FixHealthCarePolicy

Bringing Leviathan to Life: Experts Look at ObamaCare Implementation

A June Health Affairs briefing on the implementation of the Patient Protection and Affordable Care Act (PPACA) showed just how deep the chasm is between many of Washington’s policy experts and ordinary Americans. At the briefing, panelists discussed the potential impact and implementation of the ObamaCare amidst the public’s uncertainty over the law’s provisions and unintended, consequences.

The panelists discussed three main issues: If the reform law would bend the cost curve down; the states’ role in reforming insurance markets; and the state impact of expanding Medicaid.

Harvard Professor David Cutler said the law could lower costs because there is so much waste in the health system. He focused on the potential for the general improvement of information technology. Following Cutler, Michael Ramlet spoke about his paper with Douglas Holtz-Eakin. They estimated that the new law will cost the government far more than projected, and that it would not, as promised, end up reducing health costs for the American worker. (more…)

Tags: deficit, federal takeover, HHS, Medicaid, ObamaCare

Side Effects: Cost Of Medicaid Expansion Going Nowhere But Up

In passing Obamacare, Congress has put the states in quite a pickle. To sharply expand health coverage, Obamacare flung wide the gates of Medicaid eligibility. It envisions a massive expansion of the federal-state health program that, historically, delivers low-quality care to low-income Americans.

Not a smart move.

States were already struggling to meet their share of Medicaid program costs—even though Medicaid payments to providers often don’t even cover the cost of care. And, due to the inadequate reimbursement rates, more and more doctors were already refusing to accept new Medicaid patients.

How fiscally shaky is Medicaid today? Well, last year Congress used the stimulus bill to give states $87 billion to help them cover rising Medicaid costs. And that doesn’t seem to be enough.

A recent letter from House Democrats encourages their colleagues to give states another $24 billion to help them cover Medicaid costs for another six months. “Without this funding,” the letter says, “our states will be forced to make severe cuts to Medicaid providers and benefits, and the ensuing budget shortfall would have grave consequences for school funding and other essential state programs.” (more…)

Tags: deficit, federal-state program, low-quality care, Medicaid Expansion, ObamaCare, Side Effects

The Obama Budget Plan: Taxes and Rationing

Suddenly, the Obama administration and Democratic congressional leaders seem to want health-care news stories to fall off of the front page.

This week, House Energy and Commerce Chairman Henry Waxman abruptly cancelled a high-profile hearing he had called just days earlier to berate corporate CEOs who dared to tell their investors that the health-care bill would raise their costs. It seems to have dawned on Congressman Waxman and his staff that his transparent effort to intimidate anyone who tells the truth about the legislation could actually backfire on him and turn into a PR disaster.

The Democratic contention that the bill actually lowers costs for American business is not supported by any rigorous analysis that would justify use in auditable corporate accounting methods. The Business Roundtable study that many Obamacare advocates like to cite as proof of the bill’s savings provides no such proof at all. The prediction of cost savings in the study, from the mostly minor provisions in the legislation aimed at “delivery system reform,” are highly speculative at best. Indeed, the study itself notes the potential for much higher costs and cites many cost-cutting provisions that are not in the new health law. (more…)

Tags: debt commission, deficit, economic crisis, House Energy and Commerce Committee, ObamaCare, Rep. Henry Waxman, retiree drug-benefit coverage, value-added tax (VAT)

Obamacare Increases Unemployment, Insurance Premiums, Deficit, and Debt

President Barack Obama and congressional leaders claim that the Senate health bill, which will likely face a vote in the House by the end of the week, will decrease the deficit and bend the cost curve related to health care spending. However, recent analysis by The Heritage Foundation’s Center for Data Analysis (CDA) shows that this is far from true. Instead, the bill’s mandates and numerous new taxes will have tumultuous effects. Passing Obamacare will come at the expense of the American people as it would grow the federal debt, increase premiums, and stifle economic growth.

The Senate bill would have disastrous effects on the economy and federal spending. CDA shows that the bill:

– Increases the federal deficit and national debt. The Congressional Budget Office shows deficit neutrality for the Senate bill—however, this is based on static analysis which ignores the effects new taxes and an individual and employer mandate would have on economic growth. These provisions would decrease investment in the economy, resulting in lower wages and salaries. This means less taxable income, lowering federal revenues and growing the debt. Increased borrowing puts upward pressure on interest rates causing some private sector productive investment opportunities to be foregone. This also increases the interest owed on the national debt, such that the government would pay, on average, $20 billion more in interest between 2010 and 2020. By the end of the decade, CDA estimates the publicly held debt would be $755 billion dollars more than under current law. (more…)

Tags: deficit, jobs, mandates, national debt, premiums, senate health care bill, taxes, unemployment

Morning Bell: Is Now Really the Time To Create a New $2.5 Trillion Entitlement?

In theory, the federal government has $2.5 trillion stashed away in a nondescript office building in the sleepy little town of Parkersburg, West Virginia. That is where the Treasury Department keeps stacks of nonnegotiable Treasury bonds payable to the Social Security Administration. But as the Associated Press reported yesterday, for the first time since the 1980s, the federal government will not be adding to that stack. Thanks to an aging population and slow economy, Social Security will pay out $29 billion more this year than it takes in. And the Congressional Budget Office reports that after small surpluses in 2014 and 2015, the program is projected to be in the red from 2016 until forever.

