The White House estimates that the President’s Proposal for health care reform would cost approximately $950 billion over a ten year window.  Here, James Capretta explains why this is unlikely to be the case and how President Obama’s plan would far exceed this cost estimate.

Read the summary here.

Read the President’s letter sent to Congressional leaders on March 2, 2010  here.

Click here to read Senate Republican Leader Mitch McConnell’s (R-KY) letter to President Obama regarding the White House Health Care Summit.

When President Obama held his health care summit at the White House, Rep. Dave Camp (R-MI) pointed out that a key part of containing medical costs was completely missing from the debate: medical malpractice legal reform. The cost of defensive medicine alone (without taking into account the direct costs of such claims) “could be as high as $239 billion” according to a study by PriceWaterhouseCoopers cited by Camp.

So what was President Obama’s response? He basically interrupted Camp and told him to “finish up.” On March 3, when Obama gave his speech in the East Room on health care reform, his only mention of this issue was about “funding state grants on medical malpractice reform.” Of course, he has said that before – in his address to Congress on health care last fall. Then he offered to fund “pilot” projects even though states like Texas and Mississippi have instituted such reform and we already know what works.

The House bill actually tries to kill effective malpractice remedies such as caps on noneconomic damages. It provides incentive payments to states that provide “an alternative medical liability law” that prompts the “fair resolution” of disputes – but no such incentive will be paid to any state that limits “attorneys’ fees or imposes caps on damages.”

Now according to a source, Rep. Cuellar (D-TX) is trying to convince his fellow legislators that this problem can be solved through an amendment to H.R. 3590. His proposed amendment states that “[t]he development, recognition, or implementation of any guideline or other standard under any provision of this Act shall not be construed to establish the standard of care or duty of care owed by health care providers to their patients in any medical malpractice action or claim.” The amendment also says that nothing in the federal law will “modify or impair State law governing legal standards or procedures used in medical malpractice cases.”

However, arguably this provision may be worse than useless from the standpoint of protecting medical providers from medical malpractice claims because it may give medical providers a false sense of security. Even if defendants will be able to argue that federal guidelines do not automatically establish a standard of care, plaintiffs’ lawyers will compare the doctor’s conduct to that federal guideline whenever the doctor’s actions deviate from it. So, the doctor will still be at risk. Second, this amendment will not preclude a plaintiff’s lawyer from arguing that a doctor should have done more than the minimum federal guideline, turning it into the equivalent of a standard. Third, only a state legislature can stop state courts from adopting the federal guideline as the state’s standard of care for medical treatment. Finally, this provision gives the states no reason or incentive to implement specific reforms that are known to work like capping damages for noneconomic damages (like “pain and suffering”).

The bottom line is that so far in this extended debate over healthcare, there is absolutely nothing substantive in the president’s proposals or the House or Senate bills that would implement any real medical malpractice reforms.

You might have seen this week a stunning demonstration of political condescension on the health care front. In remarks at the 2010 Legislative Conference for the National Association of Counties, House Speaker Nancy Pelosi said, “But we have to pass the bill so that you can find out what is in it, away from the fog of controversy.”

This revealing comment reinforces a patriarchal (or in Pelosi’s case matriarchal) attitude Congress has taken with the American public: What lurks within the House and Senate health care bills will be revealed in the fullness of time, and it’s really good for us if we only knew better.

Ordinary Americans have had a common-sense resistance to Washington’s feverish attempt to overhaul one-sixth of the U.S. economy. But Congressional leadership has ignored the public’s concerns and instead clung to the idea that if they simply ram the bill through the legislative process — using unprecedented tactical maneuvers that may not even pass the parliamentarian’s smell test—Americans will finally understand and embrace ObamaCare.

When it’s law, then Americans can finally grasp the “goodness” of what’s in the 2,700-plus-page Senate bill, which is the most likely legislative vehicle that Congress will push to President Barack Obama’s desk. The problem for Pelosi and congressional Democrats is that Americans have been reading these bills, and they don’t like what they’re reading.

