Fix Health Care Policy

12 Days of Obamacare Surprises: Deficit Reduction?

Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next two days, Heritage is going to highlight one of the various changes in Obamacare projections (e.g., cost, enrollment, etc.) from when the law first passed until now.

Obamacare was passed into law under the guise that it would expand access to health coverage while simultaneously reducing the federal deficit.

In 2010, the Congressional Budget Office (CBO) estimated that Obamacare would result in deficit reduction totaling $143 billion from 2010–2019.

In 2012, the CBO estimated that Obamacare would result in deficit reduction totaling only $109 billion from 2013–2022, $34 billion less than in 2010. Among other updates, this is due to the rising costs of subsidies in the exchanges.

Surprise: The CBO lowered its deficit reduction projection by 24 percent, revealing that Obamacare will cost the American public far more than anticipated. Turns out, the best things don’t come in big, Obamacare-sized packages.

12 Days of Obamacare Surprises:

10. Unelected bureaucrats on IPAB…

9. Increased employer penalties…

8. More cuts to Medicare…

7. Loss of employer-sponsored insurance…

6. A 50/50 split on enrollment estimates…

5. More uninsured Americans…

4. Increased exchange subsidies…

3. Big tax increases…

2. The small business tax credit…

1. And the individual mandate.

Tags: "deficit reduction", CBO, Medicaid Expansion, Obamacare surprise, rising costs, subsidies

Super Committee Health Goals Need Sound Policy

If the goal is producing $1.2 trillion to $1.5 trillion in 10-year savings, the Joint Select Committee on Deficit Reduction must think big and produce recommendations with real substance. Nothing could be truer than dealing with the health care savings component.

Typically, these negotiations are so focused on reaching the savings target that the policy gets neglected, or worse hijacked in the wrong direction. One only needs to look at the 1997 Balanced Budget Act to see this in action. Yes, a Republican Congress and Democratic administration were able to join hands and claim victory — the federal budget was balanced!

However, alongside this short-lived budget victory were a slew of health care policy changes that undermined conservative, free-market health care solutions. Most notably, one such change established a new health care entitlement program: SCHIP; and another advanced draconian cuts to Medicare providers resulting in a permanent “doc fix” dilemma. Even the so-called conservative “wins” that resulted — Medicare+Choice and Medical Savings Accounts — were hamstrung by regulation and designed to fail.

This recent history offers an object lesson to the super committee.  (Read the rest on The Foundry…)

Tags: "deficit reduction", free-market health care, health policy, Medicare, schip, super committee

Pay-for-Performance in Medicare Could Do More Harm Than Good

Liberals’ solution to rising health care costs has consistently been to take control of health care decisions away from patients and their doctors and to place it in the hands of government. Obamacare does this by allowing unelected bureaucrats to define and reward value in the Medicare program, and the President’s proposal for deficit reduction would further empower government to interfere in the practice of medicine. This is the wrong way to reduce costs, and will have severe consequences for patients, physicians, and the quality of health care in the United States.

In 2012, Obamacare will create the “Value-Based Purchasing Program” in Medicare. Using a pay-for-performance scheme, the program will reimburse hospitals and other health care providers at different rates based on how they score on performance measures chosen by the Secretary of Health and Human Services. Proponents of pay-for-performance see it as a way to use financial incentives to streamline and improve the quality of health care while attempting to reduce costs. But the fact is that standardization of the practice of medicine costs patients and physicians tremendously, and evidence shows it does very little to improve health outcomes. (Read the rest on The Foundry…)

Tags: "deficit reduction", harming seniors, health care costs, Medicare, ObamaCare, pay-for-performance

Side Effects: Pre-Existing Physician Payment Problems Persist

No one can criticize the Obamacare legislation for being too short. But even at 2K+ pages, the new law fails to address some major problems with the health system. One of these is the flawed formula Congress created years ago to determine how much the Medicare payment physicians receive for services rendered.

Year after year, the Congressional reimbursement formula calls for sharp reductions in Medicare payment rates. And year after year, Congress votes to suspend its own formula. That keeps doctors from bailing out of the Medicare program, but it does nothing to remedy the problem of rapidly expanding Medicare costs. (more…)

Tags: "deficit reduction", doc fix, Medicaid, Medicare, ObamaCare, reimbursement formula, Side Effects