Fix Health Care Policy

As the discussions over the fiscal cliff continue, the debate over entitlement reform is getting confused. The issue is not only how much savings constitutes reform, but also the underlying policies that get you there. Thus far in the fiscal cliff negotiations, Republicans have pushed for greater spending cuts, namely in Medicare.

To that point, a National Journal article commented, “In just a few short weeks, the dominant Republican line on Medicare has shifted from attacking the Democrats for making cuts to the program to demanding a new round of cuts to reduce the federal deficit.”

But this claim cannot be taken at face value, as all spending reductions are not created equal.

There are major distinctions between Obamacare’s Medicare cuts and Medicare reforms that would reduce spending and extend the life of the program.

Read the rest on The Foundry…

Tags: fiscal cliff, market competition, Medicare, ObamaCare, premium support, price controls, unsustainable

Click here to join us right now for our “Lunch with Heritage” chat. We are joined by Health Policy expert Kate Nix. She is taking your questions about the CLASS Act and Obamacare. Earlier this week, the House voted to repeal the CLASS Act, which is part of Obamacare. The CLASS Act would have set up a government-run long-term care insurance program that the Administration has already deemed unsustainable and unworkable.

 (Read the full exchange on The Foundry…)

Tags: CLASS Act Repeal, congress, ObamaCare, unsustainable

It may be only a few days since Congress began its new session, but it has already done some decent work. This week, the House Ways and Means Committee held the markup of H.R. 1173, which would repeal the Community Living Assistance Services and Supports (CLASS) Act.

The CLASS Act is a government-run long-term care insurance program and a major failure of Obamacare. It has been described in a variety of degrading ways, most notably as unsustainable, an insurance death spiral, and a ponzi scheme of the first order.

As Heritage has previously explained:

From its creation, the CLASS Act was completely unsustainable as written into law. Due to the effects of adverse selection, the program would charge high premiums that would deter less risky individuals from participating. Indeed, participating in the CLASS program would only appeal to those in poor health expecting to need long-term care in the future, further escalating premiums.

Thankfully, the inherent policy flaws of the CLASS Act have been recognized, and congressional action is being taken. Representative Charles Boustany (R–LA), a physician and chairman of the House Ways and Means Subcommittee on Oversight, is the sponsor of the repeal bill. In a recent Politico op-ed, he urges Congress to act and warns, “CLASS could return to haunt us if it isn’t fully repealed before October 2012. Legal experts at the Congressional Research Service warn that a federal judge could force [the Administration] to revive CLASS after this key deadline in the law expires.”  (Read the rest on The Foundry…)

Tags: CLASS Act, House Ways and Means, long-term care, repeal Obamacare, unsustainable

A recent Gallup poll revealed that 47 percent of Americans—a plurality—support repeal of Obamacare. While the reasons for the law’s unpopularity are limitless, its broken CLASS program and unsuccessful small business tax credit may play a role.

A few weeks ago, the Department of Health and Human Services announced it would halt implementation of the CLASS program, the government-run long-term care program created by the health care law, since it was unsustainable and unworkable. This put CLASS on life support, but since it isn’t dead yet, its repeal is crucial.

Earlier this week, the House Energy and Commerce Health Subcommittee moved legislation by Representative Charles Boustany (R–LA) one step closer to the President’s desk to repeal the CLASS Act.   (Read the rest on The Foundry…)

Tags: CLASS Act, Gallup poll, repeal Obamacare, unsustainable, unworkable

The House Energy and Commerce Subcommittee on Oversight and Investigation and Subcommittee on Health held a hearing last week on the future of the unsustainable, poorly designed CLASS program now that it’s on life support (though it still has a heartbeat). As Heritage analysts have already pointed out, there is a lot to look into in this flawed program.

CLASS was created as a voluntary, government-run long-term care insurance program. According to the legislation, it would be fully funded from the premiums paid by its beneficiaries, requiring no federal taxpayer dollars. But experts and Members of Congress from both sides of the aisle have long warned that the program wouldn’t work and would eventually cost taxpayers a pretty penny.

The Department of Health and Human Services (HHS) recently dropped a bombshell on Obamacare when it announced it will not be implementing the program. Their official report raised concerns about adverse selection in the program, pointing out that “if healthy purchasers are not attracted to the CLASS benefit package, then premiums will increase, which will make it even more unattractive to purchasers who could also obtain policies in the private market. This imbalance in the beneficiary pool would cause the program to quickly collapse.”  (Read the rest on The Foundry…)

Tags: CLASS, House Energy and Commerce Subcommittee on Oversight and Investigation, long-term care insurance, unsustainable

The Congressional Budget Office (CBO) recently released its annual Long-Term Budget Outlook, which highlights the effects of existing policy on the federal budget. The verdict: The current trajectory is “unsustainable.”

