Health Care Reform Facts and Flaws

April 23, 2010

By Padmini Arhant

The reason this topic cannot be swept under the rug, is the confirmed negative factors directly affecting the national deficit, the Senior citizens and the ‘average American’ families for whom the reform should be immediately favorable and not otherwise.

Following the blogpost titled “Health Care Legislation Amendment” April 22, 2010 supplemented with New York Times article reporting the ‘Senators fear Insurance Premium hikes’ prompting them to pass federal regulation on health rates,

There is yet another report with more alarming details.

According to Associated Press – April 23, 2010

Report: Health care costs set to climb –

President’s effort to control spending falls short, review finds

By Ricardo Alonso-Zaldivar – Thank you.

Washington – President Barack Obama’s health care overhaul law will increase the nation’s health care tab instead of bringing costs down, government economic forecasters concluded Thursday in a sobering assessment of the sweeping legislation.

A report by economic experts at the Health and Human Services Department said the health care remake will achieve Obama’s aim of expanding health insurance – adding 34 million Americans to the coverage rolls.

However, the analysis also found that the law falls short of the president’s twin goal of controlling runaway costs.

It also warned that Medicare cuts may be unrealistic and unsustainable, driving about 15 percent of hospitals into the red and “possibly jeopardizing access” to care for seniors.

The mixed verdict for Obama’s signature issue is the first comprehensive look by neutral experts.

In particular, the warnings about Medicare could become a major political liability for Democratic lawmakers in the midterm elections.

Seniors are more likely to vote than younger people and polls show they are already skeptical of the law.

The report from Medicare’s Office of the Actuary carried a disclaimer saying it does not represent the official position of the Obama administration.

White House officials have repeatedly complained that such analyses have been too pessimistic and lowball the law’s potential to achieve savings.

The report acknowledged that some of the cost-control measures in the bill – Medicare cuts, a tax on high-cost insurance and a commission to seek ongoing Medicare savings – could help reduce the rate of cost increases beyond 2020.

But it held out little hope for progress in the first decade.

“During 2010-2019, however, these effects would be outweighed by the increased costs associated with the expansion of health insurance coverage,” wrote Richard Foster, Medicare’s chief actuary.

“Also, the longer-term viability of the Medicare … reductions is doubtful.”

Foster’s office is responsible for long-range costs estimates.

Republicans said the findings validate their concerns about Obama’s 10-year, nearly $1 trillion plan to remake the nation’s health care system.

“A trillion dollars gets spent, and it’s no surprise – health care costs are going to go up,” said Rep. Dave Camp, R-Mich., a leading Republican on health care issues.

Camp added that he’s concerned the Medicare cuts will undermine coverage for seniors.

The health care law, passed by a divided Congress after a year of bitter partisan debate, would create new health insurance markets for individuals and small businesses.

Starting in 2014, most Americans would be required to carry health insurance except in cases of financial hardship.

Tax credits would help many middle-class households pay their premiums, and Medicaid would pick up more low-income people.

Insurers would be required to accept all applicants, regardless of their health.

A separate Congressional Budget Office analysis, also released Thursday, estimated that 4 million households would be hit with tax penalties under the law for failing to get insurance.

The U.S. spends $2.5 trillion a year on health care, far more per person than any other developed nation, and for results that aren’t clearly better when compared to more frugal countries.

At the outset of the health care debate last year, Obama held out the hope that by bending the cost curve down, the U.S. could cover all its citizens for about what the nation would spend absent any reforms.

The report found that the president’s law missed the mark, although not by much.

The overhaul will increase national health care spending by $311 billion from 2010-2019, or nine-tenths of 1 percent.

To put that in perspective, total health care spending during the decade is estimated to surpass $35 trillion.

Administration officials argue the increase is a bargain price for guaranteeing coverage to 95 percent of Americans.

The report’s most sober assessments concerned Medicare.

In addition to flagging the cuts to hospitals, nursing homes and other providers as potentially unsustainable, it projected that reductions in payments to private Medicare Advantage plans would trigger an exodus from the popular program.

