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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.

View all comments (36) |

Pingback| 11.16.09 @ 12:35PM

Twitter Trackbacks for The American Spectator : AmSpecBlog : Obama Admin. Actuary Fi links to this page. Here’s an excerpt:

…Topsy Plugin – WordPress Shortened Links Linking to the spectator.org page http://bit.ly/1lkerE info http://bit.ly/3SwwRc info   3 tweets retweet The American Spectator : AmSpecBlog : Obama Admin. Actuary Finds Unsustainable Status Quo Cheaper than spectator.org/blog/2009/11/16/obama-administration-actuaries – view page – cached Obama Admin. Actuary Finds Unsustainable Status Quo Cheaper…

Pingback| 11.16.09 @ 12:40PM

The American Spectator : AmSpecBlog : Obama Admin. Actuary Finds … Admin China links to this page. Here’s an excerpt:

…Medicaid Services, a branch of the Obama administration’s Department of Health and Human Services, has found that the exact opp osite is true. See original here:  The American Spectator : AmSpecBlog : Obama Admin. Actuary Finds … By admin | category: admin | tags: block-doesn, both-user, buttons, department, human, human-services, medicaid-services, obama, want-certain | Admin official on…

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?

Pingback| 11.16.09 @ 1:57PM

A Deathblow for Obamacare - Political Forum links to this page. Here’s an excerpt:

…Washington Post Our House of Representatives somehow passed this non-sense, and now we wait to see what will become of it. I have heard nothing about this report until I found it posted on a blog. The American Spectator. Isn't this news worthy? __________________ You say you'll change the constitution Well, you know We all want to change your head You tell me it's the institution Well, you know You better free…

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.

Pingback| 11.16.09 @ 6:19PM

A Deathblow for Obamacare - Page 2 - Political Forum links to this page. Here’s an excerpt:

…Washington Post Our House of Representatives somehow passed this non-sense, and now we wait to see what will become of it. I have heard nothing about this report until I found it posted on a blog. The American Spectator. Isn't this news worthy? I agree with your assessment of the bill but not your conclusion. It will be very bad for the American people if this bill passes, but that doesn't matter. Neither Obama…

Pingback| 11.17.09 @ 12:07PM

Ironic Surrealism v3.0 » The Overbearing Overreach of Nanny State Health Care Knockin links to this page. Here’s an excerpt:

…Reform Despite Vow from Obama Middle-Class Americans Could See Higher Taxes The Rationing Commission Meet the unelected body that will dictate future medical decisions. Obama Admin. Actuary Finds Unsustainable Status Quo Cheaper than Obamacare UK: Thousands of family doctors ‘being paid not to give out antibiotics’ Related: Tweeting ObamaCare List of Senators Up For Re-Election In 2010 Inc. Contact…

Pingback| 11.17.09 @ 12:24PM

How can I make Dog Agility Equipment? | Workouts Fitness Wisdom links to this page. Here’s an excerpt:

…anything decent. And the cheaper it costs the better! Thanks! xx … Read the original post: How can I make Dog Agility Equipment? Related Blogs on Cheaper It Costs The American Spectator : AmSpecBlog : Obama Admin. Actuary Finds … Affordable Tubal Reversal Surgery Is VDI finally cheaper than traditional PCs for CapEx? – Brian … Related Posts Getting the Right Dog Agility Training…

Pingback| 11.30.09 @ 3:17PM

CBO: Senate's Health Care Reform Bill Would Cause Individual-Market Insurance Premium links to this page. Here’s an excerpt:

…what prices would be under current law) won't be affordable at all, especially for those who would've chosen not to purchase insurance otherwise. Given the sky-high overall cost of the bill, and the recent report by the Center for Medicare and Medicaid Services confirming that the legislation won't reduce overall medical spending, this doesn't exactly strike me as a model of affordability. I've got a longish…

Pingback| 12.8.09 @ 12:32AM

Economyincrisis.org – America's Economic Report – Daily | Tax Finance Wisdom links to this page. Here’s an excerpt:

…Daily Related Blogs on Recent Report Beatbullying's recent report on Cyberbullying Obama: “Job report best since 2007″ – CareersToday – Careers.org Obama Admin. Actuary Finds Unsustainable Status Quo Cheaper than … Related Posts Hoosiers reminded to report uncollected sales tax on Internet … House price rises and inheritance tax « The Economic Voice 2008 Economic Slow Down…

Pingback| 12.8.09 @ 11:36AM

Esquire's Fact-Challenged Attempt at Making Government Look Cool - Hit & Run : Reason links to this page. Here’s an excerpt:

…time CBO took a clear stand on the issue, the office said reform would bend the curve the wrong way. More recently, CBO has ducked the issue, saying it's not able to tell for sure. But Medicare's actuary says that reform is likely to increase medical spending. In other words, Orszag never actually got the particular piece of good news the piece claims he did. But maybe it doesn't matter now that he's got the…

Mobile tracker | 2.8.10 @ 8:26PM

Obama admitted that he made a few mistakes, great man!!

Pingback| 2.12.10 @ 7:01AM

Andrew Sullivan’s Island | America Watches Obama links to this page. Here’s an excerpt:

…bill, or to extend the solvency of the program, but not both. The Centers for Medicare and Medicaid Services — the agency that tracks national health care expenditures — has analyzed both the House and Senate health care bills. The chief actuary found that not only would the bills not contain the growth of health care spending, but each of them would actually raise national expenditures to a higher…

Potty Training | 2.24.10 @ 12:42AM

we cant expect him to be great... just better than bush LOL

Potty Training Boys | How To Potty Train A Toddler

Pingback| 3.16.10 @ 9:16AM

Doc2Doc Healthcare Reform » Blog Archive » It Figures: The Figures Lie When The Liars links to this page. Here’s an excerpt:

…Human Services, certainly not a fire-breathing anti-government concern, has projected that the bill’s cost are significantly more than doing absolutely nothing. (See: http://spectator.org/blog/2009/11/16/obama-administration-actuaries ) Some well documented estimates from outside government suggest that the bill’s cost will approach 2.5 – 3 Trillion dollars over the next 10 years, and…

pigment Red | 4.6.10 @ 3:53AM

Never frown, Ink Pigments
even when you are sad,Organic Pigments because you never know who is falling in love with your smile.

Pingback| 4.24.10 @ 12:09PM

HHS Actuary Finds Senate Bill More Expensive Than “Unsustainable” Status Quo links to this page. Here’s an excerpt:

…than if we simply did nothing — undermining the primary rationale for Obama’s health care push. In a report released last night, which reaches similar conclusions to its analysis of the House bill, CMS found that if the Senate health care bill passed, America would spend $234 billion more on health care over the next 10 years than if we did nothing. As Obama put it in his June speech to the…

More Blog Posts by Philip Klein

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