The more the public learns about the taxes, individual mandates, taxpayer-funded abortion coverage, and the potential breakdown of the private health insurance market, the less jazzed they are about ObamaCare. But politicians have blithely waved away little details like reading the actual bill and instead said “trust us”—at a time when public trust for Congress is at an all-time low during Obama’s presidency.

This whole dynamic helps explain why Obama and congressional leadership are insistent on another artificial deadline of March 18 for final passage of ObamaCare. They know that members of Congress, particularly those in the House, could see another wave of townhall protests when they go on a two-week recess starting March 26. That’s because the American people do know what’s in these bills. Popular discussion and debate—that “fog of controversy”—has helped to enlighten them.

While Congressional leaders are feverishly plotting to jam the hugely unpopular Senate health bill through the House of Representatives the moment Speaker Pelosi thinks she has the votes, House liberals are also tinkering around with the Federal Employee Health Benefits Program (FEHBP). This is the program that covers federal workers and retirees; it is a consumer-driven program of competing private health plans. Through more regulation, Congressional liberals would like to make it look a lot more like Obamacare.

Historically, the success of the FEHBP as a consumer-driven and competitive system of private health plans has been largely attributable to its wide range of personal choice, relatively light regulation, and the hands-off approach the Office of Personnel Management (OPM) in its administration. That can change, of course, depending upon who is running the White House.

As we have said before, the powers of OPM are neither limited nor restricted to those which it actively exercises. OPM does not interfere with the health plans offered in the FEHBP by micromanaging the program or imposing price controls—but that is not to say this must be the case. In fact, as Walton Francis outlines in Roll Call, new legislation (H.R.4489) would replace the way in which health plans contract for drugs, significantly altering an important part of the FEHBP’s successful machinery.

This measure is based on the false assumption that FEHBP health plans—all of which are private plans, by the way—spend too much on prescription drugs because they contract with Pharmaceutical Benefits Management firms. The truth is, though, that up until now, FEHBP has done as good as or better of a job than any other federal program at containing costs. Francis has written extensively on the fact that FEHBP outperforms original Medicare—a program generating fiscally disastrous debt—and has done for several decades, proving that a consumer-driven market for private health insurance is effective at containing costs and securing consumer satisfaction.

But the proposed legislation would be disastrous for the free-market approach of the FEHBP, undermining both market competition and consumer choice. Says Francis:

“The net effect of these restrictions would be to reduce competition (many PBMs would not or could not bid on FEHBP plan contracts), to raise manufacturer prices to all purchasers including the VA, and in these and other ways to raise prescription drug costs in the FEHBP. OPM, an agency without any competence or expertise in wholesale or retail prescription drug management or in administering national price controls, would administer all these functions.”

This attempt to alter the FEHBP, based on false premises, exemplifies the left’s desire to destroy or reduce coverage under private insurance companies, who, ironically, have been much more successful at containing costs than the federal government, which simply shifts costs of health care to private companies through price controls and accumulates trillions of dollars of longterm debt (as in the case of Medicare). It is not federal employees and retirees alone who should worry about the impact of this legislation on the FEHBP. The giant Senate health bill would allow OPM to sponsor select health plans to compete nationwide against private health plans in the newly created, federally designed health insurance exchanges. These government-sponsored plans and their implied new role for OPM would be very different—as would the health insurance market—instead experiencing the yet-unleashed powers of the OPM. Given the policies embodied in H.R.4489, the FEHBP would be saddled with a new layer of government regulation, an ominous harbinger for the avalanche of federal rule making that would be unleashed under the giant Senate health bill.

The Health Care Nuclear Option is still the stated plan to get Obamacare to the President’s desk. The latest wrinkle is designed to allow pro-life Democrats to vote for the Senate’s taxpayer funded abortion language while still claiming they never voted for taxpayer funded abortions. Don’t be fooled.

