From John Goodman’s blog

Rick Foster is the Chief Actuary of Medicare, and his office has just released a devastating critique of the Administration’s health reform law.

Before getting to details, let me say there is nothing in the report that is surprising to independent health economists. The conclusions are consistent with everything The Lewin Group and other private estimates have been saying for months. What is surprising is that one of the most respected agencies of the U.S. government is completely undermining the Alice-in-Wonderland fables being spun by the White House, on Capitol Hill and in the mainstream media. To wit:

• You cannot take close to one trillion dollars away from one group of people and spend it on another group of people and somehow leave those footing the bill better off.
• You cannot give millions of people large increases in medical care without creating any new doctors, new nurses or other paramedical personnel.
• You cannot arbitrarily reduce what you are paying providers by billions of dollars and still expect to get the same quantity and quality of care.
• You cannot give millions of patients and thousands of doctors new incentives to waste medical resources and then expect health care spending to go down.

In other words, the Chief Actuary is simply saying reality is reality. Economics is economics. A is A.

 

Convenient summaries of the Actuary’s report have been produced by the Republican staff of the House Ways and Means Committee and by the Senate Republican Policy Committee. Although these are partisan groups, the summaries appear to be quite faithful to the source. Here are the salient findings (with page numbers in the Actuary’s report):

• Health care costs will go up, not down. National health expenditures will increase from 17 percent of GDP now to 21 percent under the new law and will be higher than without the legislation. [Page 4] Net federal spending on health care will also increase.
• Health care shortages are “plausible and even probable.” Because of the increased demand for health care, “supply constraints might initially interfere with providing the services desired by the additional 34 million insured persons.” [Page 20]
• 14 million employees will lose their employer coverage. Employees of small firms are especially at risk (despite small employer tax credit subsidies). [Page 7]
• 2 million employees who lose coverage will have to enroll in Medicaid. [Page 3]
• A Medicaid insurance card is not a guarantee of care. An estimated 18 million people will be added to Medicaid. [Page 3] However, because there is no corresponding increase in the supply of caregivers, “it is reasonable to expect that a significant portion of the increased demand for Medicaid would be difficult to meet, particularly over the first few years.” [Page 20]
• One in ten insured workers will see their health benefits taxed. By 2019, more than 10% of insured workers will “be in employer plans with benefit values in excess of the thresholds (before changes to reduce benefits) and this percentage would increase rapidly thereafter.” [Page 13]
• Higher taxes will lead to higher premiums. The new taxes on medical devices, prescription drugs, and insurance plans “would generally be passed on through to health consumers in the form of higher drug and device prices and higher insurance premiums.” [Page 17]
• There are more than one-half trillion in Medicare cuts. The new health law cuts “$575 billion” from Medicare. [Page 4]
• Medicare cuts would threaten almost one in every seven hospitals. About “15 percent of Part A providers would become unprofitable within the 10-year projection period.” [Page 10]
• Overall access to care for seniors would go down. Because of the law’s payment reductions, “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. [Page 10]
• 7.4 million people will lose access to Medicare Advantage plans. Enrollment in MA plans will be cut in half (from its projected level of 14.8 million under the current law to 7.4 million under the new law). [Page 11]
• False advertising: The new “Medicare Tax” doesn’t go to Medicare. “Despite the title of this tax, this provision is unrelated to Medicare; in particular, the revenues generated by the tax on unearned income are not allocated to the Medicare trust funds.” [Page 9]
• False advertising: Budgetary double-counting does not improve Medicare’s solvency. Medicare cuts “cannot be simultaneously used to finance other federal outlays (such as the coverage expansions) and to extend the [life of the Medicare] trust fund, despite the appearance of this result from the respective accounting conventions.” [Page 9]
• The new long-term care insurance plan (CLASS Act) is unsound. The program faces “a significant risk of failure” because the high costs will attract sicker people and lead to low participation. [Page 15]
• The promise to those with pre-existing conditions is unfunded. “By 2011 and 2012 the initial $5 billion in Federal funding for [high risk pools] would be exhausted, resulting in substantial premium increases to sustain the program.” [Page 16]
• The law does almost nothing to limit actual fraud and abuse. The fraud provisions in the law will save only about two percent of $47 billion in suspect claims.

Senator John Cornyn - TX

By W. James Antle III

Well, that didn’t take long. After Democratic supermajorities rammed through their health care bill, Republicans were full of sound and fury about how this injustice will not stand. Even John McCain was on board, telling a television interviewer, “Outside the Beltway the American people are very angry and they don’t like it and we are going to try to repeal this.”

But in the GOP, cooler heads always prevail. What these Republican heads want to cool down is the campaign to repeal the health care takeover. Reports the Associated Press: “Top Republicans are increasingly worried that GOP candidates this fall might be burned by a fire that’s roaring through the conservative base: demand for the repeal of President Barack Obama’s new health care law.”

One of the Republican leadership’s volunteer firefighters is none other than Sen. John Cornyn, the Texas Republican who chairs the committee responsible for getting GOP candidates elected to the Senate this fall. Cornyn initially unfurled the “repeal and replace” banner, only to quickly make an exception for the “non-controversial stuff,” such as the ban on preexisting conditions which is unfortunately exactly what necessitates the “controversial stuff” like the individual mandate.

