken clock (v the two minutes per day when the clock happens to be right).

        1. “….Because you will always get blindsided by – the next recession. When people lose their jobs and lose their health insurance and will thus be forced into the individual market where no anticipated medical care (aka pre-existing conditions) will be covered. And hey let’s throw a new wrinkle in this time – a pandemic…”
          Yeah, you pile of lefty shit, let’s throw in a manufactured ’emergency’, manufactured by the assholes like you whining for the government to do something.

          “…The reason political support for a solution to this grows every fucking recession like clockwork is because ‘the market’ doesn’t solve this…”
          Assertions from cowardly left6y assholes =/= evidence or argument.
          Fuck off and die.

        2. Is that why millions starve to death every time there’s a recession? Because of the lack of food insurance? The mistake you make is conflating health insurance with healthcare. People don’t want health insurance they want healthcare, and the only reason we’re in this mess right now is because we’ve created a system whereby the only way to purchase healthcare is via health insurance and it is madness. Dismantle the tax incentives to employer insurance and we can move back to a simpler system where for-profit businesses produce goods and services and customers buy them on the open market at competitive prices.

          1. You ars a LIAR.

            “whereby the only way to purchase healthcare is via health insurance and it is madness.”

            Liar.

            I bought ON MY OWN an 80/20 major med policy for $86 a month with a 5K deductible then saved the money the Governments COBRA was biting me for ($ 860 a month) for expenses.

            It didnt take long to save 5K.

          2. Is that why millions starve to death every time there’s a recession? Because of the lack of food insurance?

            Markets don’t fail re food. They do fail re access to medical care.

            And I agree completely that health insurance is not health care. ‘Health insurance’ is in fact more comparable to ‘the taxes imposed to pay for medical care’. And in fact a tax-based system can ‘price’ a far wider range of market values for medical services that a true free market would do for other goods but can’t for medical.

            eg – Bezos gets admitted to ER and needs an emergency heart transplant within one hour. What price is he willing to pay? If the answer is – pretty much everything he owns then dingdingding that is exactly how markets work re pricing. But not insurance.

            No time to consult Dr Google. Or Dr Liposuction here in the comments threads at Reason. So what is the price

            1. As an aside – our medical training/delivery system was actually designed for the scenario I describe above re Bezos. When Carnegie and Rockefeller were in their late 60’s they hired a guy named flexner to ‘reform’ our medical system. 1910 or so. The result was a complete regearing of doctors towards specialists and away from GP’s. Half the medical schools back then closed because the donor class decided to fund only the ones that went along with the reforms. It’s why we have only MD’s (the designed curriculum) and DO’s (the one non-MD training then that adopted that reform).

              It was geared entirely around specialists working in hospitals and practicing their scientific craft on peasants and rats. So that when the poobahs got sick they could go to the front of the line with the best specialists ready for them. The difference between then and now is that back then that class paid EVERYTHING. They built the hospitals, paid the doctors, bought the equipment, etc.

            2. I’m genuinely curious how you think markets fail to deliver medical care. Are you saying that medical care demand is inelastic and the market can’t figure that out?

              1. Moral hazard

                Asymmetric information (esp re specialists)

                Market power that is extremely unstable at different points in a single transaction and that does not tend towards equilibrium

                Time horizon of ‘lifetime cycle’ of medical care is longer than the time horizon that individuals can really understand or that corporations/providers can both manage and remain accountable to consumers/patients

                The distribution of incurred medical costs is extreme (roughly 5% of the population incurs 50% of spending), and persistent (meaning once someone starts incurring expenses they are likely to also become disabled and unable for awhile at least to earn an income to pay the costs), with death (and thus nonpayment) as the certain outcome for a big chunk of total lifetime expenses.

                Significant fixed costs v variable/marginal costs – which always gets mispriced by market the nanosecond interest rates and capital costs are manipulated

                No one has ever figured out a way for market to price preventive care even though the attempt has been made for hundreds of years and it is, by far, the way that total spending goes down. IOW – it ain’t really consumers or producers who control spending from within the market – but from outside the market.

                There’s more too. But this is all just a waste of my time isn’t it.

