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The President's Health Proposal: Further Jacking Up the Cost of Care

Posted By Kathryn Nix On February 24, 2010 @ 5:30 pm In Obamacare | Comments Disabled

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In anticipation of the February 25th health care summit with members of Congress, the President released his proposal [2] for pricey, government-run health care.  The White House estimates the cost of the proposal to be $950 billion over a decade, decreasing the federal deficit.  However, health policy expert James Capretta, a former senior official of the Office of Management and Budget (OMB),  shows in a recent paper [3] that this is not only inaccurate, but far from reality.  Capretta’s research [3] shows that ten full years of implementation of the President’s proposal would cost closer to $2.5 trillion, with the strong likelihood of far exceeding this amount.  Here’s how:

  • The President’s proposal ignores “doc fix” legislation, which would cost roughly $200 billion over ten years.  As Capretta notes, it is ironic that the President does not account for this provision, but includes several other Medicare provisions in his proposal.
  • Non-coverage spending would add about $90 billion to the cost of the bill.
  • Cost estimates for the President’s plan should apply to the ten year window from 2011 to 2020—not to 2019.  This would add approximately $200 billion more to the cost of the bill.
  • The President’s plan includes the CLASS Act, premiums from which are double-counted.  Fixing this adds $72 billion to the cost of the bill.
  • The true ten year window of the bill, including spending reductions, new revenues, and new spending, is 2014 to 2023.  During this period, the Senate bill would cost $2.3 trillion.  Adding the President’s additional provisions, at $75 billion, as well as the aforementioned provisions, arrives at a grand total of over $2.5 billion.

According to Capretta, the newly created entitlement programs created by the bill are likely to expand over time to include more Americans.  In addition, spending cuts to current entitlement programs have little chance of coming to fruition, as these cuts would put several institutions in financial trouble.    Capretta’s full analysis can be read here. [3]


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/02/24/the-presidents-health-proposal-further-jacking-up-the-cost-of-care/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/money_stacks090211.jpg

[2] proposal: http://www.whitehouse.gov/health-care-meeting

[3] a recent paper: http://www.heritage.org/Research/HealthCare/wm2816.cfm

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