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  • Health Reform Comes at “Very Explosive” Budgetary Time

    As Congress grapples with how to feasibly pay for a serious overhaul of the nation’s health care sector, which makes up nearly 17 percent of the U.S. gross domestic product, health economist James Capretta urged the American public to keep an eye on the country’s annual growth rate of retirement.

    “Baby boom retirement is going to have a huge impact on health care costs over the long run,” Capretta said today at a Heritage Foundation-sponsored reporter roundtable. “It’s already a very explosive budgetary situation that we’re in. That’s the context in which health reform is being discussed,” said Capretta, a fellow with the Ethics and Public Policy Center.

    Already, the federal government runs two health entitlement programs (Medicare for the elderly and disabled and Medicaid for the poor) that have been growing faster than GDP virtually every year since their inception in 1965, Capretta said. “We’re now about to create another entitlement that is absent of any forward-thinking budget decisions that are hard and controversial,” he noted.

    Last week’s $1 trillion price tag for Sen. Edward Kennedy’s health care legislation “rocked” Congress, with the Senate Finance Committee scrambling to redraft its legislation to offer a budget-neutral reform plan. Some health care experts question if reform efforts will now “crash and burn” after the sticker shock of the Congressional Budget Office’s estimated cost for Kennedy’s bill — especially since this estimate didn’t include any projected costs for a public health insurance plan.

    But Len Nichols, director of New America Foundation’s health policy program, said the price tag is just about right to give health coverage access to the roughly 46 million uninsured Americans. “It’s a 10-year number that when you divide out with the GDP is about .8 percent of it,” he said at the reporter roundtable. While advocating that Congress can’t “write a blank check on health reform,” Nichols argued the cost of doing nothing would be greater down the road.

    In an effort to put more cost savings on the table, Capretta noted that President Barack Obama has proposed cutting Medicare and Medicaid reimbursement rates for doctors, hospitals and other health care providers by an additional $313 billion over 10 years. Those cuts come on top of $309 billion President Obama called for in his 2010 budget to Congress, creating a total $622 billion reduction in Medicare and Medicaid reimbursements over the next decade.

    The proposed reductions signal how the government would finance a public health insurance plan offered to Americans younger than 65, Capretta said. “These across-the-board cuts would mean every licensed provider would be paid the same.” Squeezing out these kinds of savings from Medicare alone could jeopardize senior citizens’ access to doctors and prescription drug choice.

    Whatever solution Congress does decide upon to pay for health care reform, it will need broad bipartisan support, Nichols said. “If one side demands a certain budget on health care spending that’s not bipartisan, the other side will scream bloody murder.” Without bipartisanship, “health care reform is totally vulnerable.”

    Posted in Obamacare [slideshow_deploy]

    3 Responses to Health Reform Comes at “Very Explosive” Budgetary Time

    1. Ozzy6900, CT says:

      What makes ms laugh is that the "baby boomers" are the first generation that paid their ENTIRE working lives into Social Security and Medicare! The previous generations that are enjoying the benefits of our sweat only partially paid into the system, yet they are the biggest complainers if the system doesn't work.

      Now that WE are about to enter that "golden era": "there is not enough money", "the system needs to be overhauled", "there are too many of retirement age", "elderly health care is becoming a major issue" and other problems that those in charge have been warned about for years, NOW comes to plague us just when it's OUR turn to sit back and relax!

      Yeah, we paid all of our lives and what are we going to get for it? NOTHING!

    2. Steve, Ohio says:

      Ozzy,

      You are going to be one fo a long list of people who will fall victim to the "great lie". With Medicare/Medicaid and Social Security literally going bankrupt, why should we believe that they can do ALL healthcare better?

      When is the last time liberals did anything efficiently and cost effectively?

      That is right, NEVER. Government is the problem. They continue to "break the back" of healthcare with mandates for coverage. If we were all allowed to buy insurance (not prepaid medical) the costs would drop significantly and thus sustainability would be secured. The governement needs to get out and let the market take care of the problem. More handouts to the uselessly unproductive will not fix anything, only make things worse leading, without doubt, to rationing of care and higher taxes. Good Luck!

    3. Judy, Arizona says:

      Plenty of money for Goldman Sachs and AIG and a $3trillion war for the oil barons but nothing for the elderly after it is too late for them to go back to work. It figures… Dems and Repubs are really not very different. Neither can be trusted with money. They've both been raiding Social Security and Medicare monies for decades to benefit themselves. The programs had plenty of funding if they had been run honestly.

      And now they are forcing us to buy worthless medical insurance instead?

      No incumbents should expect to get re-elected.

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