Enrollment would plummet by about 50 percent, as the plans reduce extra benefits that they currently offer.”
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Cost/Benefit Determination – By Padmini Arhant

As stated earlier in the ‘National Health Care Legislation’ analysis and subsequent articles related to the health care reform on this website,

The contentious factors in the health care bill are:

The effects of law set in 2014 and 2019 for the 34 million Americans to obtain coverage and,

The exclusive “private for profit” health care service in the absence of a formidable challenger such as the ‘Universal Medicare’ program to provide real protection to the victims in the health care crisis,

Federal aid to middle-class and lower income families is an appropriate measure.

Again, this would not happen until 2014.

However, if it’s meant to facilitate the means for the mandatory insurance purchase from a private industry with enormous flexibility in price adjustments reinforced by the penalties against the struggling households and corporations will be a bonanza for the insurance industry.

Per the AP article, the CBO analysis estimated “4 million households would be hit with tax penalties under the law for failing to get insurance.”

The report found that “the overhaul will increase national health care spending by $311 billion from 2010 – 2019, or nine-tenths of 1 percent.

To put that in perspective, total health care spending during the decade is estimated to surpass $35 trillion.”

Most poignantly, the costs and benefits during 2010 -2019 and beyond are entirely at the private insurance and health care industry discretion with the federal funding for the coverage to the unaffordable and uninsured segments.

Insurers would be required to accept all applicants, regardless of their health.

Nevertheless, the requirement for the insurance industry has no consequences.

Unlike the 4 million households and the corporations facing penalties upon the insurance purchase default.

Then the effects on Medicare elaborated in the reports from the Medicare Office of the Actuary and the neutral economic experts at the Health and Human Services Department deserve attention.

‘It warned that the unrealistic and unsustainable Medicare cuts would drive out 15 percent of hospitals into the red and “possibly jeopardizing access” to care for seniors.

During the 2010 – 2019, the increased costs associated with the expansions of health insurance coverage are expected to outweigh the cost-control strategies in the bill – Medicare cuts …

Also, the longer-term viability of the Medicare reductions is doubtful.

Assessment flagged the Medicare cuts to hospitals, nursing homes and other providers as potentially unsustainable.

Further, it projected that reductions in payments to private Medicare Advantage plans would trigger an exodus from the popular program.

Enrollment would plummet by about 50 percent, as the plans reduce extra benefits that they currently offer.”

Clearly these drastic steps against Medicare is designed to serve the private industry forcing subscribers to choose the private plan due to the extreme reduction in benefits and care, which is adequately prevalent in the current system.

Indeed, the devil is in the details.

Despite the overwhelming health care spending for the decade 2010 -2019, estimated to surpass $35 trillion, the private industry reap the extraordinary benefits with the mandatory insurance law including the penalties against the uninsured.

In addition, the average citizens as consumers and taxpayers would be deprived of the desirable health care with the Medicare cuts to the private sector’s advantage.

Health care is a matter of life and death.

Since, the 34 million Americans will be covered in 2020 and not in 2010, the argument that,

‘The deal is a bargain for guaranteeing coverage to 95 percent Americans’ does not bode well,
especially with the population needing urgent medical treatment now and the astronomical national health care costs evaluated to surpass $35 trillion for the decade 2010 – 2019.

Predominantly due to the status quo extension with the private health care management.

There is no doubt that the health care bill on Medicare and the culminating factors are going to be a major political liability in the midterm elections.

The Republican members cannot possibly derive any credit from their abstinence in the health care legislation.

It’s a win-win situation for the industry with,

The Republican members declining support to the “Universal Medicare.”

Thus, becoming the proxy for the private sector.

Case in point – Filibuster threat against the Independent Senator from Vermont – Bernie Sanders’ courageous call for “single payer” system thwarted with undemocratic opposition.

Expressing concern over the Medicare cuts for seniors and at the same time refusing to vote for the Universal Medicare for all citizens by the Republican members confirms political expediency.

The democrats on their part anyhow ended up with the legislation delivering victory to the special interests.

With the political system controlled by the lobbyists, the citizens only hope is to take democratic action by demanding that the health care legislation be amended in people’s favor.

“Universal Medicare” is easily affordable at $35 trillion and Single Payer system efficiently addresses the health care crisis and the rising national deficit.

Any reluctance from the lawmakers to amend the bill to ‘Universal Medicare’ would reflect their priorities.

Now is the time for citizen action to save lives and democracy.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under Health 

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