The Senate Health Bill: Budget Gimmicks Galore
Posted November 20th, 2009 at 7:21am in Health Care 
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Senate Majority Leader Harry Reid unveiled his 2,074 page health care bill with claims that the massive measure falls under the $900 billion cost threshold promised by the President.
To put it charitably, the truth is more complicated. The bill depends on budget gimmicks and unrealistic assumptions and projected savings to reach this goal over the 10 year budget window.
Consider the four most outrageous “Budget Tricks”. By its construction, the bill:
- Excludes the Costly “Doctor Fix”. Like the House bill, the Senate bill conveniently ignores the over $200 billion price tag associated with stopping the unavoidable cuts to physicians under the Medicare program. Separating the health care bill like this enables Senator Reid to claim his bill will reduce the deficit. However, in a letter released today, CBO estimates that combining the House bill (H.R. 3961) with the “Dr. Fix” bill (H.R. 3962) would actually “add $89 billion to budget deficits over the 2010–2019 period.”
- Manipulates the new CLASS Act. The Senate bill, like the House, also includes a new government health care program for long term health insurance, the CLASS Act. The structure of the CLASS Act has premium collections raising revenues for the government in the first 10 years, appearing to aid in reducing the deficit. But the CBO points out that while the CLASS Act would generate net receipts for the government in the initial years when premiums would exceed total benefit payments, but would eventually lead to net outlays when benefits exceed premiums.”
- Delays Costly Benefits. The Senate bill is cleverly designed to gather revenues (higher taxes, fees, and other offsets) over the full 10 year window but delays paying out the major benefits, like subsidies, until the last 6 years. So, the 2010-2019 estimate is not a full cost estimate of all provisions fully implemented and will certainly add significantly to the true cost of the bill. Moreover, as with all government programs, they always cost more than originally promised.
- Depends on Uncertain Cuts to Medicare. The Senate bill depends on using cuts to Medicare to pay for its $1.2 Trillion coverage expansion. As explained by the CBO Director:
Adjusting for inflation, Medicare spending per beneficiary under the bill would increase at an average annual rate of roughly 2 percent during the next two decades—much less than the roughly 4 percent annual growth rate of the past two decades.
These dramatic savings, of course, assume that these spending cuts stay intact. If the “Dr. Fix” is an illustration, it is highly unlikely that Congress will live up to the deep cuts it proposes for Medicare. As the first round of cuts get close, a frenzied team of high powered lobbyists for the health care industry will no doubt be wearing out shoe leather going door to door in the corridors of Congress. They’ve been successful just about every time.
Moreover, these cuts include over $118 billion in ‘savings’ resulting from changes to the highly popular Medicare Advantage plans, a move that will directly impact the benefits of millions of seniors. In his analysis of the House bill, where the House of Representatives enacted similar reductions, the Chief Actuary for the Centers of Medicare and Medicaid Services has confirmed, these changes will result in “less generous packages” and enrollment “would decrease by about 64 percent.”
True Costs Unknown
The reality is this Senate bill, like its House counterpart, costs far more than the President’s $900 billion promise and is more likely to run in the trillions. How is it that a bill whose purpose is to save money starts out, with careful caveats and unrealistic assumptions, by spending nearly a trillion dollars?
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6 Responses to “The Senate Health Bill: Budget Gimmicks Galore”
Joe (Washington, D.C.) on November 20th, 2009 at 7:21am said:
The headline, “The Senate Health Bill: The True Costs Are Unknown” should be changed to, “Any Bill in Congress (whether written by Democrats or Republicans): The True Costs Are Unknown”. CBO _estimates_ the cost of all bills through Congress. No one knows the true cost until a bill is put into practice. And don’t tell me Republicans have never used budgetary sleight-of-hand to make a bill look less costly than it actually is.
AntonioSosa, Florida on November 20th, 2009 at 7:21am said:
The Senate bill is “superior” to the house bill in that it contains more lies, more manipulation, more bribes at our expense, and more measures to harm Americans.
To get the House to pass the Obamacare scam, Obama and his accomplices lied, manipulated, intimidated, coerced and bribed (at our expense) Big Pharma, the AARP, the AMA, “Catholics” like Cao, insurance companies, etc.
To get the Senate to pass the scam, Obama and his accomplices have perfected the lies, the manipulation, and the intimidation. And they are bribing (at our expense) additional organizations and people like Mary Landrieu.
AntonioSosa, Florida on November 20th, 2009 at 7:21am said:
Who REALLY wrote the House and Senate bills? We know they were NOT written by our representatives. Our congressmen and senators have not even read them! They are just being manipulated, coerced and bribed into passing them.
It seems the basic bill was written before Obama was even elected. By whom? By people paid by George Soros and other U.S. enemies, who invested billions to get Obama elected?
Now the bill is just being tweaked to better manipulate people. The intent of the bill is just government control.
It’s interesting how this bill has striking similarities with the “URGENT,” “SAVE-THE-POOR” constitutions that Venezuelans, Bolivians, Ecuadorians were manipulated, coerced and bribed into approving, constitutions that have taken away people’s freedoms and rights, and that have multiplied poverty and despair.
We hope our representatives have the courage and integrity to defend us from the criminal Obamacare scam, which seeks to impose socialism/Marxism on us.
Reaganite Republican/ California on November 20th, 2009 at 7:21am said:
Look, most people don’t want this bill- and they’re starting to get pretty mad about the power-drunk Dems’ continued rampage.
The Democrats face a bloodbath next year… some are saying they could lose over 100 seats.
And by 2012?
The GOP could take forty states running Gilbert Gottfried, lol
Hope-n-Change = Train Wreck
http://reaganiterepublicanresistance.blogspot.com
Larry on November 20th, 2009 at 7:21am said:
This socialist agenda President is hell bent on making America a 3rd World Nation.I have been against Barack Hussein Obama since the day he announced his candidacy. While others, even some conservatives hypothesized he would be a mainstream Democrat, I wrote an entire book dedicated to analysis showing he was an unreconstructed socialist.
But the election didn?t go our way, and I wondered how long it would take others to come around to the reality that he was a hardcore leftist set out to remake America as a 3rd world failed socialist state.
I have to admit to being surprised at how fast the wheel is turning. First the independents that voted for Obama started to have regrets. Now just one year after his election we are hearing about Democrats in open rebellion against the messiah-in-chief.
scratchgolf on November 20th, 2009 at 7:21am said:
All of this will point to bankruptcy of the government. If “health care” won’t do it, fiat money policy or foreign policy will. Just let people live without the un-free interference of “elected officials”. As if electing someone guarantees they’ll represent you. Now that one is a good joke with hidden costs.