Study finds what many feared; needed savings will be elusive
Updated: April 26, 2010, 11:16 pm /
Published: April 27, 2010, 6:42 am
As more information emerges on the recent health care reform legislation, it is not surprising that analysts now believe it will cost more than people were told.
In the first report since the bill was passed, economic experts at the Department of Health and Human Services say the bill, passed only last month, will increase the costs of health care by $511 billion over the next 10 years, instead of bringing them down. That comes from the Obama administration, although the analysts involved are considered neutral, and while it represents only a 1 percent increase it's still a sobering conclusion … because it's a best-case scenario, and it's dependent on a half-trillion dollars in cuts to the Medicare program, largely through Medicare Advantage.
These cuts, projected to save $520 billion over time, would be a real blow to the elderly. Hospitals, nursing homes, hospice and home health care also would be among the hardest hit. Many observers believe Congress will ultimately flinch, thus driving the costs of care even higher. For example, if the cuts are enacted, the report projects that they would push about 15 percent of hospitals and other institutional providers into the red.
Congress never has been willing to make such cuts targeting seniors, and it's doubtful it will do that now. Without the cuts, and with the estimated increase in costs, losses would hit the trillion-dollar range.
This page has endorsed health care reform as necessary to the nation's well-being. With some 50 million Americans uninsured and costs driving toward 20 percent of gross domestic product, the nation desperately needed to address the problems of health care.
But, first and foremost, reform needed to target the costs of health care because, absent that achievement, all other reforms will be threatened. That includes one of the goals that Obama did achieve, providing coverage to 34 million Americans who now lack insurance … a gain that comes at a cost of $800 million, and without any guarantees there will be enough doctors, nurses and other resources to meet increased health care demands.
Buried in the act were a new long-term care insurance program whose premiums wrongly were double-counted as deficit reducing, and … despite the elimination of some special benefits … millions of dollars to interests in the districts of key senators and representatives. Major insurance companies already are planning premium increases based on expected health care cost increases under this plan. It's no wonder the public did not believe claims of cost-cutting.
The White House, for its part, has complained about such analyses, contending that they take too little notice of the law's potential to generate savings. The report does acknowledge that some cost-control measures, including Medicare cuts and a tax on high-cost insurance, could create savings after 10 years, but it saw little likelihood of savings in the coming decade even though many of the costliest changes don't start until 2014.
Without cost controls, reform can't achieve the necessary and crucial long-term goals of providing affordable, high-quality health care to all Americans. Congress and the administration need to monitor the implementation of this law, misnamed the Affordable Health Care Act, and make changes as they are called for. It's unlikely that will be done by President Obama, who wanted this reform, apparently, at all costs. And changes will prove difficult in the Congress as well, given Democrats' loyalty to the legislation and Republicans' refusal to participate in any meaningful way to its development.
But failure to curb those costs and pay for the expansion of care makes it even more likely that this year's legislation will lead to very serious consequences for everyone.
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