First, let’s be clear that the Senate bill allows tax dollars to be used for abortions. According to Chuck Donovan of The Heritage Foundation, the Senate passed Obamacare bill funds abortion in several ways, even creating an appropriation for Community Health Centers that contains no restriction on abortion subsidies. If the Senate version of Obamacare is passed by the House and sent to the President, then the House has consented to the federal funding of abortion.

House members have come up with a unique way to structure a vote that attempts to avoid the House voting on legislation before it goes to the president. First, the House Budget Committee will report out a reconciliation bill. It is unclear as to whether the Stupak Amendment will be added. This reconciliation measure would be reported for consideration by the House of Representatives as a whole.

Speaker Nancy Pelosi (D-CA) would then package the Senate passed Obamacare bill and the House reconciliation measure into one measure. The House rules committee will report out a rule that will allow the Senate passed Obamacare bill to pass the House without a vote. The rule will be self-executing in the sense that the House will have been deemed to pass the Senate Obamacare bill if the House can muster the votes to pass the reconciliation measure. The House has used this procedure in the past during a debate on funding the Global War on Terror and in passing debt limit increases under the “Gephardt Rule.”

There is a constitutional issue raised by this procedure. Article 1, Section 7, of the Constitution states in part “Every Bill which shall have passed the House of Representatives and the Senate, shall, before it becomes a law, be presented to the President of the United States.” If the House does not vote on a bill, is it considered to “have passed the House of Representatives?” Don’t expect the Supreme Court to take up this case, because this is in the realm of a political issue that the Courts tend to want resolved by the House and Senate through the democratic process. It is a Constitutional concern and should be discussed by all Americans. If any member of Congress claims to have not voted for the pro-abortion Senate passed bill, one can point to this provision in the Constitution to argue the opposite.

Procedurally, this would happen in the following order. The House Rules Committee would approve this self-executing rule. The House would vote on the rule that allows this scenario. Then the House will vote on the reconciliation measure. Upon passage of the reconciliation measure the Senate Obamacare bill will be deemed to have passed the House and the reconciliation measure will be sent to the Senate. This so called “Deeming Resolution” is a trick that allows the House to pass a bill they never voted upon. Therefore, the real vote on the pro-abortion Senate passed bill will be the vote on the rule to allow this scenario to roll out on the House floor.

One provision that may make the rule is a provision that does not allow the House to report the Senate passed Obamacare bill to the President until the Senate passes a reconciliation bill. Bills are enrolled before being sent to the President for his signature and the House can prevent the enrollment and delivery of Obamacare to the President until the Senate completes work on the reconciliation measure. Sound complicated? Yes and it is supposed to so the American people can’t understand that the House is on the verge of passing an unpopular Obamacare bill, yet they are reserving the right to claim that they did not vote for the Senate passed bill.

If the liberals in the House can pull off this trick, this would have allowed Senate Majority Leader Harry Reid (D-NV) to have secretly written the version of Obamacare going to the President’s desk. Do you remember Harry Reid and the Chamber of Secrets? Reid merged, without any official proceedings, the Senate HELP and Senate Finance Committee versions of Obamacare, with his personal additions to the bill including a Public Option with an opt out for states, in closed door meetings with political elites. Basically, White House Chief of Staff Rahm Emanuel, HHS Secretary Kathleen Sebelius, OMB Director Peter Orszag, Senators Harry Reid (D-NV), Max Baucus (D-MT), Chris Dodd (D-CT) and a few other liberal Senators have rewritten health care law in secret closed door meetings.

After those meeting the Senate moved to proceed to this bill, without any hearings or opportunity for public review. During debate in the Senate, Senator Harry Reid crafted a manager’s package of amendments and added the Cornhusker Kickback for Nebraska, a Louisiana Purchase and a Gator-Aid earmark. Now the House is preparing to pass this bill without a vote. The American people should demand that Congress start over. This secretive and non-transparent procedure is not way to force through Obamacare.

