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  • Baucus Bill Does Not Bend the Cost Curve

    A Lewin Group study commissioned by the Peter G. Peterson Foundation, finds that although the Baucus health care bill (the legislation that recently passed the Senate Finance Committee) is often touted as the most fiscally responsible of all of Congress’s reform plans, it “relies on certain cost containment approaches that have not worked in the past” and therefore “does not bend the total health care cost curve downward.”

    Rather than fundamentally realigning incentives in the health sector to lower the overall cost of care, the Baucus bill imposes top down cuts in payments to medical providers which will only serve to shift costs around the current system. Here are some of the other key findings from the Lewin study on the America’s Healthy Future Act of 2009 (S.1796):

    • Adds to the Deficit. The bill would add to the federal deficit in the first ten years and beyond if it included a permanent “doc fix” to prevent cuts in Medicare payments to physicians under the Sustainable Growth Rate instead of only a one year temporary fix. Every year, Congress defers these reductions in pay to doctors but the bill creates false savings by pretending that Congress would suddenly let these cuts occur. More than $404 billion in savings over the first ten years are attributable to these savings– and reductions in uncompensated care funds for hospitals that treat the uninsured (DSH payments)– that are unlikely to fully materialize.
    • Increases Total Health Spending. Under the bill, total spending in health care would rise from 17 percent of GDP in 2010 to 25 percent in 2029. Spending by the federal government would rise by $400 billion over the next ten years and $1.6 trillion over the next twenty years.
    • Covers less than half the uninsured. Although the Baucus bill includes a an individual mandate, a personal requirement, to purchase insurance it would fall far short of universal coverage, only reducing the number of people who lack health insurance by 49 percent.
    • Adds Costs and Delivers Little Savings to Consumers. In the first ten years, the bill would increase consumer spending in the aggregate by 3 percent, or $254 million. After twenty years, consumer spending would increase by 6.4 percent, or roughly $1 trillion. Despite President Obama’s promise that the typical family would see $2,500 in savings under health reform, the Baucus bill would provide the vast majority of Americans who already have insurance an average of $8 in savings.
    • Increases Employer Spending. After 2016, employer spending on health care would increase steadily compared to current law due to the various fees and excise taxes included in the bill. As a result of rising costs and expansions in public coverage, 16 million people could lose their current employer-sponsored insurance as workers are dumped onto Medicaid or into an exchange to receive a public subsidy at the expense of federal taxpayers.

    Click here to read the full Lewin report.

    Co-authored by Kathryn Nix.

    Posted in Obamacare [slideshow_deploy]

    3 Responses to Baucus Bill Does Not Bend the Cost Curve

    1. Freedom of Speech, T says:

      Every time I hear a politician talk about "savings" I wonder what world these people live in.

      How can we "save" any money when we owe trillions in both funded and unfunded liabilities?

      What are we "saving"? Does "saving" mean they will not print or borrow as much money as they otherwise "could have"? Gee thanks. We don't "save" anything – never have. It is one gigantic shell game. Does anyone really believe the government is going to collect taxes for a health program and put it (save it) in a lockbox?

      Overall taxation and thus spending will not decrease. Even if they "save" some money in health care (which they won't), we will still get taxed to sustain the unpayable debt already accumulated. And, any money "saved" will be spent on something else.

      Thus, there is NEVER any OVERALL government savings". Conversely, we may get to a point where higher taxes cannot be reversed. Technically, the government cannot be bankrupt as they can always print more money. But what happens when our currency is virtually worthless? Can anyone say "banana republic"?

      Most of our financial and economic genuises who rule this country do not know how to legislate without spending – nor do they want to. Pork is power and they take your dollars to provide the pork.

      Instead of being creative and reducing government and its debt, the solution is to tax more and spend a whole lot more.

      HealthCare is one leg of the stool and it will not cover enough people at its cost to justify destroying good healthcare for the majority of the people.

      Can the tax and spenders be this stupid? I don't think so…

    2. Daver Ft. Worth says:

      As Thanksgiving approaches and we are forced to contemplate the leftover turkey we selected last year, that is still giving us heartburn; the question becomes how best to dispose of the waste?

      Because like radioactive waste we need to insure that the group of radical elements that are currently buzzing around Washington have no lasting influence or ability to effect change in the future.

      So my first thought would be a moonshot, or if not, a potentially deserted island like the one Congressman Gutierrez always liked to stand in front of near Peurto Rico where they could experiment with all of their little Socialist thinkings, gay agendas and enjoy their legalized reefer and legal immigrations?

      But first we need to vote them, so read my lips:

      No New Socialists!

    3. Patriot, Cincinnati, says:

      The more I read the greater I realize that this is not about our health and well-being. It is about government "power" and under the charade of health care, they will now be in the command towers of every American's life. There are many ways to correct the defecincies of our health care costs, Mediacare, etc. without "owning us".

      Remove the restrictions of fair competition and let our markets decide how to save us money and give us the best health coverage. If Washington signs this into law, we all loose, beginning with 30-45% of our doctors who say they will leave their practice. Show me one government program that saves us money or is not technically bankrupt? Medicare, Medicaid, Social Security, Veterans Admin., Post Office, etc., there is not one that is financially stable or even responsible.

      It is sad America, that we have allowed this to happen to our Country. It is time to say "no more" and use your voice and then your vote to stop this fraud producing government who is ruining our lives and that of our children.

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