Fix Health Care Policy

The Congressional Budget Office (CBO) released its Budget and Economic Outlook for 2013–2023 today. Here are five major takeaways:

1)      Health care entitlement spending is bypassing all other spending. Spending on Medicare, Medicaid, Obamacare subsidies, and the Children’s Health Insurance Program will be greater than all other spending—including Social Security and defense spending: “Spending for major health care programs will be nearly 5 percent of GDP [gross domestic product] in 2013, and such spending is projected to grow rapidly when provisions of [Obamacare] are fully implemented by middecade, reaching 6.2 percent of GDP in 2023.”

Read the rest on The Foundry…

Tags: Congressional Budget Office, entitlement spending, Medicaid, Medicare, ObamaCare, report, subsidies

Reports have surfaced that conservatives in Congress may propose further increasing income adjustment in Medicare to lessen the program’s insolvency. This is a great idea. While the left continues to argue for higher taxes for the likes of Warren Buffett to maintain the status quo of a costly, failing Medicare program, it makes more sense that Congress should simply stop subsidizing them.

As Congress continues to pursue solutions to the entitlement spending crisis, one question that must be answered is whether the United States should even have universal federal entitlements to begin with. Considering the wreckage of the nation’s finances, the answer is clearly no. It’s not only that we cannot afford it, but the very creation of popular dependency on government itself threatens prosperity.

For wealthier Americans like Buffett, the policy options are clear. The Obama Administration and its allies in Congress are obsessed with imposing higher taxes on them, regardless of the impact on investment in the economy and despite the fact that they already pay the bulk of federal income taxes. The intent behind this course of action is to maintain, largely unchanged, the existing federal entitlement regime.  (Read the rest on The Foundry…)

Tags: congress, entitlement spending, subsidizing Medicare, taxes, Warren Buffett

The President’s National Commission on Fiscal Responsibility and Reform is not set to release its final recommendations on how best to tackle deficit spending and entitlement reform until December 1. However, several of its members have already gone public with proposals to reduce runaway spending and put Medicare and Medicaid, two of the fastest-growing entitlement programs, on the road to solvency.

The commission co-chairs, Alan Simpson and Erskine Bowles, released a report that takes several positive steps in reforming Medicare, including opting to repeal the Sustainable Growth Formula. Alice Rivlin and Representative Paul Ryan (R–WI), also members of the commission, released transformative, long-term solutions to Medicare and Medicaid that would better serve patients and reduce the tremendous upward pressure these programs place on federal spending. (more…)

Tags: debt commission, entitlement spending, Medicaid, Medicare, sustainable growth rate formula, unfunded obligations

Debate continues on the Senate floor on the Patient Protection and Affordable Care Act of 2009 (H.R.3590), and the focus continues to be on Medicare and Medicare Advantage. While proposing spending cuts in one program to create another, the Senate leadership is claiming that all of these Medicare cuts are possible without cutting benefits or services in current Medicare programs, such as Medicare Advantage and Home Health Care.

Stabenow’s Medicare Advantage Amendment. Senator Debbie Stabenow (D-MI) proposed an amendment which would ensure that spending reductions to the Medicare Advantage program would not result in a reduction or elimination in benefits that enrollees would receive. Sen. Stabenow’s amendment passed 97-1.

This amendment is a curious, as well as popular. Its popularity may reflect the substance of the legislation. The reason: Senate Majority Leader Harry Reid’s (D-NV) bill includes $118.1 billion in cuts to the Medicare Advantage program. It’s hard to imagine how cuts of this magnitude would not affect benefits for enrollees of the program — now more than one in five seniors. Examining similar provisions in the giant House-passed bill, the Chief Actuary of the Centers for Medicare and Medicaid Services said comparable spending cuts to Medicare Advantage would “reduce MA rebates to plans and thereby result in less generous benefit packages.”

The Hatch Amendment on Medicare Advantage Cuts. Senator Orrin Hatch (R-UT) made a motion to commit the bill to the Senate Finance Committee to remove Medicare spending cuts, which would have guaranteed Sen. Stabenow’s promise to protect the Medicare Advantage program. Sen. Hatch’s amendment failed with a vote of 41-57.

The Kerry Amendment on Home Health. Senator John Kerry (D-MA) offered an amendment that the Senate bill would guarantee home health benefits that Medicare enrollees receive under title XVIII of the Social Security Act. The Kerry Amendment to guarantee these benefits was very popular. It passed 96-0.

The Johanns Amendment on Home Health. Senator Mike Johanns (R-NE) then offered a motion to commit the bill to the Senate Finance Committee to remove spending cuts to the same home health benefits that Sen. Kerry’s amendment seeks to preserve. The health care bill currently contains $42.1 billion in cuts to home health benefits over ten years. Sen. Johann’s amendment was defeated by a vote of 41-53.

Whitehouse Amendment to Preserve Social Security. Senator Sheldon Whitehouse (D-RI) offered an amendment to ensure that surpluses created by the health care bill in the Social Security trust fund and savings generated by the CLASS Act would be reserved for Social Security and the CLASS program, respectively. The Senate voted to preserve savings from these programs 98-0.

It is worth noting that the Senate bill delays spending until after revenue collection begins. In examining the CLASS Act provisions, the Congressional Budget Office says, “…the program’s cash flows would show net receipts for a number of years, followed by net outlays in subsequent decades.”

Thune Amendment on Entitlement Spending. Senator John Thune (R-SD) proposed an amendment which would remove the CLASS act altogether in order to eliminate new entitlement spending and limit government control over health care. Thune warned that Congress should not be creating more problems like those inherent in Medicare, which, like the CLASS Act, was also intended to be fiscally self-reliant on premiums and revenues collected by users of the program. Sen. Thune’s amendment was defeated by a vote of 51-47.

Kathryn Nix currently is a member of the Young Leaders Program at the Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm.

Tags: Amendments, entitlement spending, Home Health Care, Medicare Advantage, Senate Health Bill