A Blow to Health Reform? CMS Sees Cost Problems With Bill
Email ABC News' Z. Byron Wolf reports: CMS, the independent administrator of Medicare, is out with a new cost assessment of the Senate health bill today and it estimates that, rather than lowering the bottom line of government health spending, the bill would increase government obligations by $234 billion over ten years – 0.7 percent. “It is one of the most serious indictments of the entire philosophy” behind the Democrats and President Obama’s bill, according to Sen. John McCain at a Capitol Hill press conference this afternoon. Perhaps the main argument Democrats have been using to argue for health reform is that it will “bend the cost curve.” And the bill will extend the life of Medicare by 5 years. And to that point, the report estimates that the bill will extend the solvency of Medicare’s hospital trust fund by 9 years It also finds that costs for individuals on Medicare would fall, perhaps as much as $700 per year for a couple on Medicare. That does not mean a rosy scenario, however, for hospitals serving Medicare patients. The report estimates that that 20 percent of those hospitals would become unprofitable by 2019. This could be disastrous especially in rural states, where there are fewer hospitals. The report, written by CMS Chief Actuary Robert Foster, also reasserts questions about whether the CLASS act – a new long-term home-care provision in the bill, would be viable after 2019. Granted, the CMS report comes with the caveat that its numbers are produced with “a substantially greater degree of uncertainty than is usually the case with more routine health care proposals.”
“The legislation would result in numerous changes in the way that health care insurance is provided and paid for in the US, and the scope and magnitude of these changes are such that few precedents exist for use in estimation,” according to Foster. The bill would reduce the number of uninsured in 2019 from more than 56 million Americans to around 23 million Americans. 20 million more people would find themselves on Medicaid under the bill – from about 83 percent of Americans covered to 93 percent. And the report suggests that a tax that would be imposed on insurers providing high-cost coverage plans would have a significant impact on health care costs. Democrats countered that the CMS report was actually good news. Democrats argued in a paper statement that in the last year of the CMS cost estimate, the spending growth slows under the Democrats’ bill and that slowing would continue after 2019. “There is a lot of great news in the report released today by the CMS actuary,” said Sen. Max Baucus, D-Mont. “This report is yet another independent, non-partisan analysis making clear health reform will extend the life of Medicare for nearly a decade and reduce premiums and cost-sharing for Medicare beneficiaries by nearly $500 per couple annually. Also, the report shows that health reform will ensure both the federal government and the American people spend less on health care than if this bill doesn’t pass, helping get a hold of America’s debt and keep more money in people’s pockets. This report is yet another clear indicator that we have to act – and act now.”
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That’s something I suspected, all along. It was actually going to increase costs, not reduce them.
Posted by: Rick McDaniel | December 11, 2009, 5:53 pm 5:53 pm
“…the bill will extend the life of Medicare by 5 years…the report estimates that the bill will extend the solvency of Medicare’s hospital trust fund by 9 years It also finds that costs for individuals on Medicare would fall, perhaps as much as $700 per year for a couple on Medicare.”
You have been reading Republican spin way too long if you think this report doesn’t support the healthcare reform bill… Sorta like the argument that a public plan would drive other insurers out of business since it would offer a better plan for less money thanks to not having to extract profits (I notice conservatives were pretty quick to drop that line of debate).
Posted by: jhw539 | December 11, 2009, 6:13 pm 6:13 pm
Public Option anyone?
Posted by: Lets get it on | December 11, 2009, 6:14 pm 6:14 pm
Not only is it going to increase the cost but, health insurance companies will put a cap on what they will pay per year. In the end the cost will be higher than what we pay now.
Posted by: CW | December 11, 2009, 6:57 pm 6:57 pm
The taxes start now the health care bill doesnt kick in till 2014 how does that make any sense? Should be get it now pay later or at least pay as you go.
Posted by: earl | December 11, 2009, 6:59 pm 6:59 pm
There no longer is a “public option”. Medicare deductibles and Medicare D have gone way up fpr 2010. While benefits have gone down. Seniors will have LESS money a month. Yet their expenses keep going up.
Posted by: CW | December 11, 2009, 7:00 pm 7:00 pm
Lets see if I have this correct! The left wants to expand Medicare to those as young as 55. By doing so, medical costs will go down? That is like saying my public school system will double, in terms of student population, but my property taxes will go down. I DON’T THINK SO!
The expansion of Medicare will immediately cause some health providers/facilities to either shut the doors or drop Medicare recipients all together. Anybody who believes this is a good idea, needs to see a therapist. Better yet, they need a therapist who accepts Obamacare.
Posted by: Mike in Ohio | December 11, 2009, 7:05 pm 7:05 pm
Why is it assumed that the public option is dead?
Posted by: Let get it on | December 11, 2009, 7:16 pm 7:16 pm
I say we (who still have health insurance) cancel it. If everyone in the US cancels their health insurance.
