CMS Analysis Says Senate Health Care Reform Bill Won’t Cut Costs
The Senate health care reform bill (HR 3590) would not achieve President Obama's goal of reducing national health care costs but would expand coverage to 33 million U.S. residents who are currently uninsured, according to a CMS study released on Friday, CongressDaily reports (Edney, CongressDaily, 12/11).
Health Care Spending, Coverage Projections
Under the bill, total health spending in the U.S. would reach $35.5 trillion over 10 years, 0.7% more than projected under current law (Pear/Herszenhorn, New York Times, 12/11). The CMS report also projected that total health expenditures would increase by $234 billion between 2010 and 2019 under the bill (Norman, CQ HealthBeat, 12/11).
The boost in spending would result primarily because of the increased use of health services by the newly insured, according to the report, released by CMS Actuary Rick Foster (CongressDaily, 12/11).
According to the report, the bill would ensure that 93% of citizens and legal residents have health insurance coverage, the Wall Street Journal reports (Yoest, Wall Street Journal, 12/11).
However, the report found that 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 also had bad news for consumers, noting that additional taxes levied on the pharmaceutical, medical device and insurance industries likely would be passed on in the form of higher product prices at a cost of $11 billion annually (CongressDaily, 12/11).
Implications for Medicare
The report said that proposed Medicare cuts in the bill would threaten the profitability of 20% of U.S. hospitals and nursing homes.
In addition, plans to reduce Medicare payments to hospitals and other providers might cause them to drop out of the program, "possibly jeopardizing access to care for beneficiaries," the Washington Post reports.
However, White House spokesperson Reid Cherlin said. "Congress has implemented even larger savings in Medicare in the past, and no access problems materialized."
Democrats added that doctors and hospitals rarely end their participation in Medicare (Montgomery, Washington Post, 12/12).
The report also questioned the viability of the proposed long-term care plan included in the legislation, known as the CLASS Act. It said that the program could "face a significant risk of failure" because it would attract people who are already in poor health, generating increasingly high premiums and resulting in an "insurance death spiral," the AP/Boston Globe reports (Alonso-Zaldivar, AP/Boston Globe, 12/11).
Although the program would provide savings of $38 billion through 2019, largely because the program would not pay any benefits over the first five years, CQ HealthBeat reports. After that, "there is a very serious risk the program would become unsustainable," according to the report (CQ HealthBeat, 12/11).
Republicans used the report as further ammunition to continue their criticism of the Senate bill. "How many more devastating studies do we need before the Democratic leadership will agree we need to scrap these failed bills and start over?" Sen. Mike Enzi (R-Wyo.) asked.
Democrats touted Congressional Budget Office findings that indicate the bill would reduce the deficit and keep premiums stagnant for those who already have insurance (Miller, Washington Times, 12/12).Sen. Max Baucus (D-Mont.) also noted that there is "a lot of great news" in the report, including evidence that the Democrats' bill would extend the solvency of a key Medicare trust fund until 2026 and reduce premiums under the program (CQ HealthBeat, 12/11). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.