President Barack Obama says he will have his health care bill passed by the House before he leaves for Australia on March 18th. Nobody outside the White House believes that is going to happen. Next week’s blown deadline will join a crowded graveyard of past deadlines including July, August, and September. But blown deadlines are not the only reoccurring storyline from this health care debate. President George Bush economic adviser Keith Hennessey has paired thirteen 2009 health care headlines with thirteen 2010 headlines. See if you can tell which are from this year and which are from last year:

Politico: President Obama takes reform on the road
AP: Obama takes health care pitch to people—again

Bloomberg: Obama Set to Fight ‘Uphill Battle’ on Health Bill
Bloomberg: Obama to Appeal to Public on Health Care as Senate Struggles

AP: Obama’s health care pitch to Democrats: Trust me
AP: Obama makes last-minute appeal to Democrats for health care votes

AP: Obama to appeal for public support on health care
AP: Obama appeals for health care votes

CSM: To pass healthcare reform, Democrats may go it alone
CNN: Democrats May Pass Health Reform without GOP Support

NYT: Obama Takes Health Care Deadline to Democrats
AFP: Deadline looming, Obama urges health care action

Boston Globe: Obama steps up health care pressure
Politico: President Obama steps up health care push

AFP: Obama presents make-or-break health reform plan
NPR: For Obama, Health Care Overhaul Is Make-Or-Break

AP: Top Dems looking to Obama for health care momentum
Reuters: Obama tries to regain momentum in healthcare debate

Reuters: Obama seeks momentum, funds for Senate allies
Reuters: Obama team tries to regain momentum on healthcare

CBS: Obama’s Health Care Push: The Race is On
WaPo: Obama Health Care Push Resumes This Week

AP: Obama turns up the heat for health care overhaul
AP: Obama expands health care push

HuffPo: White House, Dems, Plan For Make-Or-Break Summit
Bloomberg: Obama Sets ‘Make-or-Break’ Deadline on Health Care

“We have now incorporated almost every single serious idea from across the political spectrum about how to contain the rising cost of health care … Our cost-cutting measures mirror most of the proposals in the current Senate bill…”

But, as we pointed out last week, there is one not-so-minor difference between the Senate bill and the President’s new proposal: the Senate bill actually exists. Now, Democrats may be telling their conservative counterparts that they will have reconciliation legislative text in front of the Budget Committee by tomorrow, but don’t hold your breath. The “fixes” that the White House is promising wavering House Democrats they will make all sound easy at first glance: 1) scaling back the tax on high-end health insurance policies; 2) closing the Medicare D loophole; 3) boosting insurance subsidies; 4) increasing Medicaid payments; and 5) fixing the Cornhusker Kickback. But when you take a second look, you see that all of these “fixes” will cost more money. Just look at the Cornhusker Kickback which the President chose to address, not by taking away Nebraska’s special Medicaid payments, but by extending those extra Medicaid payments to every state! Every single item in the President’s proposal either increases spending or reduces new revenues. And he didn’t put forward any way to pay for them. If passing health reform were as easy as giving away free candy, Obamacare would be law already. Finding a way to pay for all these fixes is going to be just as difficult as every earlier effort to pay for this bill. So don’t expect any solutions anytime soon.

And we haven’t even mentioned “abortion” yet, which brings us to Tawas City where Rep. Bart Stupak (D-MI) hosted his own health care townhall. Now the Associated Press headline may read “Stupak: Health bill abortion fight can be resolved” but then the AP actually reports “Rep. Bart Stupak said he expects to resume talks with House leaders this week…” In other words, there is no agreement yet. And what kind of timeline is Stupak looking at for such an agreement? WJRT reports: “[Stupak]’s confident a bill will pass sometime this year.” “Sometime this year” is a bit longer of a timeframe than the White House deadline of next Thursday. But even more importantly, look at the process Stupak suggests for final passage: “According Stupak, until the House and the Senate bills and the president’s proposals become one piece of legislation, health care will remain in limbo.” Considering that everyone agrees that abortion cannot be fixed in reconciliation, Stupak’s position is a total rejection of the White House’s current plan to have the House pass the Senate bill now on the promise that the Senate might come back and try and fix it sometime in the future. Stupak clearly wants “one piece of legislation,” and the only way to accomplish that is to scrap the current Senate bill and start over.