Growing federal health care spending is a major driver of future deficits. As CBO explains, “Spending for health care in the United States has been growing faster than the economy for many years, posing a challenge not only for the federal government’s two major health insurance programs, Medicare and Medicaid, but also for state and local governments and the private sector.” The report shows that the outlook is grimmer than ever, despite the vaunted “deficit reduction” claims of those in Congress who voted for Obamacare.  (Read the rest on The Foundry…)

Tags: Congressional Budget Office, long-term budget outlook, Medicare, ObamaCare, repeal the law, unsustainable

It’s a simple fact: You can’t sustain Medicare unless you transform the current—and unaffordable—system. But the left continues to falsely decry conservatives’ plans to achieve this, accusing them of plotting to end the program altogether. It’s ironic, then, that the left has diligently pursued a strategy of its own to “end Medicare as we know it.” That strategy boils down to this:

Downplay the problem. Writing for the Los Angeles Times, Michael Hiltzik claims, “One of the basic flaws of Ryan’s plan is that he folds Medicare’s long-term fiscal problem into the near-term problem of the federal deficit.” According to Hiltzik, “Medicare’s ills are wholly separate” from the need for deficit reduction.

Recent deficits are largely attributable to the economic recession and its effect on federal revenues. But while economic recovery will restore revenues to roughly their historical average, deficits will continue to grow as a result of runaway spending on entitlement programs. Currently, Medicare’s Hospital Insurance (HI) Trust Fund is in deficit. The Medicare Trustees reported that the red ink amounted to $32 billion in 2010 and will reach $34 billion this year. Due to the combined effects of an aging population and rising health care costs, there is no end in sight for the program’s deficits. Getting the federal budget under control can’t be done without serious restraint on the growth of Medicare spending.  (Read the rest on The Foundry…)

Tags: economic recession, federal revenues, Medicare, ObamaCare, Ryan budget, unsustainable

Last week, the Congressional Budget Office released its report on H.R. 2, the House-passed legislation that would fully repeal Obamacare. The takeaway message was that American taxpayers simply cannot afford Obamacare.

CBO’s initial scoring of Obamacare analyzed its effects from 2010 to 2019, including only six years of full implementation, since main spending provisions do not go into effect until 2014. The new document reports on 2012 to 2021, including an additional two years of full implementation. This still fails to show the true 10-year cost of the law, but gets a little closer. Over eight years, the gross cost of Obamacare’s coverage provisions jumps from $938 billion to $1.39 trillion, which includes $677 billion to create a new health entitlement offering generous subsidies to the middle class to purchase health insurance. (Read the rest at The Foundry…)

Tags: Congressional Budget Office, ObamaCare, taxpayers, unsustainable

Yesterday, the Congressional Budget Office released its annual long-term Budget Outlook, which provides a look at mandatory federal spending on health care after passage of the Patient Protection and Affordable Care Act.

One may have expected to see drastic changes after the passage of Obamacare. After all, this legislation was supposed to reduce costs and overall health spending. However, the CBO’s report highlights the unlikelihood that cost-containment strategies included in the new law will ever come to fruition.

In its projections, CBO looks at two scenarios. The extended-baseline scenario assumes that current law will occur as written. The second, more likely occurrence, is the alternative fiscal scenario, which makes realistic assumptions about the future behavior of lawmakers. For example, the extended-baseline scenario assumes that a 21 percent reduction to physician payments under Medicare will actually occur. But since its inception in 1997, these reductions have been suspended every year, known as the “doc fix.” Just days ago, Congress suspended the payment reductions for another six months, and you can be sure they will suspend it again when it expires in the future. The alternative fiscal scenario accounts for this. (more…)

Tags: Congressional Budget Office, federal health spending, Medicare, ObamaCare, unsustainable

This Wednesday CBO Director Doug Elmendorf gave a slide presentation on Capitol Hill titled: Health Costs and the Federal Budget. Elemendorf’s very first slide reads:

“Rising health costs will put tremendous pressure on the federal budget during the next few decades and beyond. In CBO’s judgment, the health legislation enacted earlier this year does not substantially diminish that pressure.”

The presentation concludes:

“Putting the federal budget on a sustainable path would almost certainly require a significant reduction in the growth of federal health spending relative to current law (including this year’s health legislation).”

In other words, our nation’s budget is on an unsustainable path and Obamacare did nothing to change that.

Tags: CBO Director Doug Elmendorf, federal budget, ObamaCare, rising health costs, unsustainable