Fix Health Care Policy

While many media reports are putting the 10-year cost for the new House health care reform bill at $894 billion, health care economist James Capretta points out the figure is “highly misleading.”

“For starters, the gross cost of expanded Medicaid coverage and a new entitlement to subsidies for health insurance is much higher than Democrats are suggesting,” according to the latest estimate from the Congressional Budget Office, Capretta writes in National Review’s Critical Condition. 

When you look at the gross spending increases from entitlement expansions for programs like Medicaid, the House bill tab comes to $1.055 trillion over 10 years, not $894 billion, Capretta notes.

Plus, “House Democrats have conveniently decided to take the so-called ‘doc fix’ out of the larger health-care bill and pass it along as a standalone measure, at a cost of $250 billion over 10 years.”

When you tally up the budget gimmicks, Capretta found the total cost for Congress’ health overhaul was a $1.5 trillion spending program, which far surpassed President Barack Obama’s $900 billion limit for health reform. Congress will plans to deal with the costs through higher taxation, passing other costs onto the country’s already-ballooning debt and cutting private Medicare benefits, Capretta writes. 

He goes further into the harm cutting Medicare Advantage (as detailed in the Senate Finance Committee bill) would have in a new Heritage Web Memo co-authored with Robert Book.

Tags: $1.055 trillion, HR 3962, Medicaid

Galen Institute President Grace Marie-Turner in a new blog questions how President Barack Obama can back the new House health care bill when it breaks many of the promises he and his Administration have been making for months.

Turner details how the legislation would break the following reform pledges:

– The health reform bill would lower health spending. In fact, the House bill pushes the federal cost curve up, not down, by costing $1.05 trillion in the first 10 years. And that’s not even addressing the “doc fix” issue that will cost $245 billion.

– Middle-class families would not be taxed. There are a wide buffet of tax increases in the House bill that violate the president’s pledge. And add to that the $33 billion individuals would pay because they didn’t want to buy expensive, federally mandated health coverage, according to the Congressional Budget Office.

– If you like your health insurance, you can keep it. A coalition of major business groups already said the House bill jeopardizes the health care insurance that employers provide to 160 million workers. Additionally, previous research has shown 88.1 million Americans would be shifted out of their employer-based health coverage if a public plan was introduced.

“The 400,000-word House health reform bill is absolutely astonishing in the level of government intrusion it would shove into the lives of every American, every business, and every health care professional. I won’t bore you here with the legislative jargon, but pick a page, any page, and you will see what I mean,” Turner writes.

Tags: Galen Institute, HR 3962, President Barack Obama

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

Business groups wasted no time in expressing their opposition to the new House health care bill that was released this morning.

A coalition of nine business trade groups sent a letter today to House Majority Leader Nancy Pelosi (D-Calif.) and House Minority Leader John Boehner (R-Ohio), detailing their opposition to the Affordable Health Care for America Act (H.R. 3962).

Specifically, the group admonished Congress for attempting to create a new government-run health insurance plan, mandate employers to provide health insurance and a federally require minimum benefits package for all insurance plans. The group, which includes the Business Roundtable, American Benefits Council, National Association of Manufacturers, National Retail Federation and Corporate Health Care Coalition, also said changes to ERISA could drive up administrative costs for companies that provide health coverage.

“The legislation falls short of the bipartisan goal of controlling costs and jeopardizes employer-sponsored coverage, which now serves more than 160 million Americans,” the letter said.

Tags: health reform, HR 3962, John Boehner, Nancy Pelosi