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The Senate Health Bill: Budget Gimmicks Galore
Posted By Nina Owcharenko On November 20, 2009 @ 7:21 am In Health Care | 17 Comments
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:
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?
Article printed from The Foundry: Conservative Policy News Blog from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2009/11/20/the-senate-health-bill-the-true-costs-are-unknown/
URLs in this post:
 estimates: http://www.house.gov/budget_republicans/press/2007/pr20091119cboscore.pdf
 points out: http://www.cbo.gov/ftpdocs/107xx/doc10731/Reid_letter_11_18_09.pdf
 CBO Director: http://cboblog.cbo.gov/?p=403
 analysis: http://www.heritage.org/research/healthcare/upload/OACTMemoHR3962.pdf
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