FixHealthCarePolicy

The President’s Health Proposal: Further Jacking Up the Cost of Care

In anticipation of the February 25^th health care summit with members of Congress, the President released his proposal for pricey, government-run health care. The White House estimates the cost of the proposal to be $950 billion over a decade, decreasing the federal deficit. However, health policy expert James Capretta, a former senior official of the Office of Management and Budget (OMB), shows in a recent paper that this is not only inaccurate, but far from reality.

Capretta’s research shows that ten full years of implementation of the President’s proposal would cost closer to $2.5 trillion, with the strong likelihood of far exceeding this amount. Here’s how:

• The President’s proposal ignores “doc fix” legislation, which would cost roughly $200 billion over ten years. As Capretta notes, it is ironic that the President does not account for this provision, but includes several other Medicare provisions in his proposal.

• Non-coverage spending would add about $90 billion to the cost of the bill.

• Cost estimates for the President’s plan should apply to the ten year window from 2011 to 2020—not to 2019. This would add approximately $200 billion more to the cost of the bill. (more…)

Tags: CLASS Act, doc fix, health care costs, ObamaCare, OMB, President's proposal, taxes

Democrats’ Health Care Plans Come at High Cost to the Young

Extending health care to the uninsured and those who can’t get coverage for pre-existing conditions is the epicenter of Democrats’ health care bills, but achieving that goal requires adding younger, healthier Americans to insurance pools to hold down costs. And achieving coverage for sicker populations comes at a significant price to young Americans, according to a recent report by Rea Hederman and Paul Winfree of Heritage’s Center for Data Analysis.

Two provisions in the bills ensure that those with pre-existing conditions will be able to get coverage at an affordable cost. “Guaranteed issue” requires that insurance companies provide coverage to anyone, regardless of their medical history, and age rating would entail insurance companies charging older or sick customers no more than twice as much (three times as much in Senate bill) as they charge younger enrollees. This guarantees that premiums for the young will increase to subsidize the cost of covering the older and more sickly population. (more…)

Tags: health care costs, health care reform, insurance, ObamaCare, pre-existing condition, young Americans

Morning Bell: The Battle Over Obamacare’s Obituary Has Begun

Last month, Speaker Nancy Pelosi (D-CA) rammed through her version of Obamacare almost a week before the agency in charge of running Medicare and Medicaid, the Centers for Medicare and Medicaid Services (CMMS), could issue its non-partisan and independent analysis of the legislation. And for supporters of the President’s plan, it’s a good thing she did. The CMMS report eviscerated almost every single promise the President has made about his health care plan.

According to that report, Obamacare: 1) raises health care costs; 2) causes millions of Americans to lose their current health care coverage; 3) forces millions of Americans to pay fines and still receive no health insurance; 4) causes millions of seniors to lose their Medicare Advantage plans; 4) places millions of Americans on welfare; 5) jeopardizes Medicare access for all seniors; 6) worsens health care access for the poor.

This past Friday, CMMS issued another report, this time on Majority Leader Harry Reid’s (D-NV) version of Obamacare and the verdict was in many ways worse: 1) health care costs would rise by $234 billion; 2) 17 million Americans would be forced out of their existing health insurance; 3) 19 million Americans would pay $29 billion in taxes/fines and receive no health care in return; 4) 33% of all Medicare Advantage customers would lose their health care plan; 5) 18 million Americans would be put on welfare; 6) the $493 billion in Medicare cuts would force 20% of Medicare providers to become unprofitable thus jeopardizing access to care for all seniors; and 7) the explosion in Medicaid recipients would exacerbate existing health care access problems for the poor. (more…)

Tags: Centers for Medicare and Medicaid Services, health care costs, House Speaker Nancy Pelosi, ration care

Capretta: Insanity of the House Bill

Any hope for a health reform bill that would garner wide bipartisan support in Congress and accolades from the health care industries has been torpedoed by the latest House bill, HR 3962, according to respected health economist James Capretta, with the Ethics and Public Policy Center.

In the National Review’s Critical Condition, Capretta lays out the budget gimmicks and taxes that are central to the new legislation. “To sum it up, the House bill is nothing but a massive, uncontrolled federal entitlement expansion — at a time when central, looming threat to the nation’s long-term prosperity is the unaffordable health-care entitlements already on the federal books,” he writes.

Among the mentionable items in the bill that all Americans should be aware of:

– To say that the new House bill costs less, the new version lacks any repeal of the so-called “sustainable growth rate,” or payment formula for physicians treating Medicare patients. It’s scheduled to cut doctors’ fees by 20 percent next year. As Capretta notes, “Everyone knows it must be fixed, but the full, 10-year costs of repeal approaches $250 billion.” The Democrats’ solution is to repeal the cuts in a separate bill that doesn’t count toward the overall health reform tab.

– The bill massively expands Medicaid, the federal health program for the poor. Raising the eligibility limit to people making 150 above the federal poverty line will swell the program to 50 million Americans by 2019 (currently there are 35 million in Medicaid). This program already is costing most states billions of dollars and causing budget deficits. The Congressional Budget Office says the House bill increases Medicaid spending on an annual 8 percent level indefinitely.

– Payment-rate reductions in Medicaid and Medicare are not the health care efficiencies that Congress had promised. This will shift more health-care costs onto the middle class who are enrolled in private coverage while failing to slow down increasing health costs.

“There’s much else in this bill that would do great damage to the health sector and the American economy,” Capretta writes. “Heavy payroll taxes that will reduce low-wage employment. Mandates on employers that will drive up costs and reduce wages. Intrusive federal bureaucracies that will come between patients and doctors. They can do a lot of damage in nearly 2,000 pages.”

Tags: health care costs, House Bill, HR 3962, Medicaid, Medicare

Minnesota Lets Patients Shop Around on Health Care

This week, Minnesota became the first state in the nation to roll out a Web tool that allows residents to be health care shoppers when it comes to their medical care. According to a Star Tribune article, the Web site, mnhealthscores.org, was developed by MN Community Measurement, “a collaborative of state health care providers that collected the data from insurance companies.”

The site provides the average cost for 103 common medical procedures from 110 providers in the state, about 85 percent of primary care in Minnesota, the article said. More providers and procedures are expected to be added.

Gov. Tim Pawlenty, who announced the program this week, said in the article,”The right way to go is to a consumer-driven model” like Minnesota’s, ”not a government-centric model, particularly not a federal government-centric model.”

Tags: consumer-driven, health care costs, medical procedure, Pawlenty

Whole Foods CEO Urges Free-Market Health Reform

In an op-ed in today’s Wall Street Journal, Whole Foods Market Inc. CEO and Co-Founder John Mackey urged Congress and President Obama to consider several free-market alternatives to reforms being considered to overhaul America’s health system. His recommendations (many of which mirror those promoted by Heritage’s Center for Health Policy Studies) include:

– Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs).

Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits.

– Repeal all state laws which prevent insurance companies from competing across state lines.

– Repeal government mandates regarding what insurance companies must cover.

– Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year.

– Make costs transparent so that consumers understand what health-care treatments cost.

– Enact Medicare reform.

– Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren’t covered by Medicare, Medicaid or the State Children’s Health Insurance Program.

Tags: health care costs, Medicare reform, portable insurance, tort reform, transparency