                1. No, no. It’s not a waste of your time at all. Do go on. It’s fascinating listening to you figure how humans are too stupid to plan for their own expenses. Whenever anyone talks about applying a free market to medical care the emergency heart transplant or traumatic accident example always gets trotted out and it’s baffling because, on the whole, trauma care is deminimus in the healthcare industry. Hospitals don’t even do a measurable fraction of their business on actual emergency work. Emergency rooms are clogged mostly by people seeking non-emergency medical care who cannot legally be turned away, but even that’s a small portion of what is spent on healthcare. Prescription drugs, outpatient services, therapy, and nursing homes together make up the overwhelming bulk of all US healthcare spending. These are people who are perfectly capable of deciding how much they want to spend on healthcare and have plenty of capacity to shop around. Will some people not be able to afford the best care? Of course, but someone will be out there trying to offer the most cost efficient care they can because customers are smart enough to get the best healthcare they can for the dollars they have.

                  with death (and thus nonpayment) as the certain outcome for a big chunk of total lifetime expenses.
                  Health insurance actually makes this phenomenon worse by guaranteeing payment of unlimited care for doomed patients. Am I saying sick people should just give up and die? No, farthest from it actually, I am saying that the person most capable of determining whether further medical care is worth it is the person in question. Your insurance company should not be in charge of how much care you “deserve”, only you and your own pocket book should.

                2. I don’t know if I agree with you, but I do appreciate you explaining your thought process and where you’re coming from.

                  It’s up to you to decide if that was a waste of your time.

    3. If lefties could think they would be dangerous. When you bring up Sweden as if it is a country that resembles the USA you only show how little you know or think. The USA already spends well above any other country on a “public option” called Medicaid and subsidized ACA. In America if you lose your job and go on unemployment you qualify for Medicaid and SNAP. You are being lied to and worse you repeat it as if it is real. Just 20 short years ago Americans did not think it was the job of the government to provide them with healthcare and 50 years ago they didn’t think the government should provide all the benefits people expect now. Even more shocking everyone paid their share of taxes. In 1980 the government took in just over 500 billion in revenue and in 2020 3.5 trillion in revenue. Are you enjoying all the benefits of that extra 3 trillion? Americans never wanted to be like other countries and our way of life is why millions want to come here. No other country is close to the number of migrants that come to the US. We have illegal migrants from 160 different countries coming in across our Southern border because of how we live and yet lefties are wringing their hands and whining. One thing is for sure. The woke lefties are teaching that “roots of white male culture” include traits such as “rugged individualism,” “a can-do attitude,” “hard work,” “operating from principles,” and “striving towards success”—which are “devastating” to women and minorities. They certainly don’t have to worry about the whining “men” with their hands out begging the government for handouts.

  14. Recall Milton Friedmans statement in Money Mischief.

    The Chi Coms promised to bail 1930s China out of their economic mess if people voted them in.

    They did. They crashed the currency…

    Learn from that. Its what Democrats are doing.

  15. I don’t even call him Biden anymore, I just call him The Six Trillion Dollar Man. Everything he does is good for another $6T.

  16. Don’t presidents always put up stupid budgets that congress ignores anyway? I detest the Biden administration and their interest in financially destroying the US, and relegating us all to serfs in socialist hell, but I don’t recall the last time the president’s budget was actually not dismissed outright.

    If congress accepts this as is, or one-ups it, we’re doomed.

  17. Federalize doctors. Pay them G-scale wages. This would lower prices and if you don’t mind snarly doctors it might be cheaper.

    1. Many people become doctors for the money and social status.

      Someone forgot to tell them that doctors are mere technicians in the traditional hierarchy, glorified plumbers, beneath professors, who are the highest rung below actual aristocracy (which is lacking in America).

      This creates a lot of alcoholic burnt-out doctors who have all the anxiety of a hard laborer, just with a lake house.

      Paying doctors less is probably part of a universal healthcare scheme that reallocates resources more efficiently. Just another lobby to get around.

      1. “Beneath professors”

        Hahahahahahahahahahahahaha

        1. You don’t get to just remake the traditional culture you claim to love so much because you have a fascist boner for anti-intellectualism.

          1. Says the racist Nazi.

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