• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Don’t Be Fooled - House Health Care Bill Would Raise Long-Term Deficits

    Contrary to several reports, the House Democratic health care bill (H.R. 3200) is not deficit-neutral, but would raise deficits to alarming new levels over the long term. It would do this by relying on several old warhorse budget gimmicks. According to the Congressional Budget Office (CBO), H.R. 3200 would increase the budget deficit by $239 billion over ten years – that’s right, increase. And that’s even before these gimmicks:

    1st Gimmick – Fiddle with Implementation Dates: True, the bill runs surpluses initially. Why? Because the tax hikes proposed to pay for the new program would begin in 2011, but the spending would be not start until 2013. This same thing happened with the Medicare drug benefit debate – lawmakers simply delayed implementation by two years in order to reduce the ten-year cost. Of course, this gimmick did not reduce the program’s true cost once fully implemented. So claims of deficit neutrality are hollow.

    2nd Gimmick – Ignores Long Term Costs: The President has repeatedly stated that he would not support health care without long-term savings. Yet this legislation – and others – fails to include any formal analysis of its long-term costs. Once the bill’s new healthcare spending is fully implemented, however, it would run expanding budget deficits that reach by $65 billion annually by 2019. Moreover, this initial CBO analysis significantly understates the long term cost. Extrapolating these trends, the bill could run budget deficits of approximately $800 billion total in its second decade, and even much more thereafter. Before lawmakers pass along huge new debts to America’s younger generations, they really ought to know how big they are going to be.

    Deficit-neutral? I don’t think so.

    Posted in Economics [slideshow_deploy]

    8 Responses to Don’t Be Fooled - House Health Care Bill Would Raise Long-Term Deficits

    1. Gail Leachman, Calif says:

      Call your elected officals TODAY, and tell them NOT to vote for any Health Care Reform plans. None of them are better than what we have now. Choice, privacy and control over our own bodies and finances; we don't need help from the government but to get out of the Health Care Reform business.

    2. Kenneth B. Feeley says:

      SIRS Being a new member,(two days)I respectfuly request a e-mail so that I may send someythings that I belive are important,so they may be addressed by your group even if I am not correct I belive I should know in order to be informed, all my comments will become the sole property of the Heritage Foundation THANK YOU K.Bruce Feeley

    3. Pingback: VIDEO: Miami to Protest Against Taxes & Gov. Spending – 7/21/2009 (Miami Protesta Contra Impuestos – Julio 21, 2009) « FactReal

    4. Steven Howard, Atlan says:

      I attended Congressman John Lewis' Town Hall Meeting on Healthcare this morning in Atlanta. After presentations from the minister at Ebenzer Baptist Church, and introductory remarks from several panelists, about 100+ people lined up to ask questions. There's a meeting this afternoon on the Hill this afternoon at 4pm where members of the Democratic Caucus plan to share district feedback with each other. It was very disappointing to witness the "give me" mentality of most present: "give me insurance, give me healthcare, I shouldn't have to pay/contribute," and the demonization of all businesses, especially the insurance and pharmaceutical companies. I was asked to share my questions/concerns in a follow-up email to Rep. Lewis, which is included below:

      Dear Congressman Lewis and Ms. Crowell:

      Thank you for taking my questions about small business definitions and tax burdens at this morning’s Town Hall Meeting in Atlanta. I shared that my partners and I had to choose between keeping the business open and providing healthcare benefits to our associates. We’ve launched a software/electronic publishing business with about 15 associates. I’m concerned about some of the language in the bill that I’ll hope you will address and seek to modify.

      1. Definition of Small Business. Is the definition of “small business” a payroll of less than $ 400 Thousand? Small businesses should be defined as businesses with fewer than 40 associates, or payrolls including employer contributions to benefit plans below $3 Million.

      2. Exchange Eligibility and Medicare Age. Section 202 of the bill addresses the Exchange. The language here says individuals are not eligible for insurance once they qualify for Medicare/Medicaid. This seems to force everyone from the public or private insurance they hold, to the Medicare/Medicaid program. That again increases taxpayer burdens and promotes system inefficiencies.

      3. Affordability Credits. Section 202 limits affordability credits at $80 Thousand. Is this a family cap or an individual cap? And how are these funded?