In the meantime, legislative “limbo” has not been kind to the Senate bill. Every day seems to bring news of yet another yes vote switching to undecided or no vote. Just yesterday, former-yes votes Reps. Michael Arcuri (D-NY), Dan Maffei (D-NY), Bill Owens (D-NY) and Dan Lipinski (D-IL) all confirmed they were either now undecided or would vote no. And Rep. Artur Davis (D-AL), who voted no the first time, said he would suspend his campaign for Governor just so he could come back to Washington to vote against Obamacare again. The President can travel the country talking about an up-or-down vote for “our proposal” all he wants, but the reality is he simply doesn’t have the votes in the House for the only piece of health care legislation that actually exists.

Amidst all the intense speculation about quickly passing the President’s health care agenda through the Budget Reconciliation process before the Easter Recess, ordinary Americans should remember one thing: the House of Representatives must first pass the 2,700-page, $2.5 trillion, Senate health bill. So, the next big step in the national health care debate is floor action in the House of Representatives, where House Speaker Nancy Pelosi must round up at least 216 votes.

Heritage analysts have conducted some extensive research and analysis of the provisions of the giant Senate bill. If the House passes the Senate bill and it goes to the President’s desk for signature, it then would become the law of the land. For all intents and purposes, the legislative debate would then be over.

Regardless of Administration or Senate leadership promises to “fix” the new law (the Senate bill) through the Budget Reconciliation process, there are no guarantees. Any “fixes”– if they did come about — would have to survive another round of Senate floor action. So it is worth recalling what the Senate bill would mean for Americans were it to become law.

– Failure to address the drivers behind rising spending in health care. The Senate bill attempts to control costs by imposing heavy new federal regulations and punitive taxes on high-ticket medical expenditures such as medical devices, prescription drugs, and high-cost insurance plans. This top-down approach focuses on the symptoms, rather than the causes, of increasing health spending. Health insurance premiums, particularly in the individual market, will go up.

– An individual mandate with disastrous unintended consequences. To expand coverage, the bill includes guaranteed issue of coverage combined with an individual mandate. However, rather than encourage “young invincibles” to carry insurance, the mandate, which would be less expensive than insurance coverage, would create incentives for young and healthy adults to pay the penalty rather than buy and carry a costly health plan. This would destabilize the insurance market by reducing the spread of risk, leaving the elderly and sickly in insurance risk pools. Premiums would thus skyrocket—further discouraging healthy individuals from obtaining care.

– Stringent federal requirement push private insurers towards insolvency. The combination of an excise tax on high-cost insurance plans, a federally defined minimum medical-loss ratio, and federally defined required benefits could push private insurers to going out of business, should they be incapable of meeting all three requirements and simultaneously covering the cost of enrollees’ care. Alternatively, it could mean that health insurers, “too big to fail,” would become the next big industry recipients of taxpayer bailouts.

– A public option in disguise. The Senate bill requires the Office of Personnel Management to establish and manage health plans in the state exchanges to compete against private health plans. The bill expands the powers of this federal agency. This could lead to a de facto public option with federally defined premiums, benefits, etc.: private insurance in name only. Of course, if the government sponsored health plans do not effectively compete against the other plans, it is likely that they will also be eligible for future federal bailouts at the taxpayers’ expense.

– Government subsidies which penalize marriage. The structure of the subsidies offered by the Senate bill to purchase insurance are inequitable, offering more financial assistance to non-married couples than to a married couple with comparable income. This is bizarre social policy.

