Promises, Promises -- Violated at Every Turn [Grace-Marie Turner]
President Obama repeatedly promised the American people that his health-reform plan would lower their health costs by $2,500 a year for a family.
The Congressional Budget Office and actuaries from his own administration say it just ain’t so.
— CBO’s analysis of Sen. Harry Reid’s bill shows that families purchasing insurance in the individual market would not see a reduction but rather an increase in their premiums by $2,100 in the year 2016. And that’s over and above the increases they already will be facing.
That means a family would be paying $15,200 for health insurance by 2016 if the Democrats’ bill passes, and $13,100 if it doesn’t. It’s clear why Americans are concluding that doing nothing would be better than passing this bill.
— Further, those receiving health insurance through their employers will pay even more for their insurance, with premiums for a family in a small business remaining about the same as they would without reform at $19,200.
— The big news the White House touted in the CBO report was that premiums for employees of large firms would remain mostly unchanged, meaning they would continue to go up almost as fast as they have been, reaching $20,100 for a family and $7,300 for an individual by 2016.
Advocates are quick to say that many people would qualify for subsidies under the Senate bill to help them pay these higher premiums. In other words, Congress will be raising taxes by almost $500 billion and cutting Medicare by $400 billion to help some people pay premiums that their own bill raises.
How are supporters of this legislation going to argue now that we need health reform to lower health costs — and boost our international competitiveness — when this legislation does neither?
The House bill is no better. Richard S. Foster, the chief actuary of the administration’s Centers for Medicare and Medicaid Services, has concluded that the legislation that passed the House last month would do little to reduce premiums for individuals. He concludes that proposals intended to lower health costs in both the public and private sectors would save only $2 billion over ten years, all of which is attributed to the increasingly controversial use of comparative-effectiveness research (as in mammogram recommendations).
He says only about 18 million Americans would be eligible for subsidies outside Medicaid, costing taxpayers $505 billion through 2019. But millions more Americans would be subject to expensive penalties for not buying coverage. Foster estimates that individuals would pay $62 billion in fines between 2014 and 2019, while businesses would be hit with $118 billion in tax penalties for a total of $180 billion.
And for all of this, national health spending goes up, violating President Obama’s pledge to “bend the cost curve” down. Foster concludes that “Total national health expenditures under [the House] bill would increase by an estimated 1.3 percent in calendar 2019.” In the Senate bill, the CBO says spending would be $160 billion higher than if the legislation were not enacted.
Keep your current coverage? Not under the Senate bill. The CBO found that most people in the individual market would have to trade in their current coverage to get policies written by Congress. Which means that millions of people will lose their current coverage, most involuntarily.
And Senator Reid is being especially dishonest with accounting gimmicks in trying to keep the overall cost of his bill under $900 billion. It counts ten years of taxes, with collections starting next month, but only six years of spending, starting in 2014. Budget analyst Jim Capretta estimates that the real cost of the first ten years of spending under the Senate bill would be $2.5 trillion.
This legislation making its way through Congress does nothing to lower costs; it saddles businesses with a plethora of new mandates and taxes, and it requires them to purchase even more expensive health insurance in the future than many can afford today.
Americans want health-care reform. But the reform Congress is contemplating is neither what they want nor what they have been promised. Congress should start over.
— Grace-Marie Turner is president of the Galen Institute.
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