Cornyn was later seen pouring cold water on the idea entirely. Asked by the AP whether he was going to advise Republican senatorial nominees to run on repeal, he said, “Candidates are going to test the winds in their own states… In some places, the health care bill is more popular than others.” Meanwhile, Sen. Bob Corker of Tennessee doesn’t need a weatherman to tell him where the wind blows: “It’s just not going to happen.”

Republican candidates seeking to join Cornyn and Corker in the club have gotten the memo. Shortly before Obamacare passed, Congressman Mark Kirk — the Republican running to fill Barack Obama’s old Senate seat in Illinois — bravely vowed to “lead the effort” to repeal the bill. Now he glumly tells a local newspaper, “Well, we lost.”

Not only is it the case that Republicans “do not have the votes,” but Kirk noted “a sliver of good things in the bill which Republicans agreed with.” Judging from the similarities between the new national health care regime and the Massachusetts bill Republican Sen. Scott Brown voted for and GOP presidential frontrunner Mitt Romney signed into law, for some Republicans it is more than a sliver.

Republicans against repeal have found an amen corner in the cooler heads among conservative commentators. One Oliver Garland even counseled that repeal was fundamentally unconservative: “True conservatives are not radicals; they respect tradition and work for stable reform to fix institutions.”

Read the rest of this article at The American Spectator.

From the Orlando Sentinal

MOUNT DORA — A doctor who considers the national health-care overhaul to be bad medicine for the country posted a sign on his office door telling patients who voted for President Barack Obama to seek care “elsewhere.”

“I’m not turning anybody away — that would be unethical,” Dr. Jack Cassell, 56, a Mount Dora urologist and a registered Republican opposed to the health plan, told the Orlando Sentinel on Thursday. “But if they read the sign and turn the other way, so be it.”

The sign reads: “If you voted for Obama … seek urologic care elsewhere. Changes to your healthcare begin right now, not in four years.”

Estella Chatman, 67, of Eustis, whose daughter snapped a photo of the typewritten sign, sent the picture to U.S. Rep. Alan Grayson, the Orlando Democrat who riled Republicans last year when he characterized the GOP’s idea of health care as, “If you get sick, America … Die quickly.”

Chatman said she heard about the sign from a friend referred to Cassell after his physician recently died. She said her friend did not want to speak to a reporter but was dismayed by Cassell’s sign.

“He’s going to find another doctor,” she said.

Cassell may be walking a thin line between his right to free speech and his professional obligation, said William Allen, professor of bioethics, law and medical professionalism at the University of Florida‘s College of Medicine.

Allen said doctors cannot refuse patients on the basis of race, gender, religion, sexual orientation or disability, but political preference is not one of the legally protected categories specified in civil-rights law. By insisting he does not quiz his patients about their politics and has not turned away patients based on their vote, the doctor is “trying to hold onto the nub of his ethical obligation,” Allen said.

“But this is pushing the limit,” he said.

Read the rest of the story.

Rep. Dave Camp, ranking Republican of the House Ways and Means Committee, has compiled this list of when different aspects of the recently passed healthcare legislation will go into effect.  Click here for a PDF version of the document.

2009

• 2-year tax credit (total cap of $1 billion) for new chronic disease therapy investments
• Medicare cuts to hospitals begin (long-term care (7/1/09) and inpatient and rehabilitation facilities (fiscal 2010)) 2009

2010

• States and federal officials review premium increases
• FDA authorized to approve “follow-on” biologics
• Increase brand name pharmaceutical Medicaid rebate (from 15.1% to 23.1%)
• Medicare payments to physicians in primarily rural areas increase (2 years)
• Deny “black liquor” eligibility for cellulosic biofuel producers credit
• Tax credits provided to certain small employers for health care-related expenses
• Increase adoption tax incentives for 2 years
• Codify economic substance doctrine and impose penalties for underpayments (transactions on/after 3/23/10)
• Provide income exclusion for specified Indian tribe health benefits provided after 3/23/10
• Temporary high-risk pool and high-cost union retiree reinsurance ($5 billion each for 3.5 years) (6/23/10)
• Impose 10% tax on indoor UV tanning (7/1/10)
• Medicare cuts to inpatient psych hospitals (7/1/10)
• Prohibits lifetime and annual benefit spending limits (plan years beginning 9/23/10)
• Prohibits non-group plans from canceling coverage (rescissions) (plan years beginning 9/23/10)
• Requires plans to cover, at no charge, most preventive care (plan years beginning 9/23/10)
• Allows dependents to stay on parents’ policies through age 26 (plan years beginning 9/23/10)
• Provides limited protections to children with pre-existing conditions (plan years beginning 9/23/10)
• Hospitals in “Frontier States” (N.D., Mont., Wyo., S.D., Utah) receive higher Medicare payments (fiscal 2011)
• Hospitals in “low-cost” areas receive higher Medicare payments for 2 years ($400 million, fiscal 2011)

