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Obamacare: What Are The Real Costs?

By Stanley Feld MD, FACP, MACE

The traditional media is not discussing the economic consequences of President Obama’s healthcare reform program.

In these final days, traditional media is describing the horse race to the finish line for a deemed vote (“Slaughter rule”) vs. a partisan up and down vote on the Senate bill. The horse race is a distraction to avoid discussing the unintended consequences of the bill.

Congressman Paul Ryan is the Ranking Member of the House Budget Committee and senior member of the House Ways and Means Committee. His focus has been to bring fiscal discipline to federal spending. The House Ways and Means committee’s jurisdiction is tax policy, social security and healthcare. He has been addressing America’s long-term fiscal crisis and the dangers of explosive entitlement spending.

He has accused President Obama of being dishonest to the American public about the costs of his healthcare bill.

I can understand the emotional appeal of President Obama’s healthcare reform plan. His solution will not repair the healthcare system. It will increase the price of care, decrease access to care and decrease many freedoms.

President Obama has said repeatedly, “I will not sign a plan that adds one dime to our deficits either now or in the future.”

If passed by this phony congressional “Slaughter maneuver” it will simply make the healthcare reform bill’s failure to solve our healthcare system’s problems even more grotesque. I predict the bill will cripple Americans’ ability to maintain their present standard of living.

I am sure Paul Ryan is frustrated that his remarks to President Obama at President Obama’s Healthcare Summit would be thought of as disrespectful by Democrats.

No one has refuted Paul Ryan’s accusations.

President Obama continues to recite his unsound sound bites about his healthcare plan. He claims it will save Medicare, provide coverage for 30 million more Americans and reduce the deficit.

I believe that anyone who votes for this terrible bill should not be reelected. They are doing a disservice to Americans.

Congressman Paul Ryan of Wisconsin made the following points before President Obama at the Healthcare Summit.

  1. Medicare, right now, has a $38 trillion unfunded liability. That’s $38 trillion in empty promises to my parents’ generation, our generation, our kids’ generation
  2. Medicaid’s growing at 21 percent each year. It’s suffocating states’ budgets. It’s adding trillions in obligations that we have no means to pay for . . .

He then went on to say that the Congressional Budget Office scores bills with the premises and assumptions it is given. If the premises and assumptions are incorrect the score will be incorrect.

  1. “And what has been placed in front of them is a bill that is full of gimmicks and smoke-and-mirrors.”

He continued by saying;

“And if you take a look at the CBO analysis—analysis from your chief actuary—I think it’s very revealing.”

  1. “ This bill does not control costs. This bill does not reduce deficits. Instead, this bill adds a new health-care entitlement at a time when we have no idea how to pay for the entitlements we already have.”

The CBO letter to Harry Reid on March 11, 2010 states the bill will not decrease the deficit as President Obama claims, but it increases the deficit even as it increases costs.

“March 11, 2010

Honorable Harry Reid

Majority Leader

United States Senate

Washington, DC 20510

Dear Mr. Leader:

The Congressional Budget Office (CBO) and the staff of the Joint Committee onTaxation (JCT) have estimated the direct spending and revenue.

“Under the legislation, federal outlays for health care would increase during the

2010–2019 period, as would the federal budgetary commitment to health care.6

CBO now estimates that the federal commitment would increase by about

$210 billion over that period, rather than by $200 billion as previously estimated.”

If anyone is concerned about our budget increased deficit and increasing taxes for a bill that will not repair the healthcare system, understanding the numbers is important.

Paul Ryan dug into the details at the Healthcare Summitt;

  1. “The bill has 10 years of tax increases, about half a trillion dollars, with 10 years of Medicare cuts, about half a trillion dollars, to pay for six years of spending.”

“Therefore the true 10-year cost of this bill in 10 years? That’s $2.3 trillion.”

  1. “It takes $52 billion in higher Social Security tax revenues and counts them as offsets. But that’s really reserved for Social Security. So either we’re double-counting them or we don’t intend on paying those Social Security benefits.”
  2. “It takes $72 billion and claims money from the CLASS Act. That’s the long-term care insurance program. It takes the money from premiums that are designed for that benefit and instead counts them as offsets.”

Kent Conrad (D) Senate Budget Committee chairman said that this is a Ponzi scheme that would make Bernie Madoff proud.

Five hundred million dollars is taken out of Medicare to fund the healthcare reform bill. This is not shoring up Medicare solvency. It is paying to expand the program.

Paul Ryan did not stop there. He kept pounding away at the smoke and mirrors that the traditional media is not even analyzing much less mentioning.

  1. “You can’t say that you’re using this money to either extend Medicare solvency and also offset the cost of this new program. That’s double counting.”
  2. “According to the chief actuary of Medicare as much as 20 percent of Medicare’s providers will either go out of business or will have to stop seeing Medicare beneficiaries”.
  3. “When you strip out the double-counting and what I would call these gimmicks, the full 10-year cost of the bill has a $460 billion deficit. The second 10-year cost of this bill has a $1.4 trillion deficit.”
  4. “Probably the most cynical gimmick in this bill is something that we all probably agree on. We don’t think we should cut doctors [annual federal reimbursements] 21 percent this year and next. We’ve stopped those cuts from occurring every year for the last seven years”.

The “doctor fix” was supposed to go into effect January 1st. It was delayed until March 1st. Now it is delayed until October 1st. It was taken out of the Healthcare Reform Bill and placed in a separate bill because it added $371 billion dollars to the healthcare reform bill’s deficit.

President Obama’s Healthcare Reform Bill ignores and in actually hides these costs. Hiding these costs does not take the costs off the backs of taxpayers, the deficit, or future tax payers.

12.” I’ll finish with the cost curve. Are we bending the cost curve down or are we bending the cost curve up?”

“If you look at your own chief actuary at Medicare, we’re bending it up. He’s claiming that we’re going up $222 billion, adding more to the unsustainable fiscal situation we have.

13. “We don’t think the government should control our healthcare system. We want people to be in control. And that, at the end of the day, is the big difference.”

14. I’ve got to tell you, the American people are engaged. And if you think they want a government takeover of health care, I would respectfully submit you’re not listening to them.”

President Obama ignored Paul Ryan’s comments. He is ignoring the will of Americans. He is ignoring the fiscal consequences of a bill he is ramming through congress at the expense of the American people for something that will not work.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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*This blog post was originally published at Repairing the Healthcare System*


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