>> As I understand it, the cost of the medicare program turned out to be much >greater than expected, but not because congress kept changing the legislation >to add more goodies. Rather treatment became increasingly more expensive.
>Bryan Caplan: >In an email discussion with me circa 1995, you mainly attributed the >low-ball estimate to wishful thinking (presumably mixed in with >deception?), not unforeseen technology shocks. I don't remember this. I would imagine that favorable assumptions explain some of the error, but can't account for a very large fraction of the forecasting error. I'm nearly certain that if you are comparing the forecasted costs from back then with today's costs the vast majority of the difference would be the change in the typical per person cost of medical care. This change isn't only due to innovative treatment, but also due to the growth of demand caused by the availability of insurance (as another poster suggested). >David Levenstam: >All my books remain packed in boxes, so I can't look up the figures, but I >seem to recall that the Congressional proponents of Medicare projected an >ten-year federal outlay of some $8 billion, as opposed to the annual outlay >of $110+ billion now. I can't conceive of the vast majority of Americans >supporting a program that would have cost two orders of magnitude greater >than projected. Of course you have to discount the latter figure for inflation and population growth, but no one is disputing that the costs were significantly understated. However, would American's have opposed Medicare if they had known how much it would cost (and what they would get for it)? I very seriously doubt it. Of course there is no way to know for sure, but polling results I saw during the Clinton administration suggested that cost was not a major concern for voters considering different health care plans. In fact, if the polling results I saw were right a majority of Americans would have voted for Clinton's plan knowing what it did and how much it cost as long as it wasn't labeled "Clinton's plan." (By then Harry and Louise had done a good job of convincing people that the plan was something that it was not.) Of course, voters also thought that the fact that firms were supposed to pay most of the costs of the plan meant that they would not have to pay for it (ultimately). Its not! clear if people would have been willing to pay for it if they thought they would have to pay the full price themselves. >Typically one of the selling points of federal programs is >that "they won't cost too much." Selling points to who for what? I suspect that this matters a lot more to congress than it does to the typical voter. As has been noted several times in this discussion, the typical voter has nothing close to an accurate conception of the magnitude or the allocation of the Federal budget and therefore no basis for judging whether a program is cheap or too costly. - - Bill Dickens William T. Dickens The Brookings Institution 1775 Massachusetts Avenue, NW Washington, DC 20036 Phone: (202) 797-6113 FAX: (202) 797-6181 E-MAIL: [EMAIL PROTECTED] AOL IM: wtdickens
