FixHealthCarePolicy

Think Medicaid Expansion is a Good Idea? Think Again.

Most everyone agrees that decreasing the number of the uninsured is an important goal of health care legislation. What is not agreed upon is the best way to achieve that goal. Obama’s health care plan depends on expanding the number of Americans enrolled in Medicaid – the government-run program for the poor and disabled. The Congressional Budget Office (CBO) estimates the Senate bill would account for about 50 percent of the reduction in the uninsured population at a cost of $395 billion over 10 years.

New research by Heritage’s health fellow Brian Blase presents evidence suggesting that Medicaid expansion would be both costly and do little to improve the health of the uninsured. Blase examines the “TennCare” program, a Tennessee public program enacted in 1994 that dramatically increased the expansion of Medicaid to Tennessee’s uninsured population. The TennCare program quickly added over half a million individuals to Medicaid, enrolling one-fourth of the entire state. And costs also skyrocketed. Per-capita Medicaid spending from 1994-2004 increased by 146 percent in Tennessee, which was over double the national average increase of 71 percent.

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Tags: CBO, Medicaid Expansion, ObamaCare, President's proposal, TennCare

The President’s Health Plan Won’t Cut the Budget Deficit

One of the central arguments President Barack Obama has made on behalf of the health care plan he wants Congress to approve in coming weeks is that it would begin to address the problem of rising costs and thus also begin to bring down future federal budget deficits.

But will it?

The president’s plan has not yet been assessed by the Congressional Budget Office. But CBO has provided a cost estimate for the Senate-passed bill, upon which the president’s proposal is built. That estimate shows the Senate bill would reduce the budget deficit by $132 billion through 2019. CBO also says that the Senate bill would likely reduce projected deficits even more during the second decade of implementation.

But, as Republican Rep. Paul Ryan of Wisconsin noted at last week’s Blair House meeting, there are a number of reasons to be skeptical about this claim.

For starters, the Senate bill omits the president’s proposal to permanently restore a 21 percent reduction in Medicare’s fees for physician services, now in effect as of March 1. The administration estimates that overriding this cut will cost $371 billion through 2020. (more…)

Tags: CBO, doc fix, federal deficit, Medicaid Expansion, Medicare cuts, ObamaCare, 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

Obamacare — The Raw and Undeniable Facts

Each time a new study or report sheds light on the Obamacare’s true effects on Americans’ health care, the left fights back with tiresome accusations that the source is disreputable, partisan or “sides” with the insurance companies, ad nauseum.

How many professional experts are going to have to find fault with the House and Senate health bills before the Left and their allies in Congress stop repeating the age-old adage: “Everyone else is crazy, I alone am sane”? The terrible truth, of course, is that these reports are right.

In study after study, a few things about Obamacare stand out. Both the House and Senate bills will impose new taxes to pay for health care reform, many of which will affect low and middle income Americans, not just the rich. Both bills expand coverage by adding millions of Americans to Medicaid, one of the lowest-quality government health programs. Despite the President’s promise that “if you like it, you can keep it,” millions of Americans will lose the private insurance they currently have. And, no matter how you slice it, neither bill will “bend the cost curve” in health care spending; to the contrary, both bills increase national health expenditures above official projections under current law. It’s no surprise, then, that the majority of Americans oppose the big Congressional health bills , with 57% of Americans believing Obamacare will cause health care costs to go up, and 52% expecting the quality of care to decrease as well.

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Tags: bend the cost curve, CMS, Medicaid Expansion, ObamaCare

An Entitlement Certain to Grow

One of the main arguments President Barack Obama and other Democrats have made on behalf of the health care bills that have passed the House and the Senate is that they would reduce the federal budget deficit in the coming decade and in the years following as well. Their claim is backed up by the official cost estimates provided by the Congressional Budget Office that show modest improvements in the budget outlook through 2019 if the bills become law. But there are important reasons to be very skeptical that a final health care bill will improve the nation’s budget outlook, both in the short and the long term.

