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DAVID WALKER - "OBAMACARE ADDS $1 TRIILION TO DEBT"

The Peterson Foundation, run by David Walker (a truly honest man), published an assessment of the healthcare plan today. I trust their work. Essentially, the bill would cover most of the uninsured, but it will add at least $1 trillion to the National debt in the next 20 years. They exclude the debt interest costs which would add another $500 or so billion to the number. Sounds like a normal government program. Roll it out quickly, don't worry about details, and let our grandchildren worry about the unfunded liability. It is paid for by much higher taxes on the rich (subject to change by the Democrats based on how much they need to spend) and savings from medicare and medicaid reforms. I had to laugh at that line item. If we could save that kind of money from reforms, why haven't we done it already? These savings will be bogus. Government never ever increases efficiency or saves money. Never.

Keep these facts in mind when Obama tries to sell you tonight.

 

Health Care Bill: Coverage Gain, Fiscal Pain

Click to download the full report
NEW YORK (September 9, 2009)--A mixed picture emerges from a new study commissioned by the Peter G. Peterson Foundation on America’s Affordable Health Choices Act of 2009 (H.R. 3200). The study, conducted by The Lewin Group, provides a critical look at longer-term cost implications of a major comprehensive health care reform proposal, estimating the impacts through the year 2029, making it the first analysis of health care reform costs beyond 2019. The study examines the House legislation as amended by the Energy and Commerce Committee. The Foundation plans to commission similar analyses of other major reform proposals, including the one from the Senate Finance committee, as legislation is introduced.

Spending Changes 2010-2019 2020-2029 2010-2029
Medicaid Eligibility Expansion 375 1,086 1,461
Premium Subsidies 667 2,228 2,895
Employer pay or play payroll taxes -291 -693 -984
Public Plan Start-up 2 0 2
Retiree Reinsurance Program 10 0 10
Medicare and Medicaid Payment Reforms -231 -735 -966
Changes in Other Federal Programs -3 -8 -12
Total changes to spending 530 1,877 2,407
Revenue Changes 2010-2019 2020-2029 2010-2029
Taxes on High Income 588 1,148 1,735
Employer Tax Credit -64 -165 -228
Penalties for Uninsured 67 135 202
Taxes on Changes in Wages -100 -250 -350
Total changes to revenue 491 868 1,359
Total impact on federal deficit 39 1,010 1,048
Note: Because of decimal rounding, some numbers may not fully add up.
SOURCE: PGPF analysis of The Lewin Group, Long-Term Cost of the American Affordable Health Choices Act of 2009: As Amended by the Energy and Commerce Committee in August 2009 (September 9, 2009).


"This nation needs to engage in comprehensive health care reform that will include some level of universal coverage. At the same time, this study shows that the top priority needs to be reducing total health care costs and the rate of increase in future costs. For health care reform to be fiscally sustainable, it must not just pay for itself over 10 years and beyond, it should also result in a significant reduction in the tens of trillions of dollars in the federal government's unfunded health care promises,” said David M. Walker, President and CEO of the Foundation.

The study indicates that America's Affordable Health Choices Act of 2009, as amended by the Energy and Commerce Committee, would expand health insurance coverage, but it would also increase the nation's total health spending. Although the Act would nearly pay for the expanded coverage in the first 10 years as new provisions are put into place, over time, the sources of financing do not keep pace with the expected growth in new costs.

Key findings include:
  1. The net federal cost of the Act over the 2010 through 2019 period would be $39 billion (excluding debt service costs) and, thus the Act would be nearly fully funded as reforms phase in during the first ten years. The net federal cost of the Act over the following ten years (2020 through 2029) would be $1.01 trillion (excluding debt service costs) due to rapid growth in health care costs that will outpace the growth in incomes and revenues over the longer-term.
  2. The study estimates that under the Act (assuming full implementation and mature enrollment) almost 30 million people would gain insurance coverage in 2011, a reduction of 60 percent in the ranks of the uninsured.
    • 41 million people would obtain health insurance through newly-created health insurance exchanges, including 21 million in the public plan. Enrollment in the Medicaid program would grow by 10 million.
    • Families in which all members currently have insurance would save an average of about $176 under the Act, while families with one or more uninsured members would, on average, see an increase in family health spending of $1,410 per family.
    • Overall, employer health spending would increase by an average of $305 per worker. Employers that currently offer insurance would see an increase in health spending of $123 per worker, while employers that do not now offer coverage would see an increase in health spending by an average of about $813 per worker. (However, most economists believe that employers would eventually offset the increased costs through slower wage growth. As a result, families and individuals would ultimately bear the increases in costs, which is reflected in the bullet above..) Small businesses currently providing insurance would save up to an average of $811 per worker due to a tax credit.
    • The number of people covered in employer-sponsored plans (outside of the health insurance exchanges) would fall by 11 million, and overall enrollment in private plans would decline by about 900,000.
  3. The Act would result in a net savings to state and local governments of about $62.6 billion over the 2010 through 2019 period, primarily due to savings in safety-net programs that currently serve the uninsured. States would save about $125.7 billion over the 2020 through 2029 period.



Read the full PGPF Summary.