– Trillions in new federal spending, questionable savings. Congressional liberals claim that their health care proposals are deficit neutral. In fact, they are based on budgetary gimmicks and hidden costs. When these are accounted for, the real cost of the Senate bill skyrockets, further augmented by the implausibility of the many promised savings in the bill.

– A special Medicaid deal for Nebraska. The Senate bill would force all federal taxpayers to cover the extra cost of expanding Medicaid in Nebraska. It is worthy to note that the President’s proposal would extend the taxpayer subsidies to all states, increasing the total cost of the bill.

– Expanding Medicaid on the states’ budgets. Though the federal government would initially cover most of the cost of expanding Medicaid, states would eventually have to pick up a portion of the cost. This comes at a time when states are cutting spending in Medicaid and other areas to accrue savings and avoid increasing debt. In fact, we show that states could save significantly if they were to drop their Medicaid programs altogether, which could become an appealing option after adoption of the Senate bill.

– Encourages employment discrimination. The structure of the bill’s employer mandate would discourage employers from hiring workers from low-income families and from offering insurance to all employees if a large portion of a firm’s workforce consists of low-income workers.

– Disparate federal assistance for families of comparable income. The generous subsidies available to purchase insurance in the exchanges would be available to only a select few of the millions that fall within the eligible income bracket. This would result in thousands of dollars in additional federal assistance for some individuals and little to no assistance for others, regardless of equal income.

– Taxing families’ health benefits. An excise tax on high-cost insurance plans is included in the Senate bill with the intention of lowering premiums. However, this tax on insurers would be passed down to the consumer, further raising premiums.

– Numerous new taxes—and not just for the wealthy. President Obama has promised not to introduce new taxes that would affect the middle-class, but the Senate bill would impose several new punitive taxes on to Americans of every financial background.

These policies are all embodied in the Senate health bill. For further analysis of the Senate bill, click here. Congress should take a different route and start over to do health care reform right.

During last month’s Blair House health care summit, President Barack Obama was forced to change the subject after Rep. Paul Ryan (R-WI) Blair House thoroughly refuted the President’s claim that his health care plan would reduce the deficit. It took over a week for the White House to respond to Ryan, but last Thursday they finally produced this blog post by OMB director Peter Orszag followed by a Washington Post op-ed Friday titled: Health reform that won’t break the bank. Ethics and Public Policy Center fellow James Capretta responded to the White House that same day at NRO:

“Orszag and DeParle start by agreeing with Ryan that delaying the start date of an entitlement expansion is a tried-and-true budget gimmick, designed to push the full cost of the additional spending outside of the ‘budget window’ covered by a cost estimate.”

“But, not to worry, they say. In this instance, it’s not a gimmick because the deficit reduction from their plan just keeps growing over time. They claim the president’s health plan would produce deficit reduction of $100 billion over ten years and $1 trillion in the second decade.”

“Of course, there’s another reason besides balancing revenue and spending to push the start of an entitlement back, and that’s to make the 10-year cost look much smaller than it really is. Recall that the president promised in his address to Congress last September to deliver a bill that costs only ‘$900 billion’ over a decade. The new entitlements the Democrats want to create would cost much, much more than $90 billion per year. In fact, the Congressional Budget Office (CBO) says they will cost about $200 billion per year by 2019. And so, to get the media to now say his plan costs only ‘$1 trillion’ (what’s $100 billion among friends!), the administration delays the coverage expansion provisions until 2014. Never mind that the president also says the uninsured can’t wait a day longer for the legislation. Once enacted, he would make them wait — for four years.”

“As Ryan noted, however, once the program did get up and running, costs would soar. The Senate Budget Committee Republican staff estimates the Senate bill’s cost at $2.3 trillion over ten years when fully implemented.”

