Chief Medicare Actuary At HHS Reports Senate Obamacare Will Make Health Costs 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 $222 billion dollars over the next decade as a result of the House health care bill passed at the end of December. Foster also says the senate plan will drive health provider out of medicare making it harder for plan participants to find a doctor (his full report is embedded at the bottom of this post).

The CMS report estimated that national health expenditures would increase by $222 billion or 0.6 percent from 2010 to 2019.


The Senate plan purports to achieve $483 billion in Medicare savings over the next 10 years, including $118 billion in cuts to Medicare Advantage plans, a program favored by Republicans that distributes Medicare benefits through private providers.

The Senate's funky math was only about $700 billion off.

Richard Foster, the chief actuary at CMS, raised doubts about whether a significant number of healthcare providers could remain profitable if the proposed Medicare cuts went into effect.


“Providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program (possibly jeopardizing access to care for beneficiaries),” Foster wrote.


Congress would feel strong pressure from elderly constituents to boost payments if healthcare providers began to drop Medicare beneficiaries.


The report supports GOP criticisms that the Democratic health overhaul proposal is flawed because it would cut hundreds of billions from Medicare at a time when its long-term solvency is in question.


“Republicans uniformly, without exception, believe that cutting a half a trillion dollars out of Medicare, raising a half-trillion in new taxes, and an actual increase in health insurance premiums for everybody else is not reform,” Senate Republican Leader Mitch McConnell said in a statement.


Democrats argue that while national healthcare spending my tick up slightly, the Democratic plan will cut the federal deficit and make health insurance more affordable to individuals.


The Congressional Budget Office estimated the Senate plan would reduce the federal deficit by $132 billion over 10 years and the House plan would cut the budget by $139 billion over the same span.


In a radio address Saturday, President Barack Obama touted the money that families and small businesses would save.


“We’re fixing our broken health insurance system that’s crushing families, eating away at workers’ take-home pay, and nailing small businesses with double-digit premium increases,” Obama said.

It seems that once again the President it wrong.

The CMS actuary also found that healthcare providers could curb their availability or increase fees to respond to a flood of new consumers the healthcare reform bill is expected to send into the market. The Senate and House bills would expand health coverage to more than 30 million uninsured citizens, creating a potential glut.


“The additional demand for health services could be difficult to meet initially with existing health provider resources and could lead to price increases, cost-shifting, and/or changes in providers’ willingness to treat patients with low-reimbursement health coverage,” the report finds.


CMS did, however, give the Senate Democrats some ammunition for talks with the House over a final bill.


The repot found a proposed “excise tax on high-cost employer-sponsored health insurance would have a downward impact on future healthcare cost growth rates.”


An excise tax on high-cost plans, which would raise about $150 billion between 2013 and 2019, remains a major dispute between the Senate and House.


The Senate includes the excise tax while the House bill does not, relying instead on a 5.4 percent surtax on high-income earners.


The CMS report, however, found the downward cost impact may take years to manifest.“During 2010-2019 … these effects would be outweighted by the increased costs associated with the expansions of health insurance coverage,” Foster wrote.

 On the bright side for the Senate their plan fared better than the house version. Whe  Foster, released his report on Pelosi's monstrosity, it showed 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 . Additionally billions of dollars in projected savings contained in the measure will be difficult to maintain.

Either way the reports of savings from Obamacare don't seem to hold water.