ICYMI: Politico -- Health savings? No one knows
Posted by The Campaign on November 11, 2009 at 5:53 PM
Politico has a must read about the impact of reform proposals on health care costs in general and premiums in specific. Here are some of the key excerpts:
"It's one of the most basic, kitchen-table questions of the entire reform debate: Would the sweeping $900 billion overhaul actually lower spiraling insurance premiums for everyone? No one really knows."
"Aides expect to see the report ahead the Senate floor debate on health care, which is causing anxiety among Democrats because of the uncertainty of what the famously cost-conservative CBO will produce. The possibility that congressional scorekeepers will conclude that premiums won't flatten out or decrease would make centrists even more leery of reform, forcing adjustments to the bill just as Senate Majority Leader Harry Reid (D-Nev.) is already scrambling to meet a Christmas deadline."
"David Cutler, a Harvard University economist who helped develop the estimate for the Obama campaign, said the savings are still achievable, but perhaps not for a decade. It depends almost entirely on whether Congress is strict about reducing the growth rate of health care spending in Medicare and Medicaid – and the private sector follows the government’s lead in wringing inefficiencies and waste out of the system. 'Far and away, what happens to premiums is dependent on whether you can bend the cost curve,' Cutler said. And there are questions as to whether the bills even meet that goal. Gruber, the favorite economist of the White House, said the bill 'really doesn’t bend the cost curve.'"
"Critics of the Democratic approach say other elements of the bill would do more to jack up premiums. It would take years to implement the cost savings, but billions in new taxes would be levied immediately on insurers, device manufacturers, and drug makers, which the CBO and the Joint Committee on Taxation has said would be passed onto consumers. In the absence of an enforceable mandate on individuals to purchase coverage, various market reforms would also cause a spike in costs, Holtz-Eakin said."
"The issue has steadily crept to the forefront of the debate since the insurance industry released three reports over the last month warning about higher premiums. Democrats largely dismissed the analyses because of the source. But Republicans have seized upon the issue, making it central to their argument against the Democratic bills."
Full story here.