2011

• Medicare Advantage cuts begin
• No longer allowed to use FSA, HSA, HRA, Archer MSA distributions for over-the counter medicines
• Medicare cuts to home health begin
• Wealthier seniors ($85k/$170k) begin paying higher Part D premiums (not indexed for inflation in Parts B/D)
• Medicare reimbursement cuts when seniors use diagnostic imaging like MRIs, CT scans, etc.
• Medicare cuts begin to ambulance services, ASCs, diagnostic labs, and durable medical equipment
• Impose new annual tax on brand name pharmaceutical companies
• Americans begin paying premiums for federal long-term care insurance (CLASS Act)
• Health plans required to spend a minimum of 80% of premiums on medical claims
• Physicians in “Frontier States” (N.D., Mont., Wyo., S.D., Utah) receive higher Medicare payments
• Prohibition on Medicare payments to new physician-owned hospitals
• Penalties for non-qualified HSA and Archer MSA distributions double (to 20%)
• Seniors prohibited from purchasing power wheelchairs unless they first rent for 13 months
• Brand name drug companies begin providing 50% discount in the Part D “donut hole”
• 10% Medicare bonus payment for primary care and general surgery (5 years)
• Employers required to report value of health benefits on W-2
• Steps towards health insurance administrative simplification (reduced paperwork, etc) begins (five year process)
• Additional funding for community health centers (five years)
• Seniors who hit Part D “donut hole “in 2010 receive $250 check (3/15/11)
• New Medicare cuts to long-term care hospitals begin (7/1/11)
• Additional Medicare cuts to hospitals and cuts to nursing homes and inpatient rehab facilities begin (fiscal 2012)
• New tax on all private health insurance policies to pay for comp. eff. research (plan years beginning fiscal 2012)

2012

• Medicare cuts to dialysis treatment begins
• Require information reporting on payments to corporations
• Medicare to reduce spending by using an HMO-like coordinated care model (Accountable Care Organizations)
• Medicare Advantage plans with a 4 or 5 star rating receive a quality bonus payment
• New Medicare cuts to inpatient psych hospitals (7/1/12)
• Hospital pay-for-quality program begins (fiscal 2013)
• Medicare cuts to hospitals with high readmission rates begin (fiscal 2013)
• Medicare cuts to hospice begin (fiscal 2013)

2013

• Impose $2,500 annual cap on FSA contributions (indexed to CPI)
• Increase Medicare wage tax by 0.9% and impose a new 3.8% tax on unearned, nonactive business income for those earning over $200,000 or $250,000 for families (not indexed to inflation)
• Generally increases (7.5% to 10%) threshold at which medical expenses, as a percentage of income, can be deductible
• Eliminate deduction for Part D retiree drug subsidy employers receive
• Impose 2.3% excise tax on medical devices
• Medicare cuts to hospitals which treat low-income seniors begin
• Post-acute pay for quality reporting begins
• CO-OP Program: Secretary of Health and Human Services awards loans and grants for establishing nonprofit health insurers
• $500,000 deduction cap on compensation paid to insurance company employees and officers
• Part D “donut hole” reduction begins, reaching a 25% reduction by 2020

2014

• Individuals without government-approved coverage are subject to a tax of the greater of $695 or 2.5% of income
• Employers who fail to offer “affordable” coverage would pay a $3,000 penalty for every employee that receives a subsidy through the Exchange
• Employers who do not offer insurance must pay a tax penalty of $2,000 for every full-time employee
• More Medicare cuts to home health begin
• States must have established Exchanges
• Employers with more than 200 employees can auto-enroll employees in health coverage, with opt-out
• All non-grandfathered and Exchange health plans required to meet federally mandated levels of coverage
• States must cover parents /childless adults up to 138% of poverty on Medicaid, receive increased FMAP
• Tax credits available for Exchange-based coverage, amount varies by income up to 400% of poverty
• Insurers cannot impose any coverage restrictions on pre-existing conditions (guaranteed issue/renewability)
• Modified community rating: individual or family coverage; geography; 3:1 ratio for age; 1.5:1 for smoking
• Insurers must offer coverage to anyone wanting a policy and every policy has to be renewed
• Limits out-of-pocket cost-sharing (tied to limits in HSAs, currently $5,950/$11,900 indexed to COLA)
• Insurance plans must include government-defined “essential benefits ” and coverage levels
• OPM must offer at least two multi-state plans in every state
• Employers can offer some employees free choice vouchers for health insurance in the Exchange
• Government board (IPAB) begins submitting proposals to cut Medicare
• Impose tax on nearly all private health insurance plans
• Medicare payment cuts for hospital-acquired infections begin (fiscal 2015)

2015

• More Medicare cuts to home health begin

2016

• States can form interstate insurance compacts if the coverage with HHS approval (2016)

2017

• Physician pay-for-quality program begins for all physicians
• States may allow large employers and multi-employer health plans to purchase coverage in the Exchange.
• States may apply to the HHS secretary for a limited waiver from certain federal requirements

2018

• Impose “Cadillac tax on “high cost” plans, 40% tax on the benefit value above a certain threshold: ($10,200 individual coverage, $27,500 family or self-only union multi-employer coverage)

From the Washington Examiner