The Obama administration analyzed Obama's health care takeover and found it will raise, not lower, costs.
The Actuarial section of Centers for Medicare & Medicaid Services did the analysis of H.R. 3200. The whole report is here (pdf). Read Joseph Ragu's column on it:
America in the World: Bending the Curve -- Up!:
Supposedly the whole point of ObamaCare was to 'bend the curve' and reduce the growth rate of health-care spending. Everyone now knows it will do the opposite -- as at least one corner of the Obama Administration is willing to admit.
"This week, the Office of the Actuary at the Centers for Medicare & Medicaid Services, or CMS, released a cost estimate for the House health bill. Its projections mostly track those issued by the Congressional Budget Office, but CMS does ask some questions that CBO so far hasn't pursued. The results aren't pretty.
"CMS estimates the House bill would add 2.1 percentage points to the (already high) annual growth rate of national health spending. In 2019, when the second decade of ObamaCare would kick in, the bill would add 2.7 points to the growth rate.
"CMS also observes that the 'game changers' President Obama and especially budget chief Peter Orszag used to promote, like comparative effectiveness research and more wellness programs, are actually nonchangers. They'll save a pitiful $2.1 billion over a decade -- about 0.002% of the $1.042 trillion in new spending authorized by the House bill.
"Even the good news isn't so good. CMS says spending growth would be even higher except that so many more people will receive their care from government, allowing Washington to economize through 'sizable discounts imposed on providers,' which is one way of putting it. (Another way of putting it: Expect long lines and shabbier treatment as fewer doctors are willing to treat government-insured patients.)
"In fact, CMS estimates that seven years after the bill's provisions take effect, government's share of total health-care spending will have risen to 55% from today's 47%. Single payer, here we come.
Posted by Ron Hebron at October 29, 2009 06:52 AM | Email ThisThe real reason is to force working people to fund healthcare for urban indolents and illegal aliens.
Posted by: Saltherring on October 29, 2009 10:23 AMSay I sold a hundred iPods for $50 in 2009 -- total national expenditure is $5,000. Now say I sold a thousand iPods for $25 in 2009 -- total national expenditure is $25,000. Did iPod costs increase or decrease? You're arguing they've increased, even though iPods cost half the amount.
Total health care expenditures are not individual costs, especially when the plan expands coverage by 30 million Americans
Ron quoted: CMS estimates the House bill would add 2.1 percentage points to the (already high) annual growth rate of national health spending. (first, note that it's national spending and not costs per capita.)
This is wrong. The report said: Total national health expenditures in the U.S. during 2010-2019 would increase by about 2.1 percent.
With 30 million more people insured, of course the total expenditures on health care will increase. But this is not the growth rate, which compounds annually -- it was about a 2.1% increase over a decade. That quote was wrong.
Ron quoted: In 2019, when the second decade of ObamaCare would kick in, the bill would add 2.7 points to the growth rate.
The report says: Total national health expenditures under this bill would increase by an estimated 2.7 percent in calendar year 2019, reflecting the net impact of (i) greater utilization of health care services by individuals becoming newly covered (or having more complete coverage), (...)
Again, it is not true to say that this is a commentary on the growth rate. It isn't. Also note that I was correct: the added national expenditure comes from more people actually getting care.
You should note that "national expenditure" does not mean government money, it also includes the money people pay for copays and other health care tools.
It would be completely consistent with these numbers to have individual costs decrease while total spending increases. All it means is that more people are getting health care coverage, and we're all paying less for it. I'm not saying HR 3200 -- a completely dead bill -- does that. I'm saying the article you're quoting is misreading the report, and you're misreading the article.
Posted by: John Jensen on October 29, 2009 02:09 PMYou may want to re-read what Ron posted, especially this quote from the report:
"CMS estimates the House bill would add 2.1 percentage points to the (already high) annual growth rate of national health spending. In 2019, when the second decade of ObamaCare would kick in, the bill would add 2.7 points to the growth rate.
