Higher Premiums, Taxes, Coming for Health Care

President Obama and congressional leaders have made big promises to the American people about the health reform bill they are on the verge of passing, but independent, non-partisan analysts say these promises simply will not be kept.

Democrats promise that passing their overhaul bill will save the average family $2,500 a year, allow everyone to keep the coverage they have now, reduce the burden of health costs for American businesses, and not add "one dime" to the deficit.

Studies show that this won't happen, and in many cases, the legislation Congress is about to pass will make problems worse. For example:

Costs for families: Individuals and families will face higher, not lower, costs for health insurance.

The non-partisan Congressional Budget Office (CBO) says that families purchasing insurance in the individual market would see an increase of $2,100 in their premiums by 2016. That's over and above the increases they already will be facing as health insurance premiums continue to rise at about twice the rate of general inflation.

A family would pay $15,200 for health insurance by 2016 if the Senate bill is enacted, and $13,100 if it doesn't. The CBO concluded that premiums in the individual market will be 10 to 13 percent higher in this market than if Congress did nothing.

The White House boasted that under the Senate bill, premiums for employees of large firms would remain mostly unchanged. But that means costs will continue to go up almost as fast as they have been, reaching $20,100 for a family and $7,300 for an individual by 2016.

And most young people don't have a clue that the federal government is about to slap them with a new mandate requiring them to purchase health insurance two or three times as expensive as they otherwise would be charged.

Keeping your coverage: While an additional 31 million people are expected to get health insurance, half of them will be added to the rolls of Medicaid, arguably the worst, most fraud-ridden health program in the country. But the coverage expansion will be little consolation to 10 million people who will lose their employer-sponsored insurance, according to CBO, and at least one-third of seniors likely to lose their comprehensive Medicare Advantage coverage.

The burden on American businesses: Companies would face an avalanche of new reporting requirements, penalties, and potential fines under the law. Health reform will add to, not lighten, the regulatory and financial burden of companies that had hoped to get some relief from their health costs.

Firms face fines if any of their workers gets taxpayer-subsidized coverage, whether or not the company provides health insurance. And with subsidies available for families earning up to $80,000 a year, the exposure is significant.

"The legislation would penalize medium-size and large employers that did not offer health insurance," the CBO reported. The government expects to collect $43 billion from them over the decade, in addition to their significant added cost of providing the expensive insurance the federal government would require.

Rather than focusing on their bottom line, companies will have to worry about whether the Feds are chasing them.

Adding to the deficit: Health spending will rise, not fall, under the bills. Only a series of accounting gimmicks — including starting benefits in 2014 but new taxes in 2010 — allowed Sen. Reid to get a CBO cost estimate that pretends to add "not one dime" to the deficit.

The chief actuary for Medicare, Richard Foster, found that the Senate bill would bend the cost-curve up, not down, and that the new taxes on drugs, devices, and health insurance plans will increase prices and health insurance costs for consumers.

Both the House and Senate bills would cut Medicare by half a trillion dollars and raise half a trillion in new taxes. The new taxes on businesses and individuals will further retard jobs creation and the recovery, and Medicare cuts will jeopardize access to care for seniors.

Foster says that the Medicare cuts mean that doctors, hospitals, and other providers "could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the Medicare program (possibly jeopardizing access to care for beneficiaries)."

America does need health reform. But as the details show, this legislation does not fulfill the promises the president and congressional leaders have made or the goals of families, businesses, seniors, and taxpayers for reform.

Published in The Eagle-Tribune, December 27, 2009.

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President Obama and congressional leaders have made big promises to the American people about the health reform bill they are on the verge of passing, but independent, non-partisan analysts say these promises simply will not be kept.

Democrats promise that passing their overhaul bill will save the average family $2,500 a year, allow everyone to keep the coverage they have now, reduce the burden of health costs for American businesses, and not add "one dime" to the deficit.

Studies show that this won't happen, and in many cases, the legislation Congress is about to pass will make problems worse. For example:

Costs for families: Individuals and families will face higher, not lower, costs for health insurance.

The non-partisan Congressional Budget Office (CBO) says that families purchasing insurance in the individual market would see an increase of $2,100 in their premiums by 2016. That's over and above the increases they already will be facing as health insurance premiums continue to rise at about twice the rate of general inflation.

A family would pay $15,200 for health insurance by 2016 if the Senate bill is enacted, and $13,100 if it doesn't. The CBO concluded that premiums in the individual market will be 10 to 13 percent higher in this market than if Congress did nothing.

The White House boasted that under the Senate bill, premiums for employees of large firms would remain mostly unchanged. But that means costs will continue to go up almost as fast as they have been, reaching $20,100 for a family and $7,300 for an individual by 2016.

And most young people don't have a clue that the federal government is about to slap them with a new mandate requiring them to purchase health insurance two or three times as expensive as they otherwise would be charged.

Keeping your coverage: While an additional 31 million people are expected to get health insurance, half of them will be added to the rolls of Medicaid, arguably the worst, most fraud-ridden health program in the country. But the coverage expansion will be little consolation to 10 million people who will lose their employer-sponsored insurance, according to CBO, and at least one-third of seniors likely to lose their comprehensive Medicare Advantage coverage.

The burden on American businesses: Companies would face an avalanche of new reporting requirements, penalties, and potential fines under the law. Health reform will add to, not lighten, the regulatory and financial burden of companies that had hoped to get some relief from their health costs.

Firms face fines if any of their workers gets taxpayer-subsidized coverage, whether or not the company provides health insurance. And with subsidies available for families earning up to $80,000 a year, the exposure is significant.

"The legislation would penalize medium-size and large employers that did not offer health insurance," the CBO reported. The government expects to collect $43 billion from them over the decade, in addition to their significant added cost of providing the expensive insurance the federal government would require.

Rather than focusing on their bottom line, companies will have to worry about whether the Feds are chasing them.

Adding to the deficit: Health spending will rise, not fall, under the bills. Only a series of accounting gimmicks — including starting benefits in 2014 but new taxes in 2010 — allowed Sen. Reid to get a CBO cost estimate that pretends to add "not one dime" to the deficit.

The chief actuary for Medicare, Richard Foster, found that the Senate bill would bend the cost-curve up, not down, and that the new taxes on drugs, devices, and health insurance plans will increase prices and health insurance costs for consumers.

Both the House and Senate bills would cut Medicare by half a trillion dollars and raise half a trillion in new taxes. The new taxes on businesses and individuals will further retard jobs creation and the recovery, and Medicare cuts will jeopardize access to care for seniors.

Foster says that the Medicare cuts mean that doctors, hospitals, and other providers "could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the Medicare program (possibly jeopardizing access to care for beneficiaries)."

America does need health reform. But as the details show, this legislation does not fulfill the promises the president and congressional leaders have made or the goals of families, businesses, seniors, and taxpayers for reform.

Published in The Eagle-Tribune, December 27, 2009.

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About the author