      4. Dental and Vision Care. Section 202 seems to provide dental and vision care benefits only to Premium Plan members. Is this correct? From a wellness perspective, all plans should have these as optional coverages.

      5. Mandating Same Benefits Across Plans. Please consider changing the language of the bill in Section 134 from mandating that all policies (private and public) provide the same benefits, and allow individuals and families to shop benefits across policies/plans. For example, why not allow those of us without children, or non-smokers, non-drinkers, etc. to buy into a policy without maternity, or drug rehabilitation, or psychiatric counseling benefits?

      6. Right to Switch Plans Once “Randomly Assigned.” Language in Section 202 speaks to citizen choice among plans, yet there is also language about citizens being randomly assigned to plans. Will citizens retain the right to switch providers even after they’ve been assigned to a provider?

      7. Unreasonable, Exorbitant Tax Burdens. The fees in Section 441 are harmful to small businesses and entrepreneurs. The current language calls for employers to pay 72.5% of associates premiums, or 8% of wages if salaries are over $400 Thousand. This is an unfair burden to small businesses. Further it appears that a penalty of 2.5% of gross income is assessed should a business or employee decide not to participate in the plan. Can you clarify who is assessed – the business, the employee, or both?

      8. Co-Payments. May I suggest that the bill should not eliminate copayments or cost sharing for preventative/wellness care? Citizens should contribute at reasonable levels to their well care costs. Further, there appear to be restrictions preventing the use of co-insurance to pay for cost sharing. What is the rationale limiting citizen’s choices in how to pay for services?

      9. Re-Insurance. Section 164 provides reinsurance for retiree plans. It also pegs retirement at age 55. Some companies, such as AT&T, provided optional early retirement/pension benefits to associates. Would these plans be covered, even if the retiree was younger than 55? More importantly, please consider using private, market-based reinsurance options, in lieu of creating another government bureaucracy.

      10. High Income Surcharges. The proposed surcharge on high income individuals is again harmful to small businesses. Assessing 1%, 1.5%, and 5.4%, with the 1% and 1.5% taxes doubling in 2012 provide disincentives to those of us trying to launch and grow our own businesses, and provide employment to associates in Atlanta, our State of Georgia, and nationally.

      11. Federal Healthcare Plan. Can you please clarify if Federal and Postal Employees are exempt from participating in the proposed plans? Will the plan offered to Congress and Federal employees be included as a plan to which all citizens may subscribe?

      12. Public Option Break-Even Requirement. Will the public option be required to break-even each year? If not, are we not unfairly advantaging this plan over private insurance options? Setting up a government insurance plan which is not required to break even is anticompetitive. If shareholders/investors/members of mutual insurance plans are forced by our laws to break even, then so too should the public option plan.

      13. Grandfathered Policies. Language in the bill limits new enrollments to firms offering existing polices. This limits consumer choice, and again, is interpreted to unfairly advantage the government plan. Am I correct in reading this to mean that anyone changing jobs, or having a life event that impacts insurance choices, is forced to the public plan?

      14. End of Life Counseling. There were questions asked today that were not answered about requiring end of life counseling sessions. These should not be mandated.

      15. Doctors at the Town Hall Did Not Support the Current Bill. Please note that of the several doctors and healthcare providers asking questions from the audience, not a single person was supportive of the current bill. Specifically, several physicians said that they could not keep providing services to their communities and patients if capped at 6% over Medicare/Medicaid.

      Again, thank you for the opportunity to voice concerns and help shape reforms. Please allow citizens and small businesses to have ala carte, cafeteria menu choices within plans, and provide tax incentives – not penalties – to all businesses encouraging them to offer healthcare.

      Respectfully,

    5. Pingback: Fix Health Care Policy | CBO Deals Another Crushing Blow to Obamacare

    6. Pingback: Morning Bell: CBO Deals Another Crushing Blow to Obamacare « The Daily Fridge

    7. Pingback: Fix Health Care Policy | Health Care Reform Cost Estimates: What is the Track Record?

    8. Pingback: Health Care Reform Cost Estimates: What is the Track Record? | Conservative Principals Now

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×