Fix Health Care Policy

The Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) recently published its annual estimate of U.S. health spending in the journal Health Affairs. The report shows that growth in health spending remained slow in 2010. Medical expenditures grew at an annual rate of 3.9 percent, up just 0.1 percent from 2009. However, the slow growth doesn’t represent a decrease in health care costs, but a reduction in utilization and intensity of medicine. People are choosing the less costly alternative of avoiding the doctor and not taking expensive prescription drugs.

The report primarily attributes the slow growth to effects of the recent recession:

Including the highest unemployment rate in twenty-seven years, a substantial loss of private health insurance coverage, employers’ increased caution about hiring and investing during the recovery, and the lowest median inflation adjusted household income since 1996.

Despite CMS’s and other health economists’ conclusion that the recession led to slow health spending growth, the Obama Administration published a blog stating that Obamacare is responsible, with no mention of the recession. Nancy-Ann DeParle, Assistant to the President and Deputy Chief of Staff, wrote that “(These numbers) do show why the Affordable Care Act is so important. And we’re confident the law will continue to help hold down cost growth in the years ahead.”  (Read the rest on The Foundry…)

Tags: CMS, health care spending, Medicare, ObamaCare, prescription drugs, repeal the law, utilization

Heritage Policy Analyst Kathryn Nix recently released a paper explaining why the premium support, or defined contribution, model for Medicare reform found in Heritage’s Saving the American Dream is the best way to get out of our health care spending and debt crises. Several elements of this approach to reform have already been applied to the program under Medicare Part D and Medicare Advantage. Writes Nix, “Applying their successes to the rest of Medicare can restore permanent solvency to the program, preserve robust access to high-quality care, encourage continued physician participation, and strengthen Medicare as real insurance for tomorrow’s seniors.”

The Heritage plan would replace the current “defined benefit” structure of Medicare with a defined contribution for seniors to offset their costs, whether they choose to enroll in traditional Medicare’s fee-for-service program, keep their existing private health insurance and bring it with them into retirement, or purchase another private plan that better suits their personal needs.  (Read the rest on The Foundry…)

Tags: debt crises, fee-for-service, health care spending, Medicare, ObamaCare, Part D, Saving the American Dream

Yesterday, the Centers for Medicare and Medicaid Services (CMS) released its new projections of national health spending trends through 2020. The findings, which estimate health care spending to reach more than $4 trillion by 2020, come as no surprise: Runaway spending has overtaken the United States health care system and is on the rise. More notably, the study confirms Obamacare does not “bend the cost curve” but only increases government’s share of spending in the health care system instead.

Already, the White House has tried to spin the report as a victory for its health care legislation. Writing for the White House Blog, White House Deputy Chief of Staff Nancy-Ann DeParle touted the all-time low growth rates of the past two years. Indeed, in 2010, health care spending remained an unchanged (yet still breathtakingly large) 17.6 percent of gross domestic product (GDP).

In dollars, the nation was estimated to have spent $2.6 trillion, growing by a new historic low of 3.9 percent from the previous year. But as the authors explain, the reason for decelerated spending was the economic downturn and the impact high unemployment had on reducing private coverage—nothing to cheer about. Reduced payments to private plans under Medicare Advantage also contributed to a decrease in Medicare spending.  (Read the rest on The Foundry…)

Tags: 2020, CMS, health care spending, Medicaid, Medicare, ObamaCare, repeal the law, runaway deficits, taxpayers

Red Alert! Conservatives in Congress and elsewhere should be warned: The Administration’s latest signal for “compromise” may end up as little more than an expansion of existing bad policy, rather than a serious effort to enact substantive reforms. And only substantive reforms can change the perverse incentives that plague giant entitlement programs and have worsened America’s deepening financial crisis.

Consider some of the latest ideas that have surfaced in the media for finding “savings” in health policy:  (Read the rest on The Foundry…)

Tags: compromise, debt limit talks, health care spending, Medicaid, Medicare, ObamaCare

Last night in the State of the Union address, President Obama stated that “the only way to tackle our deficit is to cut excessive spending wherever we find it—in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes. This means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. Health insurance reform will slow these rising costs.”

Is it possible that the President has already forgotten that the health care law included a massive expansion of the broken Medicaid entitlement? According to projected national health expenditures from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS), Medicaid spending in 2019 will be $896.2 billion. Without the health care law, CMS projects that the amount would have been $802.4 billion. (Read the rest at The Foundry…)

Tags: broken entitlements, expanded coverage, health care spending, Medicaid monster

Congressional Budget Office (CBO) Director Douglas Elmendorf recently spoke at the University of Southern California about the economic impact of Obamacare. He predicts that Obamacare will further depress the nation’s employment picture.

CBO’s analysis of Obamacare predicts that it will reduce the amount of labor being used in the economy by roughly half a percent. Elmendorf states that this impact will be small, but in reality the impact is small only in relative terms. For instance, a half-percent loss in jobs in the American economy today would translate into about 750,000 additional Americans losing work. (more…)

Tags: Congressional Budget Office, Douglas Elmendorf, health care spending, job loss, ObamaCare

As America closes in on the six-month anniversary of the passage of Obamacare and prepares for the November elections, liberal health groups are revving up to defend the unpopular new health care law. But the platitudes offered to justify the massive overhaul of the health care sector haven’t held up—as Heritage’s new online feature, Obamacare in Pictures, shows in graphic detail.

Heritage’s Center for Health Policy Studies has compiled the best and most recent research on the impact Obamacare will have on various aspects of the health care system. These charts (available for individual download or as a package) illustrate the unintended consequences of the new law and expose the unproven claims the President and other proponents of a government overhaul of health care made during the debate, such as: (more…)

Tags: health care spending, health insurance coverage, Medicare trust fund, Obamacare in Pictures, unintended consequences

In preparation for the Health Care Summit, President Obama unveiled his first official health care proposal. It is intended to reconcile the differences between the highly unpopular House and Senate bills. Curiously, President Obama’s latest iteration of the liberal health policy agenda includes more federal power: the power to control “private” health plan premiums.

Price Controls. According to the President’s proposal, a new “Health Insurance Rate Authority” would oversee rate review for private insurers, so that “if a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates, or take other actions to make premiums affordable.” On the face of it, this means price controls on health insurance.

The President knows the unhappy history of price controls, and the genuine misery- shortages, mainly- that such a policy guarantees. Think of the long, hot gasoline lines of the 1970s, courtesy of the Carter Administration. (more…)

Tags: health care spending, Health Care Summit, health premiums, President's proposal, price controls

Nancy-Ann DeParle, the Director of the White House Office of Health Reform, posted a note – ironically titled “Reality Check” – on the White House blog this morning claiming that a new report from the federal government’s health actuaries supports the administration’s position on health care reform.

But all that report says is that U.S. health care spending continues to increase – even though the rate of increase actually hit a historic low in 2008 (the latest year for which figures are now available). DeParle’s argument is basically this: We spend too much on health care, therefore the reform proposals currently in Congress will fix everything.

However, DeParle seems to have missed the actuaries’ earlier report on what those reform proposals will actually do – which is, to make health care spending grow faster, not slower. In particular, actuaries estimate that if the Senate health reform bill becomes law, total U.S. health care spending would increase by 0.7%, or $234 billion through 2019. And that’s after taking into account what little savings would be achieved by cutting Medicare benefits and encouraging employer to cut health benefits by taxing private insurance plans that are “too generous.”

(more…)

Tags: health actuaries, health care spending, Nancy-Ann DeParle, White House