But what about Al Gore’s Social Security “Lock Box?” Can’t we just spend that $2.5 trillion in the Social Security Trust Fund? As Heritage experts David John and Brian Reidl explain, since 1939 federal law has required Social Security to “invest” its extra money in Treasury bonds. Those bonds are really just IOUs from the government to the government. The feds already spent that $2.5 trillion long ago on programs such as education, foreign aid and defense. Add the $2.5 trillion Social Security obligation onto our other obligations and our current national debt stands at $12.5 trillion, or nearly $42,000 for every man, woman, and child in the country. And it will only get worse under President Barack Obama’s Budget. It would: 1) borrow 42 cents for each dollar spent in 2010; 2) leave permanent annual deficits that top $1 trillion as late as 2020; and 3) dump an additional $74,000 per household of debt into the laps of our children and grandchildren. (more…)

Tags: AAA ratings, Centers for Medicare and Medicaid Services, deficit, health care entitlement, President's proposal

Morning Bell: “The American Public Is Not Behind This Bill”

After more than a year of $862 billion deficit stimulus bills, national-debt-doubling federal budgets, and government takeovers of the auto industry, it is difficult to remember that President Barack Obama actually ran as a moderate in many ways. On his way to a 53% – 46% win over Sen. John McCain (R-AZ), then-Sen. Obama promised to “cut taxes for 95% of workers and their families,” expand the Army by 65,000 and the Marines by 27,000, and enact “a net spending cut” for the federal government. Obama promised lower taxes, a strong defense and shrinking the size of government. No wonder independents in nine states that went for President George Bush in 2000 and 2004 switched their vote to Obama in 2008 (CO, FL, IN, IA, NV, NM, NC, OH and VA). But now those independents are beginning to reassess. Public Policy Polling (a liberal polling firm) notes that Obama now has a negative approval rating in every state that he flipped from the Bush column to his in 2008.

And now President Obama has lost one of his biggest and earliest supporters on his signature issue: health care. Yesterday, when pressed on CNBC if he would be in favor of scrapping the Senate health care bill, Warren Buffett responded: “I would be.” Specifically, Buffett believes that the Senate bill will not contain health care costs: “We have a health system that, in terms of cost, is really out of control, and if you take this line and you project what has been happening into the future, we will get less and less competitive. So, we need something else. Unfortunately, we came up with a bill that really doesn’t attack the cost situation that much and we have to have a fundamental change.” Buffett is correct on both fronts: 1) the President’s own Centers for Medicare and Medicaid Services (CMS) has reported that the Senate health care bill would raise national health expenditures $234 billion by 2019; and 2) our current system is completely unable to control exploding health care costs. (more…)

Tags: deficit, Medicaid Expansion, national debt, ObamaCare, price controls, Public Opinion, Senate Health Bill, start over, Warren Buffett

Yes, $2.6 Trillion! A Closer Look at the Full 10 Years of Spending in the House Health Bill

House Speaker Nancy Pelosi and the House Democratic leadership are frantically trying to find enough votes to pass their giant 2,032 page health care legislation this weekend. But before Speaker Pelosi and liberals in Congress pass their big bill, the American taxpayers should be fully aware of the full price tag of this monster.

As Heritage analysts noted earlier in the week, the Congressional Budget Office released its preliminary score of the bill (H.R. 3962) but too many in the media have not been reporting its true cost. The true cost is not the net spending on only the coverage related provisions ($897 billion) but rather the total gross spending for the coverage provisions ($1.05 trillion) as well as any additional spending in the bill (approximately $217 billion). That would raise the plan’s price tag to about $1.5 trillion when including the roughly $210 billion cost of the “doc fix” is included. The “doc fix” refers to the undoing of the flawed Medicare payment update formula, which Congress created but has routinely stopped from being enforced. Under current law, that formula would result in a 20 percent reduction in doctors’ pay under the Medicare program. (more…)

Tags: debt, deficit, Medicare, Nancy Pelosi, Obama Health Care Plan, spending, tax, trillion

Morning Bell: The Pelosi Blueprint for Government Run Health Care

The new House health care bill (H.R. 3962) unveiled by Speaker Nancy Pelosi (D-CA) yesterday clocks in at 1,990 pages and about 400,000 words. As written, the bill purports to cost only $1.05 trillion over the first ten years and is paid for by over $700 billion in tax increases and cuts to Medicare Advantage and Medicare prescription drug payments. But as troubling as those numbers are, the scariest thing about the bill is the solid foundation it lays for a complete government take over of the health care sector of our economy.

The Washington Post describes the bill as “creating an expensive new entitlement program (subsidies to purchase health insurance) and dramatically expanding an existing one (Medicaid).” This is true by itself, but the Post later dismissively adds: “If you’ve noticed that we haven’t talked about the public option in the House bill, that’s not an oversight. For all the fury over the issue, it doesn’t matter that much; the CBO estimates that the government-run plan would actually have slightly higher premiums.” This is a breathtakingly naive statement by the Post and demonstrates that they have not yet fully grasped how all the different elements of the bill are designed to interact to produce President Barack Obama’s desired outcome. (more…)

Tags: 3962, Barack Obama, CBO, debt, deficit, entitlement, government takeover, Medicaid, Medicare, Medicare Advantage, Nancy Pelosi, Obama Health Care Plan, tax increases