CBO Score

Hate to Say We Told You So: New CMS Report Shows “Reform” Raises Costs

I hate to say we told you so. Really…we hate it. The first comprehensive report of the recently passed health care law was unveiled today. The study, done by the Center for Medicare and Medicaid Services (CMS), shows that many Republican criticisms of the health care law are likely to become reality.

We told you so. Representative Paul Ryan said

“Cost containment underpins the entire argument for reform. You’ve all been assuring us: ‘This plan will slow the growth of health care costs for our families, our businesses, and our government.’ Here again – the substance falls short of the rhetoric.”

The public agreed with Ryan. A Rasmussen poll taken directly before the health care reform vote found that 57% of voters believed that the costs of health care would go up while only 17% believe costs would go down if Democrats’ reform passed.

The CMS report showed these fears were not unfounded. The economic experts at the Health and Human Services Department found that the new reforms will do little to curb the runaway health care costs. In fact, they argue that it will bend the cost curve up, raising baseline spending by 1% over 10 years. The report states that,

“In aggregate, we estimate that for calendar years 2010 through 2019, [national health expenditures] would increase by $311 billion, or 0.9 percent, over the updates baselines projection that was released on June 29, 2009.”

CMS admits that even this figure may be more generous than the reality due to some unrealistic cuts being made to Medicare. Again, we told ya so. Senate Minority Leader Mitch McConnell repeatedly said that

“Medicare is already in trouble. The program needs to be fixed, not raided to create another new government program.”

According to the new report we were right. CMS says that cuts to Medicare could drive 15% of hospitals into the red and thus possibly lower the quality of care for Medicare beneficiaries.

“Over time, a sustained reduction in payment updates…would cause Medicare payment rates to grow more slowly than…the provides cost of furnishing services to beneficiaries. Thus, providers…could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program (possibly jeopardizing access to care for beneficiaries.”

Cutting access to Medicare would be political suicide. The government will be unwilling to accept this reality and will be forced to act to restore Medicare payment rates. But by doing so the Democrats’ claim that the reforms actually reduce the deficit would fall by the wayside.

The question everyone should be asking is why we are only hearing about this now. Before the bill was passed Democrats knew that the CMS was going to release a report analyzing the costs of the bill. At the time the CMS lamented that under the “very tight time frame” and due to the “complexity” of the reform legislation they would not be able to analyze the costs before the House voted on the legislation.

Instead, Democrats touted the score by the nonpartisan Congressional Budget Office as showing everything they needed to know before a vote was taken. Unfortunately for democracy, the CBO score was gamed. Unlike the CMS report the CBO is not a neutral calculator of costs. The CBO was forced to use unrealistic assumptions in determining the cost of the legislation, a constraint not shared by the CMS. It is little wonder then that today’s report provides a much less flattering picture; one that actually increases health care costs and decreases the quality of care.

We told you so. But we take no satisfaction in saying it. The sad reality is that this bill was sold to America based on faulty numbers. It was forced upon taxpayers without a full understanding of what it would truly cost. Democrats could have delayed the vote. With trillions of dollars in taxpayer money at stake they should have delayed the vote. Whether they didn’t do so because they wanted the debate to be over, or worse, because they expected the CMS report would show their savings claims were false, the victim is the American people. Regardless of whether Democrats’ motivations were naïve or insidious they must pay the price in November. We may be stuck with an overpriced health care reform package, but we aren’t stuck with Democratic majorities.

by Brandon Greife, Political Director of the College Republican National Commitee

Read more: www.collegerepublicans.org

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