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Obama Admin. Actuary Finds Unsustainable Status Quo Cheaper than Obamacare
One of President Obama's primary justifications for pushing health care legislation has been that the status quo is "unsustainable" because of the skyrocketing cost of medical care in the United States. The way to rein in costs, he argues, is to do adopt the policies that he and his fellow Democrats are proposing. But a new report by the government actuary at the Centers for Medicare and Medicaid Services, a branch of the Obama administration's Department of Health and Human Services, has found that the exact opposite is true.
CMS took a close look at the health care bill that was passed by House Democrats and endorsed by the White House, and it found that not only would the bill not reduce health care costs -- it would increase them. Time and again, we have been reminded that the United States spends a higher percentage of its GDP on health care than any other nation -- about 16 percent. As Obama put it in his June speech to the American Medical Association, "If we fail to act, one out of every five dollars we earn will be spent on health care within a decade." Yet if we adopt the legislation supported by Obama -- which finances expanded coverage through tax increases and Medicare cuts -- health care spending will actually rise to 21.1 percent of GDP, according to CMS, compared to 20.8 percent if we simply do nothing.
"Make no mistake: The cost of our health care is a threat to our economy," Obama told AMA. "It's an escalating burden on our families and businesses. It's a ticking time bomb for the federal budget. And it is unsustainable for the United States of America."
I suppose a liberal could still argue that it's better to cover more people even if it will cost us more as a nation. But given that Obama has spent much of the year arguing that the reason we need to do something about health care is that the status quo is "unsustainable," then it's pretty hard to justify health care policies that are more costly than the status quo.
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Bob| 11.16.09 @ 1:23PM
Philip, while I agree that Obamacare (and the Republican alternatives) don't do much to reduce costs and don't do anything to increase competition, your slanted topline analysis is a bit misleading. First of all, while there is a $406 million net increase, the cost of increasing coverage to more individuals is $935 million which means there is an overall reduction of $529 million for the current level of coverage. These numbers also exclude the tax increases called for in the bill which lowers the net cost of the plan.
I know you didn't want to confuse the non-analytical bloggers on this site, but this is clearly misleading.
That said, I agree with you that this is NOT the plan we need nor does it increase competition or provide for tort reform. Again, I would support a plan that nationalizes health insurance so that anyone can buy any plan, and has coverage for emergency and catastrophic care since we require doctors and hospitals to do that anyway. Then, people could buy the coverage they desire from the vendor they want. If they want Cadillac coverage, they can get it. If they are willing to wait longer for appointments or have higher deductibles, they can get it. However, they are responsible for their own decisions and if the policy they buy doesn't cover the disease they get, they are out of luck.
Philip Klein| 11.16.09 @ 2:42PM
I assume you mean "billion" rather than "million," but still, there's nothing misleading in my post. Your numbers refer to the federal budgetary impact, whereas I was talking about the effect on total health care spending in the nation. That's the number that people refer to when they talk about "bending the cost curve," and what Obama was talking about when he said "If we fail to act, one out of every five dollars we earn will be spent on health care within a decade."
edward del colle| 11.16.09 @ 3:15PM
you gents can't be serious! when politicoes offer unlimited benefits for small cost which is at the heart of the medicare trap, what do you expect. the elderly are the wealthiest grouping of citizens. the well off there don't pay enough in premiums! the AARP are parasites and moochers and self serving! the self employed don't receive the same tax benefits as workers insured through work or part of the ERISA self insured! you subsidize something you're going to get a surfeit. the feds need an overhaul in spending outside of health care, tax rates need to come down for all groups;think flat tax. nationalisation is an unmitigated disaster. do you guys remember responsibility, humility and personal sacrifice. health insurance was not meant to be comprehensive, but catastrophic.
E.E. CUMMINGS| 11.17.09 @ 5:38AM
I just have to ask--if you don't capitalize any other words, why do you capitalize AARP and ERISA?
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RightKlik| 11.16.09 @ 2:00PM
"I suppose a liberal could still argue that it's better to cover more people even if it will cost us more as a nation."
The people ARE covered. Some people lack insurance, but they can go to the E.R. Putting them on a government-run insurance plan won't do much change their health care for the better. We'll be giving them a card and putting them in line.
Tim| 11.16.09 @ 2:48PM
The Government buys and distributes all flu vaccines. What a fine job they are doing too. Can't wait for them to take over the rest.
SBVOR| 11.16.09 @ 3:43PM
Typo alert:
"Obama but it" should be "Obama put it".
Stan Redmond| 11.16.09 @ 4:01PM
The simple question to ask any (alleged) representative is "Why does this bill NOT eliminate the restriction to purchase medical insurance across state lines?"
I'm for the WalMart method of fixing health care. WalMart revolutionized the pharmacy with their 4 dollar a month prescriptions, a capitalist entity like that can revolutionize health care delivery. Would you get world class services at a WalMart doctors office? No, but you would get access to simple procedures at a low cost. BUT, nope, we have to keep in state insurance monopolies controlled by insurance regulators who treat insurance like personal playthings by mandating what is covered.
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Mobile tracker| 2.8.10 @ 8:26PM
Obama admitted that he made a few mistakes, great man!!