For starters, neither bill addresses the impending cut in the fees paid to physicians under the Medicare program. There is bipartisan opposition to these cuts, but the cost of fixing the problem would exceed $200 billion over 10 years. Consequently, congressional Democrats aren’t providing a permanent solution in the health care bills; they are in effect understating the cost of the reform program they have promised to deliver. If the so-called “doc fix” were included in the accounting, the health care reform effort would no longer be a deficit reducer at all. (more…)

Tags: CBO, doc fix, entitlement, Medicaid Expansion, ObamaCare

Not As Advertised

Now that health-care bills have passed in both the House and the Senate, Democrats just can’t seem to stop themselves from rhetorical excess. Just before Christmas, as the bill sponsored by Majority Leader Harry Reid was clearing its final hurdles in the Senate, Democrats took to the chamber floor and cable television shows to trumpet the “historic” nature of the legislation they were about to vote on — legislation that would, at long last, move toward their long-sought goals of “universality” and a government-guaranteed right to health care.

But is it so?

Yes, both the House and Senate would provide essentially free health insurance, through the Medicaid program, to many millions of low-income people. But, even so, enrollment in Medicaid is a far cry from getting good care when it’s needed. For starters, about 40 percent of the nation’s physicians don’t see Medicaid patients because the payment rates are too low, which also means certain hospitals have very low rates of Medicaid admissions. The truth is that current Medicaid enrollees already have trouble getting access to high-quality care when they need it because the network of providers willing and able to see them is constrained and over-burdened. The House and Senate bills would add 15 million or more people to this program’s rolls without any guarantee whatsoever that there will be doctors and hospitals that can see them.

Ironically, the very Democrats who most frequently tout “universality” as the goal are also the ones who ensure it will never actually come about by insisting that America’s lower-income families enroll in government-run insurance — with no other options.

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Tags: cost control, Lewin Group, Medicaid Expansion, Medicare, ObamaCare

Morning Bell: The Six Key Issues the House Must Cave On Before Obamacare Becomes Law

This morning at around 8 AM, the Senate passed, again on a straight party-line vote, Majority Leader Harry Reid’s (D-NV) manager’s amendment to the Senate’s version of Obamacare. This keeps the Senate on pace to pass the bill at 9 PM on Christmas Eve despite the fact that Americans overwhelmingly opposed the legislation. But even after the Senate gives President Barack Obama his $2.5 trillion Christmas present, the bill, assuming it is to be considered in regular order, still must go through a House and Senate conference.

President Barack Obama attempted to downplay differences between the House and Senate bills telling American Urban Radio Networks yesterday: “The Senate and the House bills are 95 percent identical. There’s five percent differences, and one of those differences is the public option. This is an area that has just become symbolic of a lot of ideological fights. As a practical matter, this is not the most important aspect to this bill.” We’ll let President Obama fight with his base abut how important a strong public option is to health reform, but a government run plan is just one of six key differences between the House and Senate bills:

Soak the Rich or Tax Everybody: The Senate bill relies heavily on a new excise tax on high cost health plans: a 40 percent tax on plan exceeding $8,500 for an individual and $23,000 for a family. The AFL-CIO and SEIU both call this a tax on working families. The Senate bill also includes a new premium tax on all insurers and the CBO confirms that the cost of this tax will be passed on to all Americans with private insurance. The House bill depends on a heavy new income tax targeted at top-earning taxpayers and small businesses. The 5.4 percent tax on individuals with incomes above $500,000, and on families with incomes above $1 million, is structured in a way that over time more and more Americans will be hit by this tax and small business owners would be particularly affected. (more…)

Tags: employer mandates, excise tax, individual mandates, Majority Leader Harry Reid, Medicaid Expansion, ObamaCare, public plan, senate health care bill, taxpayer funded abortion

The Reid Amendment: Sweetheart Deals and Interstate Warfare

Christmas is coming early for a few lucky states including Hawaii, Massachusetts, Nebraska and Vermont. But their good fortune will come at the expense of other states. Overall, the government health care plan is still alive and well in Majority Leader Harry Reid’s (D-NV) manager’s amendment released this morning, hiding in the form of expanding Medicaid eligibility and inserting State Children’s Health Insurance Plan (SCHIP) rules into the Exchange.