“In their Post op-ed, Orszag and DeParle do not even attempt to address the many other points Ryan made which expose the dubious assumptions and sleight of hand behind their deficit-cutting claims.”

“For instance, the health-reform bill is filled to the brim with Medicare changes, but the one Medicare provision the president and the Democrats want to pass separately from the health bill is the so-called ‘doc fix,’ which would repeal a cut in Medicare physician fees at a cost of $371 billion over ten years. Of course, splitting their agenda into two or three bills doesn’t change the total cost. When the ‘doc fix’ is properly included in a tally of what the president is pushing, all of the supposed deficit reduction vanishes.”

“Then there’s the double-counting that Ryan exposed. The president’s plan starts up yet another entitlement program, providing long-term care insurance. Enrollees have to pay premiums for a number of years before they qualify for any benefits. Consequently, at startup, there’s a surplus of premium collections — $73 billion over ten years, according to CBO — because no one qualifies for the benefits yet. The president and his team count these savings against the cost of health reform — even though the money will be needed later to pay out long-term-care insurance claims. When this gimmick is taken out of the accounting, the president’s health proposal goes even deeper into the red.”

“Over the long-run, the administration’s claim of large-scale deficit reduction hinges on the dubious assumption that future elected officials will demonstrate more political courage than those in office today.”

“For most of last year, the president said that he would ‘bend the cost-curve’ in large part by imposing a new tax on ‘high-cost’ insurance plans. The tax would hit more and more middle-class beneficiaries each year because the threshold for determining what constitutes a ‘high-cost’ plan would grow much more slowly than medical costs. In fact, after a number of years, virtually all Americans would be in plans at or above the ‘high-cost’ threshold.”

“House Democrats and their union allies despise this tax. Last week, the president caved in to their pressure and pushed the start date of the tax back to 2018, well past the point when he will have left office. Even so, Orszag and DeParle still claim credit for the massive revenue hike that would occur in a second decade of implementation. They want us to believe we can finance a permanent, expensive, and rapidly growing new entitlement program with a tax the president himself was never willing to collect.”

“In Medicare, Orszag and DeParle like to highlight so-called ‘delivery system reforms’ the administration has touted. In the main, these are extremely small-scale initiatives and pilot programs. CBO says they will amount to virtually no savings. The big Medicare cuts in the president’s plan come from across-the-board payment-rate reductions. In particular, the president wants to cut the inflation update for hospitals, nursing homes, and others by half a percentage point every year, in perpetuity. On paper, this change produces huge long-run savings. But it does nothing to control the underlying cost of treating patients. It just pays everyone less, without regard to patient need or quality of care. The chief actuary of the program has said repeatedly that these cuts are completely unrealistic for these very reasons. If implemented, he expects they would drive one in five facilities into serious financial distress. And yet Orszag and DeParle want us to believe these savings can be counted to finance the president’s massive entitlement promises.”

“And massive they are. CBO says the coverage expansion provisions in the Senate-passed bill would cost about $200 billion by 2019, and that cost would rise 8 percent every year thereafter.”

“But even these estimates understate the true cost of Obamacare. The president’s plan, like the House and Senate bills, would extend generous new insurance subsidies to low- and moderate-wage workers getting insurance through the new ‘exchanges.’ Workers in job-based plans would get no additional help. That means two workers with identical incomes would be treated very differently. Gene Steuerle of the Urban Institute has estimated that, in 2016, a worker with job-based coverage and a $60,000 income would get $4,500 less than someone with the same income but health insurance through the exchange. This kind of inequitable treatment would never last: one way or another, the entitlement would get extended to everyone in the targeted income range, sending the overall costs of the program soaring.”

“The president started off last year by saying he wanted to ‘bend the cost-curve’ even as he broadened coverage. But after a year of partisan political and legislative maneuvering, all that’s left is a massive entitlement expansion. The new costs would get piled on top of the unreformed and unaffordable entitlements already on the books. It’s a budgetary disaster in the making.”