What the Senate Health Bill Will Really Cost 13 comments
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Senate Majority Leader Harry Reid unveiled his health bill on Wednesday. As everyone knows by now, the Congressional Budget Office (CBO) estimates that the bill would spend $848 billion to expand coverage over the next ten years, reducing the number of uninsured in 2019 by about 31 million. (The House bill would spend $1.05 trillion over the next ten years, and would reduce the number of uninsured in 2019 by about 36 million.)
As regular readers know, CBO reports two estimates of the cost of expanding coverage: the gross cost, which reflects all new spending and tax incentives to increase insurance coverage, and the net cost, which subtracts any tax revenue increases associated with coverage policies. Leader Reid, Finance Chair Baucus and their Senate colleagues deserve credit for emphasizing the higher figure in explaining the cost of their bill. In contrast, House leaders tried to focus attention on the lower, net cost of their bill, which led to unnecessary confusion (nb: the net coverage cost of the Senate bill is $599 billion versus $891 billion for the House bill.)
Everyone following this debate should keep in mind, however, that even the gross coverage figures do not capture all the costs of these bills. As I’ve pointed out several times (e.g., here and here), the health bills include many important provisions in addition to those expanding coverage. Many of those non-coverage provisions are intended to save money and thus pay for the coverage expansions. But some of the provisions expand spending on other health programs.
To get a fair read on the total cost of the health bills, we should therefore add together the gross cost of coverage expansions and the cost of the other provisions that increase spending (or decrease revenues). I estimate, for example, the real gross cost of the Senate health bill is $940 billion over ten years:
As noted in the table, the biggest non-coverage items are new discounts for drug purchases in the Medicare Part D program, a new fund to finance efforts in prevention and public health, and a one-year doctor “fix.” Together with other provisions, they add up to a bit more than $90 billion in additional spending, Along with about $1 billion in tax reductions, that means the bill costs $940 billion over ten years, about $92 billion more than for coverage alone. (In contrast, the House bill has a total cost that’s up near $1.3 trillion.)
Caveats: CBO does not calculate a total cost figure for the health bills. The bills include dozens of policy changes, and it would be difficult (perhaps impossible) to allocate all their impacts to specific provisions. Thus, my figures should be considered approximate. I calculated the $90 billion figure for additional spending by adding up all the individual line items in Table 4 of the cost estimate that increased direct spending, with a couple of exceptions. First, I did not include the interaction effects that CBO lists as the end of the estimate because I was not sure how to allocate them; the interactions are large and could have a material effect on my estimate, potentially up or down. Second, there was one policy that led to both spending increases and spending decreases; I included the net spending increase in my figure. I am certainly open to other suggestions about how to add up the other spending in the bill. It’s also worth noting that I have taken as given CBO’s estimate of the gross cost of expanding coverage. There are some nuances in the calculation of that figure (e.g., the treatment of payments in a reinsurance program) that I need to understand better.
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Our freedom.
These two items are not technically part of health care reform, and even though you are pricing these in they should be separated. The Medicare Part D Program discounts should be considered as a "fix" from the Republican passage of the bill without paying for it, and the Doctor "Fix" has been a separate bill, attended to on an annual basis for the past several years. I don't see why these "fixes" should be included in the total.
www.oecdwash.org/PDFIL...
The reason is insurance companies- doctors were telling me 15 years ago this was happening. Every MD I know (all 5 of them) hate insurance companies, 2 of them are not "in the network" and one bailed due to malpractice premiums.
There must be some doctors here on SA, am I wrong? I can't be that far off, the AMA is suing Aetna, Cigna, Wellpoint and has already settled with others;
www.ama-assn.org/ama/p...
I really don't care since I don't use insurance. Don't feel the need to pay for other peoples problems.
Try this exercise. Use your favorite investor tools & add up the 1 year profits of Wellpoint, Cigna, Aetna, United Health & Humana. Then calculate the percentage those profits represent relative to total US health expenditures.
I get 8.6 $B in profits and 2.2 $T in total health expenditures. That means those terrible health insurers are responsible for gouging us consumers with a whopping 0.4% in extra costs.