First, the winning states. Nebraska and Hawaii are easily identifiable because the Reid amendment specifies their sweetheart deals by name. While all the other states will lose the extra federal financing for new Medicaid eligibles after 2017, full federal financing will continue for Nebraska. Hawaii gets funding for Disproportionate Share Hospital (DSH) payments that it gave up years ago to expand Medicaid eligibility. Ironically, $18.5 billion in cuts to the DSH program in all the other states help finance the rest of the health care legislation. (more…)

Tags: CBO, manager's amendment, Medicaid Expansion, schip, Sen. Harry Reid

The Reid Compromise Does Nothing to Improve A Very Bad Senate Health Bill

Although the details have not been released, Majority Leader Harry Reid (D-NV) has floated yet another potential “compromise” to his health care bill. There appear to be two broad elements: a federal insurance plan run by the Office of Personal Management and a Medicare buy-in option for Americans over 55.

Don’t Be Fooled. There is nothing new or original about these ideas. Both these policies have been recycled from previously failed efforts. Senator John Kerry’s (D-MA) health care proposal from his 2004 failed Presidential bid included a federal plan run by the Office of Personal Management (OPM). The Medicare buy-in was proposed by President Clinton in 2000. Those ideas were bad when they were introduced and are no better today.

– New Federal Insurance Plan. The compromise proposal appears to envision giving the Office of Personal Management the authority to contract with a private, non-profit to administer a special federal health plan. There are several key problems with such an approach. First, running a stand alone health plan, in effect, a public plan for the entire nation, will undoubtedly result in higher taxpayer costs. In other words, the size of government, once again will grow. Taxpayers can expect new demands for funding. Second, if OPM was given broad power to negotiate and determine services, benefits, premiums, etc., this federal plan would be no different than the older version of the “ public plan” that so many are bitterly opposed to; merely because the public plan is ”private” in name only doesn’t change a thing. Finally, shifting this public plan option to OPM means the Director of OPM could end up as the ultimate health care czar, reporting directly to the President.

– Medicare Buy In. The compromise proposal suggests allowing individuals 55 to 64 to “buy-in” to the Medicare program early. This too has multiple problems. First, opening Medicare will lead to selection issues. As CBO points out, enrollees would likely be higher users of medical services which would be reflected in higher premiums. To address this, the government may likely subsidize these enrollees, adding more cost to the taxpayers. Second, it would also likely create a crowd-out effect, where the government buy-in option squeezes out the availability of private coverage, including retiree coverage from a former employer. Finally, Medicare is already fiscally unsustainable. This solution would only accelerate its doom.

– Medicaid Expansion. While reports claim that the idea of expanding Medicaid even further beyond what is currently in the bill appears to be off the table, it should be noted that while the Senate bill includes a Medicaid expansion to 133% FPL, the House bill goes much further, raising eligibility to 150% FPL. Therefore, an even bigger Medicaid expansion may not be a dead deal.

Still Plenty Wrong With The Bill. Regardless of the merits of Majority Leader Reid’s latest attempt at a compromise, there is plenty wrong with the Patient Protection and Affordable Care Act — massive consolidation of regulatory authority over health care to the federal government; unintended consequences of the employer mandate; constitutional concerns over the individual mandate; inequities created through the subsidy structure; massive Medicaid expansion; Medicare “savings” shifted out of Medicare; and a flood of new taxes that impact Americans regardless of income — to name just a few.

Tags: Medicaid Expansion, Medicare buy-in, Office of Personnel Management, public plan