AHIP Perspective: AHIP Statement on CBO Report
Posted by The Campaign on November 30, 2009 at 12:22 PM
AHIP's Robert Zirkelbach issued the following statement on today's CBO report:
“This is the latest report to confirm that the current health care reform proposal fails to bend the health care cost curve and will result in double-digit premium increases for millions of Americans.”
Highlights from the CBO report:
· Failure to bend the cost curve: The CBO analysis confirms that the current health care reform proposal does not bend the cost curve – a key goal of health care reform.
· Double-digit premium increases for millions of Americans: CBO projects that premiums will increase for many people higher than they would under current law. The CBO and JCT analysis estimates “that the average premium per person covered (including dependents) for new nongroup policies would be about 10 percent to 13 percent higher in 2016 than the average premium for nongroup coverage in that same year under current law”.
· One in five workers could lose their current coverage: According to CBO, “an estimated 19 percent of workers with employment-based coverage would be affected by the excise tax” in 2016. Further, the analysis states that “those who kept their high-premium policies would pay a higher premium than under current law”, but “most people would avoid the cost of the excise tax by enrolling in plans that had lower premiums; those reductions would result from choosing plans that either pay a smaller share of covered health care costs (which would reduce premiums directly as well as indirectly by leading to less use of covered medical services), manage benefits more tightly, or cover fewer services”.
Other Factors to Consider:
· Subsidies do not lower premiums: Subsidies are essential to helping low- and moderate-income families afford health care coverage. But in the same way that Pell Grants do not lower the cost of college tuition, subsidies do not reduce underlying medical costs.
· Incentive for people to delay purchasing coverage: Most experts agree that the current proposal provides a powerful incentive for people to wait until they are sick to purchase coverage. This unfairly penalizes current policyholders who will be forced to cover the cost of providing care to those who wait to purchase coverage.
· Ignores regional variation in premiums: The CBO analysis estimates the nationwide average premium rather than examining the impact in each state across the country. Some states previously enacted guarantee issue and community rating reforms which led to significant premium increases in the individual market in those states. The current proposals would cause average premiums to decrease in those states while dramatically increasing premiums for people in states that currently allow medical underwriting.
· Ignores cost-shifting to families and employers with private coverage: Experience has shown that when doctors and hospitals receive less money from Medicare and Medicaid, they charge more to families and employers with private coverage to cover those costs. According to a Milliman, Inc., the average family of four is currently paying $1,500 in higher premiums as a result of this cost-shift. New Medicare cuts and a new government-run plan would exacerbate cost-shifting to families and employers.
· Many policies would not be protected under “grandfather” clause: The provision that supposedly “grandfathers” people into their current plans offers limited protection against higher costs because one-third of Americans change their coverage each year. Anyone who changes jobs, gets married or divorced, has a child or moves to another state would not be protected by the grandfather clause.
ICYMI: Jim Roche -- Congress Not Placing Enough Emphasis on Controlling Costs
Posted by The Campaign on November 30, 2009 at 11:47 AM
Jim Roche, President and CEO of the Business and Industry Association, foresees increased costs brought on by current legislative proposals.
Here are a few key excerpts:
"It’s remarkable, therefore, that health care reform under consideration by our congressional delegation in our nation’s capital seems very likely to add to health care costs, not reduce them. What happened to 'bending the cost curve' and eventually lowering it?"
"Pick your source – the Congressional Budge Office, the Lewin Group, the Centers for Medicare & Medicaid Services and others – and they conclude that health care reform legislation under consideration by both chambers of Congress will, incredibly, increase costs, not lower them."
"More underfunding from the federal government means more cost-shifting to the business community in the form of higher health insurance premiums. How is this reform?"
For the full article, click here. "Until the great health care reform debate shifts emphasis away from its current focus on expanding government health care programs or creating new ones, and toward reforming payment incentives, there will be no bending of the cost curve...And that curve will continue to rise and employers will find it increasingly difficult to provide a critical benefit for their employees and compete in the global economy."
ICYMI: Experts Say Health Care Bill Do Nothing to Lower Costs
Posted by The Campaign on November 30, 2009 at 11:22 AM
David Lightman of McClatchy Newspapers cites several experts on the health care bills' lack of cost control.
Here are some key excerpts:
"'The problem is that historically, Congress has not been able to keep its word on constraining costs,' said Amitabh Chandra, a professor of public policy at Harvard University's John F. Kennedy School of Government."
"'As long as the payment process is tied up with the political process, it's highly unlikely we'll see the kinds of savings you expect to see,' Chandra said."
“Nothing is guaranteed, the CBO warned. ‘These longer-term calculations assume that the provisions are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation.’”
"'Considering the dismal state of our budget, we need to do better,' added Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, another bipartisan watchdog group devoted to fiscal discipline."
For the full article, click here.
ICYMI: Former Oregon Governor on Costs and Health Care Reform
Posted by The Campaign on November 30, 2009 at 11:03 AM
"'I don't believe that what's going to come out of Congress is going to have any impact on the medical cost inflation, which is what's really crushing individuals and businesses, and really putting the country at economic risk,' he says."
For the full article, click here.
ICYMI: San Francisco Chronicle -- Current Legislation Fails to Control Health Care Spending
Posted by The Campaign on November 30, 2009 at 8:27 AM
The San Francisco Chronicle examines the lack of cost control measures in the current reform proposals.
