Fix Health Care Policy

The Slow Dismantling of Obamacare

Things aren’t going so well for Obamacare.

Even Democrats in Congress aren’t huge fans any more. It seems after passing the law and finding out what’s in it, the allure has faded—so much so that Congress actually repealed part of Obamacare in the fiscal cliff deal last week.

That’s right—part of Obamacare has been completely undone. It was the Community Living Assistance Services and Supports (CLASS) Act, essentially a new entitlement program for long-term care. But this new government program for people who end up needing assisted living or other long-term services was poorly designed and bound to fail,  as Heritage’s Alyene Senger explains.

“CLASS was a bad deal for both taxpayers (who would likely have had to bail out the program) and beneficiaries (who would be better served by choosing among private options),” Senger wrote.

The program was so poorly designed that one of its own administrators warned Congress in 2011 that the program could collapse.

Read the rest on The Foundry…

Tags: bad deal, CLASS Act, entitlement, government program, ObamaCare, taxpayers

Six Reasons States Should Be Skeptical of Medicaid Expansion Cost Estimates

As states weigh their options regarding the Obamacare expansion of Medicaid, many have sought out cost estimates to assist them. However, in a new paper, Heritage experts Ed Haislmaier and Drew Gonshorowski caution state lawmakers that state cost estimates rest on key assumptions, some of which may be questionable.

There are six reasons state cost estimates could be unreliable:

Read the reasons on The Foundry…

Tags: bad deal, higher costs, Medicaid Expansion, ObamaCare, repeal the law, taxpayers, voluntary

Medicare at Risk: Visualizing the Need for Reform

Heritage’s new chart series, “Medicare at Risk: Visualizing the Need for Reform,” shows that, without the necessary structural reform, Medicare’s finances will have devastating consequences on the federal budget, not to mention taxpayers and seniors alike.

Medicare’s Impact on the Budget. Medicare spending is rising faster than any other part of the federal budget, and it’s a major driver of runaway deficit spending in the not-so-distant future. Retiring baby boomers and rising health care costs will cause Medicare’s shortfall to contribute to 81 percent of federal deficits by 2040. Clearly, the federal deficit cannot be contained without addressing Medicare’s structural problems.

Medicare’s Impact on Taxpayers. Medicare spending isn’t just busting the federal budget; its also consuming more of household budgets. In 1970, average Medicare spending per American household was $129. In 2021—just nine years from now—spending per household will be a whopping $7,987. Unless there is significant reform to deal with these rising costs, Americans will be faced with automatic benefit cuts or steep tax increases. The Medicare Part A payroll tax would have to increase by 84 percent just to make Part A alone solvent.

Read the rest on The Foundry…

Tags: budget, charts, debt, economy, impact, Medicare at risk, slideshow, taxpayers

Side Effects: Obamacare’s CO-OPs Put Taxpayer Dollars at Risk for No Good Reason

Yet another provision of Obamacare is expected to cost taxpayers more than they expected. The House Energy and Commerce Committee recently sent a letter to the Centers for Medicare and Medicaid Services (CMS) asking for details regarding the probable loss of $3.1 billion out of the $3.4 billion in Obamacare loans to its Consumer Operated and Oriented Plan (“CO-OP”). The estimate comes from the President’s Budget Appendix, and the committee is considering rescinding funds that haven’t already been obligated.

The Obamacare initiative gives CMS the authority to award $3.4 billion in loan subsidies to states to fund start-up costs and to help meet state solvency requirements for the health plans in the CO-OP initiative, The Committee’s letter explains that these loans are a bad investment for taxpayers: “[T]he amount of expected losses is estimated to be about $3.1 billion of the $3.4 billion appropriated (91 percent). These losses exceed the estimate HHS presented in its proposed rule.”

Read the rest on The Foundry…

Tags: bad investment, CMS, Co-Op, House Energy and Commerce Committee, President's budget appendix, taxpayers

CMS Projections Confirm Runaway Health Care Spending

Yesterday, the Centers for Medicare and Medicaid Services (CMS) released its new projections of national health spending trends through 2020. The findings, which estimate health care spending to reach more than $4 trillion by 2020, come as no surprise: Runaway spending has overtaken the United States health care system and is on the rise. More notably, the study confirms Obamacare does not “bend the cost curve” but only increases government’s share of spending in the health care system instead.

Already, the White House has tried to spin the report as a victory for its health care legislation. Writing for the White House Blog, White House Deputy Chief of Staff Nancy-Ann DeParle touted the all-time low growth rates of the past two years. Indeed, in 2010, health care spending remained an unchanged (yet still breathtakingly large) 17.6 percent of gross domestic product (GDP).

In dollars, the nation was estimated to have spent $2.6 trillion, growing by a new historic low of 3.9 percent from the previous year. But as the authors explain, the reason for decelerated spending was the economic downturn and the impact high unemployment had on reducing private coverage—nothing to cheer about. Reduced payments to private plans under Medicare Advantage also contributed to a decrease in Medicare spending.  (Read the rest on The Foundry…)

Tags: 2020, CMS, health care spending, Medicaid, Medicare, ObamaCare, repeal the law, runaway deficits, taxpayers

New CBO Report Proves We Cannot Afford Obamacare

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

Reid 2.0: Even Higher Premium Taxes

As part of Senator Harry Reid’s indefatigable effort to make each new version of the Senate health care legislation worse than the previous one, his Manager’s Amendment restructures and expands the health insurance premium tax included in the earlier versions of the Senate bill.

The earlier versions would have imposed a flat, $6.7 billion per year, health insurance premium tax (disguised as a “fee” imposed on private health insurers), starting in 2010.

The new version uses the same mechanism, but the tax doesn’t start until 2011 and is only $2 billion that first year — but then it increases to $4 billion in 2012, $7 billion in 2013, $9 billion in the years 2014, 2015 and 2016, and eventually $10 billion for 2017 and every year thereafter.

(more…)

Tags: health insurance, ObamaCare, premium taxes, Sen. Harry Reid, taxpayers

Sen. Joseph Lieberman (I-Conn.)

“I think that a lot of people may think that the public option is free. It’s not. It’s going to cost the taxpayers and people that have insurance now, and if it doesn’t, it’s going to add terribly to our national debt.” — (October 28, 2009, Wall Street Journal)

Tags: national debt, public option, taxpayers