Dept. of Health and Human Services Report, Obamacare Will Cause Health Costs to RISE

President Obama has said it over and over, health care reform was needed reduce the cost of health care and to bring federal spending under control. Not so fast Mr President. Richard Foster, the chief actuary at the Centers for Medicare and Medicaid, a division of the Department of the Health and Human Services just released a study predicting overall spending on health care would rise by a total of $298 billion dollars over the next decade as a result of the House health care bill passed last Saturday. Additionally billions of dollars in projected savings contained in the measure will be difficult to maintain.

The legislation would expand insurance coverage to an estimated 32 million people who now lack it, according to the report, creating a demand for services that "could be difficult to meet initially and could lead to price-increases, cost-shifting and/or changes in providers' willingness to treat patients with low-reimbursement health coverage."

Beyond not lowering costs, the CMS report refutes many Democratic party claims such as    the bill will put so many new people into the system it may overwhelm the limited supply of doctors and many small businesses stop covering their employees driving people into the government plan.

The CMS report is a blow to the White House and House Democrats who have vowed that healthcare reform would curb the growth of healthcare spending. CMS's analysis is not an apples-to-apples comparison to the cost estimate conducted by the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) because CMS did not review tax provisions, which help offset the price tag of the Democrats' measure.

However, the CMS analysis clearly states that the House bill falls short in attaining a key goal of the Democrats' effort to reform the nation's healthcare system: "With the exception of the proposed reduction in Medicare... the provisions of H.R. 3962 would not have a significant impact on future healthcare cost growth rates."

The long-awaited report should serve as a "stark warning to every Republican, Democrat and Independent worried about the future of this nation," Ways and Means Committee ranking member Dave Camp (R-Mich.) said in a statement on Saturday.

Brendan Daly, communications director for Speaker Nancy Pelosi (D-Calif.), said, "The report shows that our health reform bill will extend the life of the Medicare trust fund by five years -- significantly longer than any proposal in recent years," adding, "Medicare actuaries estimate $100 billion more in savings than CBO from Medicaid and Medicare."

Minority Leader John Boehner (R-Ohio) highlighted the CMS report on Saturday in a written statement. "This report once again discredits Democrats’ assertions that their $1.3 trillion government takeover of health care will lower costs, and it confirms that this bill violates President Obama’s promise to ‘bend the cost curve.’ It’s now beyond dispute that their bill will raise costs, which is exactly what the American people don’t want."

Republicans predicted that if the CMS numbers were available last Saturday when the House voted on the Democrats' healthcare bill, the measure would not have passed.


“This report confirms what virtually every independent expert has been saying: Speaker Pelosi’s healthcare bill will increase costs, not decrease them. I hope my colleagues in the Senate heed CMS’ findings and refuse to rush ahead until any bill under consideration can be certified to actually reduce healthcare costs," Camp said.

According to the 31-page report, the House-passed bill would increase costs, cut Medicare and expand Medicaid.


“In aggregate, we estimate that for calendar years 2010 through 2019 [national health expenditures] would increase by $289 billion," the report notes.

"About three-fifths" or more than 60 percent of the uninsured would gain coverage by an expansion in Medicaid eligibility.

Medicare would be cut by "more than one-half trillion dollars ($571 billion), ... possibly jeopardizing access to care for beneficiaries," according to the report, and smaller companies would be "inclined to terminate their existing coverage."

Camp said that the nonpartisan analysis demonstrates that the Democrats' bill "does the opposite of everything they've been wanting to do" in terms of reducing overall health costs.

He added the CMS report shows that "this is not health care reform, this is entitlement expansion."