It will kill them in 2 weeks time.
That is a much better option than Obama or anyone else is coming up with.
It will also eliminate our elected officials trying ti reinvent the bandaid which is all they are doing that will increase all our costs in the end. We just all need to cancel our health insurance. For me, this will happen the end of the month anyways since Cobra looks dead. Then my choice is pay the mortgage or pay 1000.00+/mo for health insurance. I DON’T THINK SO.
Posted by: Jimh | December 11, 2009, 8:14 pm 8:14 pm
Cost, schmost…don’t worry about it! Our frugal government will just print some more money! As the botox queen has already told us–a healthcare bill must pass before Christmas. She doesn’t care what it looks like, just as long as something passes. I feel just giddy knowing that our esteemed lawmakers care SO much about us that they are willing to pass a bill no matter what it states, and spend the money for it even though we’re broke. Can you feel the love?
Posted by: Shoe | December 11, 2009, 8:25 pm 8:25 pm
The left wants to expand Medicare to those as young as 55. By doing so, medical costs will go down? That is like saying my public school system will double, in terms of student population, but my property taxes will go down. I DON’T THINK SO!
Mike in Ohio | Dec 11, 2009 7:05:23 PM
Currently, THERE IS NATIONAL HEALTH CARE – it’s the ER room. It’s inefficient and breathtakingly wasteful. Getting people $20 of free antibiotics is more efficient than $500 of ER treatment. Yes, the government obligation for health care may go up, but it makes more sense for the government to pay $10 billion than for hospitals and doctors to pay $100 billion treating the uninsured. That’s a great return I’m happy to see the private sector reap.
Posted by: jhw539 | December 11, 2009, 9:34 pm 9:34 pm
Now if anyone is shocked by this news,
then you have been living in a cave.
You do not need a college degree to
figure this out. Good old common sense
will tell you this. That is not a trait
that many in Washington have tho. What
a big cluster this has turned in to.
Posted by: wis134 | December 11, 2009, 9:34 pm 9:34 pm
We are talking .7 of a percent over 10 years. What is the fuss? More pweople are covered, and with better coverage.
You know it is time the news organization learn to report.
Posted by: Thinking | December 12, 2009, 1:43 am 1:43 am
Go ahead and pass the Health care bill, we can always revisit when the Dems are kicked out of office in 2010. How stupid do they think we are,
Posted by: Floyd Gilreath | December 12, 2009, 9:30 pm 9:30 pm
Medicare and Social Security seesaw back and forth every few years, with impending insolvency followed by massive tax hikes to save them.
Why would a socialized medicine system be any different?
Older Americans have been ripped off by the Ponzi scheme called Social Security. If they had been allowed to invest their own money, it would have grown far more than the piddly COLAs that seniors have to hope for each year (and Obama is rejecting COLAs for the next two years).
Social Security funds were supposed to have been put in a trust fund for future recipients.
Instead, Social Security funds were spent by Congress.
Every penny gone.
And you want to trust Congress with your health care? If so , you are truly insane.
Posted by: Joe White | December 12, 2009, 10:32 pm 10:32 pm
Obama is not “rejecting COLA’s”, which aren’t even determined by the president. Let’s let the Social Security Administration explain it-
Q. What is a cost-of-living adjustment (COLA)?
A. A COLA is an automatic adjustment in benefits that occurs annually. The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation. It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of one year to the third quarter of the next. If there is no increase, there is no COLA.
Q. Who determines the CPI-W?
A. The CPI-W is determined by the Bureau of Labor Statistics in the Department of Labor. By law, it is the official measure used by the Social Security Administration to calculate COLAs.
Q. Why is there no COLA for 2010?
A. By law, Social Security and Supplemental Security Income benefits increase automatically each year if there is an increase in the Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), from the third quarter of the last year to the corresponding period of the current year. This year there was no increase in the CPI-W from the third quarter of 2008 to the third quarter of 2009.
Posted by: gary | December 13, 2009, 9:55 am 9:55 am
Putting SS funds into the stock market is recipe for disaster. What do you for seniors when the Ponzi scheme known as the stock market goes down for decades at a time?
Posted by: gary | December 13, 2009, 9:56 am 9:56 am
Obama sure fought hard for at least a $250 payment to seniors in liu of the lack of a COLA this year. “No I won’t!” is Obama’s slogan. or: “you want me to actually do something???”
Posted by: Sally | December 13, 2009, 10:51 pm 10:51 pm
You guys are confused. The report says that government spending on health care will increase. It should because they are getting 31 million more people health care. The tax increases and Medicare cuts will pay for the legislation. Overall government spending on health care will increase but the average cost of care will decrease.
Posted by: Nathan Green | March 15, 2010, 8:16 pm 8:16 pm