Fix Health Care Policy

CBO’s Estimates of Obamacare, Revisited

Some apologists for Obamacare are trying to tout recent analyses from the Congressional Budget Office (CBO) as confirming once again that the health law will cut projected future budget deficits.

But CBO’s recent analyses—including updated projections of the costs of the new entitlement spending in the so-called exchanges and some simulations on employer dumping scenarios—basically say nothing that wasn’t already said when the agency issued its original cost estimates for the law in March 2010.

It is certainly true that CBO projected in 2010 and again this month that the new law would, at least on paper, reduce the federal government’s budget deficit modestly over its first two decades. But that assessment has always rested on a series of omissions, gimmicks, double-counting of savings, and implausible assumptions that also have not changed since the law was enacted in 2010. When the imaginary “savings” is stripped out of the accounting, Obamacare is exposed as the epic budget buster that it is. That, too, hasn’t changed since March 2010.

Read the rest on The Foundry…

Tags: Congressional Budget Office, expensive, higher cost, new analysis, new entitlement spending, ObamaCare

Obamacare: Higher Taxes, More Uninsured, Says CBO

On March 13, the Congressional Budget Office (CBO) updated its score of Obamacare, announcing that the program is $48 billion cheaper than in its previous 2011 score.

The primary reason for this change is that more individuals will lose their employer-provided coverage than originally anticipated, and the government will collect $99 billion more in taxes and penalties. CBO also finds that there are more uninsured individuals.

In short, this new CBO update continues the trend of Obamacare becoming increasingly expensive and decreasingly effective with each new scoring update.

In this round, CBO announced that the individual mandate penalties will increase by one-third, or $11 billion, as more individuals choose not to purchase insurance. This is especially surprising since CBO also estimates that health insurance premiums will be cheaper in the next decade. Thus, even with cheaper premiums, fewer people will choose to acquire insurance.

Read the rest on The Foundry…

Tags: Congressional Budget Office, more penalties, Obamacare score, taxes, uninsured individuals

Medicare Advantage Is Living Up to Its Name

The Congressional Budget Office (CBO) recently released a report that reviewed 10 Medicare demonstrations designed with the intention of reducing spending and improving quality of care. Unfortunately, the demonstrations did not produce the desired results.

The CBO report concluded, “The results of the demonstrations illustrate the challenges of developing, implementing, and evaluating policies that reduce Medicare expenditures while improving or maintaining quality of care.” However, Heritage policy analyst Kathryn Nix has analyzed research that shows that the answer to the challenge is right under everyone’s nose: the private market.

Nix explains that private health plans participating in Medicare Advantage (MA) are making strides in what Congress has tried—and failed—to achieve in traditional Medicare fee-for-service (FFS) for decades. Competition among private plans has maintained patient satisfaction, lowered costs, and increased the quality of care. Success is obvious and abundant in the MA program.  (Read the rest on The Foundry…)

Tags: competition, Congressional Budget Office, fee-for-service, lowered costs, Medicare Advantage, private market

Criticism of McKinsey Survey on Employer Health Coverage Falls Short

The recent McKinsey survey showing that 30 percent of employers would drop coverage shouldn’t be controversial. Economists have consistently shown how an employer mandate will negatively affect employment and wages. In fact, even the Congressional Budget Office (CBO) concede such affects.

Answering critics’ calls, McKinsey released the details of its survey three weeks ago, showing that their survey methodology was sound. The survey included a large sample size, representative industries, respondents directly involved in the decision-making process regarding health benefits, and questions/information presented in a neutral manner. Nonetheless, critics—including the White House and Senate Democrats—have continued to vehemently criticize the report, calling it an “outlier.”   (Read the rest on The Foundry…)

Tags: Congressional Budget Office, drop coverage, employers, McKinsey survey, methodology, ObamaCare

CBO Report Shows, Without Reform, the Future of Medicare Ain’t Pretty

The Congressional Budget Office (CBO) recently released its annual Long-Term Budget Outlook, which highlights the effects of existing policy on the federal budget. The verdict: The current trajectory is “unsustainable.”

Growing federal health care spending is a major driver of future deficits. As CBO explains, “Spending for health care in the United States has been growing faster than the economy for many years, posing a challenge not only for the federal government’s two major health insurance programs, Medicare and Medicaid, but also for state and local governments and the private sector.” The report shows that the outlook is grimmer than ever, despite the vaunted “deficit reduction” claims of those in Congress who voted for Obamacare.  (Read the rest on The Foundry…)

Tags: Congressional Budget Office, long-term budget outlook, Medicare, ObamaCare, repeal the law, unsustainable

Another Good Swing At Defunding Obamacare—But Not A Hit

Once again the U.S. House plans to take another whack Tuesday at defunding Obamacare—although the Senate and White House are poised to protect the funding.