It appears the inflation rate of health care INCREASES with the House bill. The rate of inflation of health care is HIGHER if HR3200 becomes law, than if we leave health care alone.
Obamacare will increase the spending - in absolute dollars and in terms of share of GDP - in health care, the exact opposite of how it's being pitched.
Posted by: Shanghai Dan on October 29, 2009 02:57 PMThose are not rates of health care inflation. Inflation regards the growth costs per capita. The report does not speak of anything per capita. It would be like confusing GDP growth with inflation.
Look, let me make this clear. If a million more people go to McDonald's next year and they drop the price of fries by a nickle, two things happened: The total spending on fries went up and the cost of fries went down. You -- like Ron, and this article -- are saying that because total spending on fries went up, then of course each order of fries got more expensive. But that's not true. For that reason, you're all misinterpreting the report.
PS: HR3200 is literally dead. The health care bill being considered by the House is HR3962.
Posted by: John Jensen on October 29, 2009 04:59 PMYou're wrong. Please see page 10 of the PDF (the section titled National Health Expenditure Impacts):
The estimated effects of H.R. 3200 on overall national health expenditures (NHE) are shown in table 5. In aggregate, we estimate that for calendar years 2010 through 2019 NHE would increase by $750 billion, or 2.1 percent, over the updated baseline projection that was released on June 29, 2009. As a result, the NHE share of GDP is projected to be 21.3 percent in 2019, compared to 20.8 percent under current law.
Emphasis added. That is 2.1% BEYOND the baseline that would happen with current law. Meaning HR3200 will INCREASE the rate of National Healthcare Expenses (health care spending) beyond what the current situation does.
Posted by: Shanghai Dan on October 29, 2009 06:01 PM"If a million more people go to McDonald's next year and they drop the price of fries by a nickle, two things happened: The total spending on fries went up and the cost of fries went down. You -- like Ron, and this article -- are saying that because total spending on fries went up, then of course each order of fries got more expensive. But that's not true. For that reason, you're all misinterpreting the report."
I understand what the report is saying. If more people use health care, more health care money is spent. You and Ron are claiming that means our costs will go up. That isn't an appropriate conclusion.
Posted by: John Jensen on October 29, 2009 06:08 PMI think that you have not responded to Dan's point. What he pointed out is that current law leaves us with a lower NHE share of GDP than we will have under the present law.
When did Dan say anything about inflation increasing. What I believe he said was that spending will increase?
He was very clear about what he was saying when he said that "Obamacare will increase the spending - in absolute dollars and in terms of share of GDP - in health care, the exact opposite of how it's being pitched."
I don't think that anything that you said shows that Dan was wrong about this claim.
Why should we not be concerned about the fact that the government will be spending more under the new law than it would be spending under the present law? The government spends our money; why should we not be concerned about the fact that it will be spending more of our money under the new law than under the present law?
I don't believe that your analogy of french fries at McDonald's addresses Dan's concern. Perhaps, I should not try to speak for Dan. Sure, I'm happy if my neighbor can get french fries at a cheaper price; so long as someone isn't spending more of my money so that he can do that.
Posted by: John D. McCarthy on November 1, 2009 11:45 AM
You got it completely correct; Centrifuge John Jensen (for he spins at amazing rates) simply cannot accept the facts since they run counter to his own belief.
He was also EXTREMELY ADAMANT earlier this summer about not supporting any health care bill that left a significant number (30% or more) of the uninsured in just such a state, and that added to the deficit. Now that we know - for a FACT - that the new HR bill will do both (leave 50% of the uninsured still uninsured, and add hundreds of billions to the deficit), he changes his story.
John's the ultimate marxist/fascist. He will spend all the dollars you have so he can assuage his own feelings of inadequacy or guilt. You have no rights if they interfere with his own warped sense of self-interest.
And if my neighbor gets french fries for cheaper, good for him! I want to find out how he did it and do the same...
Posted by: Shanghai Dan on November 3, 2009 04:32 AM