I have to admit, I have no idea how either of these healthcare bills will provide affordable coverage. In fact, if as it sounds, insurers will be prohibited from refusing those with pre-existing illness, the cost of insurance for those in the 45 to 65 year range will rise even further. As an example, my wife and I are in our mid 50's in good health, on no medications, and we carry coverage for our healthy 22 year old daugher. $980 per month, with a $6000 deductible. While I can afford it, what percentage of the population whose employer doesn't provide coverage can possibly afford that amount? I can't imagine that this won't rise a few hundred a month or more if my insurer can't restrict those with pre-existing illness.
The solution as it seems for both bills, is to expand Medi-caid coverage, put a large enough fine out to encourage young healthy people to take out health insurance, and make the problem of affordability even worse for those in the currently most unaffordable range. I'm sure the math works... force the young and healthy to buy coverage, add a number of millions to Medi-caid rolls which states currently can't afford, and you'll total a large enough increase in "insured" lives to more than make up for the numbers of upper middle class people who will no longer to be able to afford their current barely affordable premiums.
Can anyone explain the point of these bills?
control and power over a once free population. more constitutional destruction and usurpation.
how much will u.s. sheeple take?
Ever stay in the hospital? If so, take a look at your itemized bill, (if you get one) and see what the charges are. You can go to the most expensive store in the state and get anything that's on the list cheaper than a hospital charges you. They even put items on the list that you didn't get. As far as hospital rooms go, you can find the most expensive motel or hotel in your area and the hospital room, no matter how small or old or poorly equipped will be more costly.
I once had a doctor do no more than touch my collar bone and say "It's healing nicely" and he charged me $189! That was over 20 years ago; I shudder to think what he'd charge now. Maybe it's not all about insurance companies gouging...maybe the medical industry should be reigned in as well.
If you show up at an emergency room now, with no insurance, you'll be treated.
We have millions of illegal immigrants taking advantage of this.
Those of us with insurance pay more to subsidize this.
Stop giving free coverage to non US citizens and you've pretty much solved the escalating prices problem.
Then, allow juries to award damages to defendants of frivolous lawsuits.
Then, put a cap on "Pain and Suffering".
Then, allow insurance companies to compete over state lines.
This bill before the senate is nothing more than a giant cookie jar that will be raided.
Guess what happens when people are denied basic healthcare because there is not enough money in the budget? They die.
Then the politicians will run on a platform of increased healthcare taxes.
It will be a vicious cycle of death and taxes.
The beautiful part for the politicians is that anyone who opposes higher taxes in the future will be condemning grandma to death.
Think about that for a minute. A bag of ice can make more than an accountant.
YH: Point by point. Sentence by sentence, I concur with what you wrote.
As for illegal immigrants getting free emergency room care I think I've found a solution: Why don't we take the money that free healthcare costs for them and spend that on enforcing the border and on deporting illegals. We'll use our own unemployed people to do menial jobs or lose their unemployment.
As the responses to this article indicate, everyone knows what the problem is. The costs of providing healthcare in this country, have risen so much faster than wages, that the healthcare is no longer affordable for the majority of people in this country. The costs of providing healthcare for those over 65 and those with low income have also exceeded the ability of the taxpayer to provide short of even higher taxes.
My response to this article is that its an exercise in futility to attach a "price tag" to either the Senate or House bills. Who really thinks the 848 billion figure cost of providing expanded "insurance coverage" for the last six out of ten years is anywhere near accurate. The 11 billion dollar figure for a one year Medicare doctor "fix", will by the House calculations cost $210 billion over 10 years. Since including the full cost of this "fix" would exceed the amount that the Senate was willing to admit to, they simply left off the costs of years 2 through 10. I'm sure this just one of many places the Senate simply put in whatever figure worked for them.
Both bills are simply a way to raise revenue and decrease government payments for uncompensated care. Both bills will increase rather than decrease the cost of purchasing private health insurance. However, by forcing young healthy people to purchase insurance, you have a new pool of money funneling into the health care system. Since that group will not materially increase their current use of services, it will allow congress to decrease the amounts Medicare pays hospitals to make up for the costs of uncompensated care. This will allow congress to ignore Medicare insolvency for a few more years.
While I applaud the author's and anyone's attempt to examine the actual costs of legislation, we have all become numbed by the dishonesty of both political parties, that we end up losing track of the reality that figures congress uses in estimating costs are seldom rooted in fact.
As a matter of "disclosure", after practicing medicine for 28 years I see no solution to the healthcare cost problems other than national health insurance. Not that we couldn't make the necessary changes with the current system, its just that neither party will be willing to take on the true cost issues until they can no longer hide the costs.