The bill scheduled for a vote, HR 1213, would repeal the automatic funding that Obamacare provides for federally-dictated insurance exchanges, the mechanisms to sell the re-fashioned and federally-approved insurance policies. And while the bill does not repeal the requirement that each state either establish such an exchange or have the feds do it for them, billions of taxpayer dollars could be saved if the House bill had a chance to become law.

The Congressional Budget Office estimates savings of $14.6-billion over ten years, but the amount is inexact because Obamacare placed no limit on how much would be spent. The Secretary of Health and Human Services was given a blank check for that purpose. It’s just one part of the overall $105-billion slush fund in automatic spending under Obamacare. (Read the rest at The Foundry…)

Tags: Congressional Budget Office, health care costs, ObamaCare, taxpayer dollars repeal the law

Brace for Larger Deficits as Lawmakers Rethink Health Care Law’s Medicare Cuts

Obamacare will cost Americans trillions of dollars in the decades to come. To help pay for its new coverage provisions, the plan makes sweeping cuts to Medicare. But as it turns out, serious doubts exist about the likelihood of these cuts actually occurring, and evidence has already shown that lawmakers may shy away from some of the cuts. If the planned savings don’t materialize, the health care overhaul will add even more to deficit spending than already expected, further jeopardizing the nation’s fiscal future.

Both the director of the Congressional Budget Office (CBO) and the Medicare Chief Actuary warn that Medicare cuts made by Obamacare will be difficult to sustain in the long term. (Read the rest at The Foundry…)

Tags: Congressional Budget Office, cuts in Medicare, long-term costs, ObamaCare, trillion dollars

New CBO Report Proves We Cannot Afford Obamacare

Last week, the Congressional Budget Office released its report on H.R. 2, the House-passed legislation that would fully repeal Obamacare. The takeaway message was that American taxpayers simply cannot afford Obamacare.

CBO’s initial scoring of Obamacare analyzed its effects from 2010 to 2019, including only six years of full implementation, since main spending provisions do not go into effect until 2014. The new document reports on 2012 to 2021, including an additional two years of full implementation. This still fails to show the true 10-year cost of the law, but gets a little closer. Over eight years, the gross cost of Obamacare’s coverage provisions jumps from $938 billion to $1.39 trillion, which includes $677 billion to create a new health entitlement offering generous subsidies to the middle class to purchase health insurance. (Read the rest at The Foundry…)

Tags: Congressional Budget Office, ObamaCare, taxpayers, unsustainable

Obamacare Does No Favors for the Nation’s Fiscal Outlook

Last week served up another dose of reality for Obamacare supporters.

In addition to House committee hearings that exposed the negative effects of the new law, the Congressional Budget Office (CBO) released its new 10-year baseline, which unveils the “daunting economic and budgetary challenges” facing the United States. In 2011, the federal deficit will hit $1.5 trillion. Heritage budget expert Brian Riedl writes, “Historic increases in federal spending are set to create permanent trillion-dollar deficits, eventually pushing the national debt past 100 percent of the GDP. Without change, the nation could potentially face a Greece-like economic crisis.”

Deficits will decrease later in the decade as the economy recovers, but the CBO warns that this assumes “that tax and spending policies unfold as specified in current law. Consequently, they understate the budget deficits that would occur if many policies currently in place were continued, rather than allowed to expire as scheduled under current law.” (Read the rest at The Foundry…)

Tags: Congressional Budget Office, House committee hearings, increased federal spending, ObamaCare

Reality Check: Repeal of Obamacare Would Not Increase the Deficit

As the new Congress settles in, the House of Representatives prepares to vote on January 12 on a measure to repeal Obamacare. Proponents of the health care law claim that repeal would increase the federal deficit and that a vote to kill Obamacare without offsetting the “cost” is hypocritical.

This couldn’t be more wrong. For starters, Obamacare will not reduce the deficit. Though the Congressional Budget Office (CBO) projected that the health law would create $124 billion in savings, the CBO is required to make unlikely assumptions and disregard budget gimmicks included in the legislation. Taking this into account causes the cost of Obamacare to skyrocket.

First, Obamacare does not include the “doc fix” to prevent an automatic cut to physicians’ reimbursement rates under Medicare. Earlier versions of reform included a fix, which made those proposals tip heavily into the red. Congress recently passed a one-year fix and will continue to prevent the cuts in the future, but it will still not solve the ongoing problem. Nevertheless, pretending it will not happen won’t reduce the deficit. (Read the rest at The Foundry…)

Tags: CLASS program, Congressional Budget Office, increased deficit, Medicare reimbursement rates, repeal Obamacare