Here are a few key excerpts:
"But many experts, including some who signed the letter, said Orszag is only partly right…Nearly everyone agrees that the bill's cost controls have been weakened and may grow weaker. And all agree that the House bill would do even less."
"The cost question is vital. Lack of affordability is why 47 million people don't have health insurance and why millions more risk losing it. Rising costs are devouring wages and bankrupting individuals, businesses and government at all levels. They are a main driver of scary U.S. budget deficits. Failure to slow health spending would aggravate the nation's economic problems; success could begin to address them."
For the full article, click here."'One of the worst consequences would be if the U.S. government promises 300 million people health care reform and health coverage for everyone - and then can't pay for it,' said Ralph Neas, head of the National Coalition on Health Care, a group of business, labor and other groups. 'There is going to be a considerable public backlash.'""Worse would be the economic effects. 'It's not just the health care system at stake,' Neas said. 'It's our economic system writ large. We cannot have a situation where costs continue to grow at this rate.'""If new legislation requires people to buy insurance they cannot afford, it will fail. If it promises coverage without controlling costs, the coverage cannot be sustained."
ICYMI: Economist Argues Legislation Will Not Slow Premium Growth
Posted by The Campaign on November 30, 2009 at 8:08 AM
“…there isn’t agreement that such measures go far enough to slow spending…That’s ‘not being addressed much in any of the legislative proposals,’ says Christine Eibner, an economist with RAND, a think tank. Because of that, ‘I don’t think there’s any reason to think (premium growth) will moderate.’”
For the full article, click here.
Poll Vault: USA Today -- Opposition to Health Care Legislation Lingers
Posted by The Campaign on November 24, 2009 at 1:10 PM
"WASHINGTON — As the debate over a health care bill enters a critical stage, a new USA TODAY/Gallup Poll finds Americans inclined to oppose congressional passage of the legislation this year.""The survey, taken Friday through Sunday, finds 42% against a bill, 35% in support of it. Despite nearly a year of presidential speeches, congressional hearings and TV ad campaigns by interest groups, more than one in five still doesn't have a strong opinion."
"When pressed about how they were leaning, 49% overall said they would urge their member of Congress to vote against a bill; 44% would urge a vote for it."
For the link, click here.
ICYMI: David Brooks – Reform Bills Would Raise Costs
Posted by The Campaign on November 24, 2009 at 10:35 AM
David Brooks of the New York Times reports on the trade-offs inherent in the health bill, emphasizing that House and Senate bills do not bend the cost curve.
Here are a few key excerpts:
“…there would be trade-offs. Instead of reducing costs, the bills in Congress would probably raise them. They would mean that more of the nation’s wealth would be siphoned off from productive uses and shifted into a still wasteful health care system.”
“…the general view among independent health care economists is that these changes will not fundamentally bend the cost curve. The system after reform will look as it does today, only bigger and more expensive.”
For the full article, click here.
ICYMI: Sen. Susan Collins Opposes Senate Bill Because It Does Not Do Enough to Curb Costs
Posted by The Campaign on November 23, 2009 at 1:03 PM
In a New York Times article, Sen. Collins states her chief objection to the Senate bill - lack of cost-containment.
"The main substantive objection Ms. Collins raised was that the bill focused on extending coverage to Americans without insurance while failing to do enough to curb the costs of insurance coverage and the delivery of care...'The high cost of health care is what is driving up the cost of insurance premiums, causing many middle-income families and small businesses to struggle to meet these needs,' she said."
For the full article, click here.
ICYMI: The Washington Post’s David Broder Says Senate and House Bills are “Budget Busters”
Posted by The Campaign on November 23, 2009 at 11:58 AM
The Washington Post’s long time columnist David Broder examines the statements of independent budget experts and public opinion surveys, and he argues the Senate and House bills come up short when it comes to controlling costs. Here are a few key excerpts:
“[Quinnipiac University poll] read: President Obama has pledged that health insurance reform will not add to our federal budget deficit over the next decade. Do you think that President Obama will be able to keep his promise or do you think that any health care plan that Congress passes and President Obama signs will add to the federal budget deficit?...The answer: Less than one-fifth of the voters -- 19 percent of the sample -- think he will keep his word.”
“While the CBO said that both the House-passed bill and the one Reid has drafted meet Obama's test by being budget-neutral, every expert I have talked to says that the public has it right. These bills, as they stand, are budget-busters.”
“…Robert Bixby, the executive director of the Concord Coalition, a bipartisan group of budget watchdogs, told me: ‘The Senate bill is better than the House version, but there's not much reform in this bill. As of now, it's basically a big entitlement expansion, plus tax increases.’"
“Maya MacGuineas, the president of the bipartisan Committee for a Responsible Federal Budget: ‘While this bill does a better job than the House version at reducing the deficit and controlling costs, it still doesn't do enough. Given the political system's aversion to tax increases and spending cuts, I worry about what the final bill will look like.’"
“Even with that change, there is plenty in the CBO report to suggest that the promised budget savings may not materialize. If you read deep enough, you will find that under the Senate bill, "federal outlays for health care would increase during the 2010-2019 period" -- not decline.”
For the full article, click here.
