Fix Health Care Policy

Health Spending Down—Because People Are Avoiding Care

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

Obamacare In The Senate: Middle Class Taxes And Drug Reimportation

Following passage of a one-thousand-page omnibus spending bill, the Senate reconvened to continue consideration of HR 3590, the Senate health bill.

Middle Class Taxes. Senator Mike Crapo (R-ID) offered an amendment to recommit the Senate health bill back to the Senate Finance Committee with instructions to protect Americans who make less than $250,000 from tax hikes in the bill. In effect, the Crapo amendment would reinforce President Obama’s high-profile promise that Americans making less than $250,000 would not face tax increases.

In the Senate health bill, there are several provisions that would impose either a direct or indirect tax on people of all incomes, such as the tax on high-cost health insurance plans, the premium tax on insurance companies, the medical device tax and the pharmaceutical tax. Economists know, of course, that such taxes are passed-on to consumers. Nonetheless, the Crapo motion to recommit was defeated by a vote of 45-54.

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Tags: admendments, drug reimportation, middle class taxes, ObamaCare, prescription drugs, senate health care bill