Critical Condition

Murphy’s Law of Health Legislation

One of the unfortunate things I learned in government service is that the cost of government programs tends to expand beyond expectations, while the payfors — which is what government employees call the spending cuts or tax hikes required to pay for new programs — tend to bring in less money than expected. The Congressional Budget Office has recently noted this with respect to the House Democrats’ bill, as Yuval Levin ably pointed out last week. Yuval’s key point was that the costs of the bill would expand faster than the spending reductions required to pay for it, leading to exploding deficits in the proposal’s second decade. So we know this is the general tendency, and we know that it would apply specifically to the House bill, at least according to CBO. Now the Joint Economic Committee has put out a report showing that government health programs have historically cost more than anticipated. According to the JEC report, “Since the end of World War II, major health care reform proposals have generally always cost more — sometimes significantly more — than the highest cost estimates published while the legislation was pending.” In the case of the Medicare program, for example, government green-eyeshade types underestimated the cost by a margin on 9.17 to 1. The report concludes that there is a “Murphy’s Law of health care legislation: ‘If it can cost more than the highest available official estimate, it probably will.’”  The Senate Finance Committee Members who were pleased to see their cost estimates go under $1 trillion should read this report so see why they probably would still end up north of $1 trillion if the legislation passed.