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  • In the House Budget Committee, the Experts Expose the Fiscal Consequences of Obamacare

    On Wednesday, the House Budget Committee convened a hearing to explore the fiscal consequences of Obamacare. Lawmakers heard from Richard Foster, Chief Actuary at the Centers for Medicare and Medicaid Services (CMS); James Capretta, a fellow at the Ethics and Public Policy Center; and Dennis Smith, Secretary of the Wisconsin Department of Health Services.

    Foster’s remarks echoed the findings of the CMS Actuary’s report released last April. Of the promise that “if you like your current insurance, you can keep it,” Foster claimed that this would be “not true in all cases.” His analysis shows that 7 million Medicare Advantage beneficiaries will have to seek other coverage, and Americans with all types of coverage could be subject to displacement from their current plans.

    When asked if Obamacare would reduce steep growth in health costs—a central promise of the President’s health plan—Foster responded that this claim was “false, more so than true.”

    Rather than bend the cost curve downward, Obamacare will increase overall national health expenditures by $311 billion. It won’t reduce the cost of federally run programs: The new law expands Medicaid, and though it includes sweeping cuts to Medicare, Foster warns that these are unsustainable and could threaten seniors’ access to care if fully implemented. Finally, the law increases premiums, failing to reduce costs on all fronts.

    Obamacare also fails to address the federal spending crisis facing the nation in coming decades as a result of the skyrocketing costs of federal health programs. Instead, as Capretta explains, “at a time when the federal budget is already buckling under the weight of existing entitlement programs, the new law stands up three new ones which will enroll tens of millions of Americans into taxpayer-financed programs promising permanent access to uncapped benefits.”

    The negative fiscal consequences of Obamacare won’t be felt solely in Washington, Dennis Smith points out. In Wisconsin alone, state spending will face a net increase of $433 million between 2014 and 2019. All told, Wisconsin taxpayers will face $560 million in new costs, despite the fact that the state already has a higher insurance rate than will be achieved nationally under the new law. Obamacare is projected to bring the insured population to 94 percent of all Americans; 95 percent of Wisconsinites already have insurance.

    Indeed, in the Badger State, the cost of Obamacare will far outweigh its benefits for a majority of residents. According to Smith, 457,000 Wisconsin residents will be displaced from their current coverage. Premiums in Wisconsin’s individual market will go up 6.6 percent on average (and significantly more for younger individuals) and choice among health plans will be reduced.

    Moreover, says Smith, “46 percent of individuals who will move into public subsidies either through Medicaid or the new tax credit entitlement already have private coverage. When you add in the federal “buy out” of existing state coverage, a substantial amount of the new federal spending will simply replace federal dollars for existing private sector or state dollars without insuring a single new individual.”

    The example of Wisconsin highlights how ineffective a one-size-fits-all federal overhaul will be. One of Obamacare’s main goals is to increase coverage, but in a state with already high rates of insurance, reform would be better off addressing other priorities.

    The Budget Committee hearing laid bare the fact that Obamacare will fail at several key components of its mission. The new law ignores existing problems in the health care system while creating countless new ones for all Americans.

    Posted in Obamacare [slideshow_deploy]

    10 Responses to In the House Budget Committee, the Experts Expose the Fiscal Consequences of Obamacare

    1. Kevin H, College Par says:

      Foster's analysis states 54 million more Americans will be covered for only a 1% increase in health care costs, correct? Sounds liek teh overhaul is a winner to me.

      Thank goodness about Medicare Advantage, taxpayers should not be on the hook for uneeded subsidies to private insurers – how could you possibly be for paying $1,000 more in subsidies for services that regular Medicare beenficiaries receive – Medicare Advantage is nothing more than windfall on backs of American people for private insurers. Let's do away with it ientirely. I don't understand how any conservative could possible be for Medicare Advantage, unless private insurers are filling their pockets.

      I'd love to see the entire Medicare Advantage system dismantled – there is no reason to waste so much taxpayer money on it.

    2. franklobato says:

      In fact, under new health care reform your health insurance company will no longer be allowed to cancel your policy if you get sick, we should be doing this already! search online "Wise Health Insurance" it is a good place to find insurance if you have illness like me.

    3. Kevin H, college par says:

      Huge news in report released this morning:

      The report, to be released by HHS later today, argues that individuals and families purchasing coverage through the exchanges in 2014 will save 14-20 percent over what coverage would cost them if the law had never been enacted. These savings come from market reforms and regulations—it does not include the tax credits that will effectively reduce premiums for some individuals by more than half.

      Read more: http://www.politico.com/news/stories/0111/48334.h

    4. Kathryn Nix Kathryn Nix says:

      Kevin,

      Thanks for your comment. I would like to recommend to you this paper by Heritage health policy expert Robert Moffit, which explains the value of Medicare Advantage: http://www.heritage.org/Research/Reports/2008/06/….

      Kathryn

    5. Leon Lundquist, Dura says:

      The fiscal consequences of bringing about Socialized Medicine are incalculable, due to death and destruction of millions of American Lives. No exaggeration, the whole point of Obamacare is Central Government control of Medicine. Too bad I remember what the AMA and Big Pharma have done! All along they have produced an allopathic corner on the Health Care Market and no kidding, they produce inferior Medical Practices at truly unbelievably high expense.

      Obama's Shadow Government has a duplicate Agency to create Best Practices, their own government AMA, and they can fine Medical Producers millions of dollars for not conforming to any goofy Practice they dictate. In the end the People are the ones who actually do most of the hands on Medicine in this Country, Americans heal themselves, or not.

      The answer to the question, "What is the best Medical System?" is so simple, why do we have these 'experts?' Free Enterprise! Freedom of Medicine! No Government interference at all! No Government influence at all! Case by case, these problems are already solved, sue the Doctors for malpractice. Let the people decide on an individual basis the Insurance or risk they are willing to take. Then, let them suffer the consequences!

    6. Bobbie says:

      Good interview:

      Obamacae holding costs down. " false more so, then true" Yet the President stated to be true without false.

      The President: "If you like your plan you can keep it" Foster: "Not true in all cases." the president fostered false perceptions. That's not what was presented by the president. He left us no reason to believe he was lying and gives us no reason to trust.

      Sick of the traps. Not once did the president suggest it would drive costs up but in fact said it would lower. Costs are rising and have been rising and we won't be able to afford the insurance we "want to keep." Where are these increased costs going now? The whole thing has to be repealed, there are too many hidden traps set. This is regarding the health of our lives, excuses can't be made exception to. We need honesty and direct communication. This is UNCONSTITUTIONAL.

    7. Bobbie says:

      The president gave us no reason to believe he is hiding something.

    8. Kevin H, College Par says:

      Kathryn,

      I have a very difficult time understanding how you can argue against Obamacare, yet argue for Medicare Advantage. The way the 2003 Medicare bill was the most egregious seen in decades in Congress (from the process standpoint, as well as hiding the costs). The 2003 bill was unpaid for and amounts to an unfunded mandate costing the american taxpayers, which will add trillions to deficits and debt long term. I just can't how someone can support what was done in 2003, and the costly Medicare Advantage program, while so adamately opposiing the health reform law passed last year. The paper itself says these plans cost 12% higher while giving people more. In times when conservatives and liberals alike speak constantly of such deficits and debts, how can we reconcile paying 12% more for something for extra benefits.

      I'd like to see it done away with and put all that extra funding back into the treasury to fight mid and long term deficit and debt.

      Will the health care plan passed last year and teh exchange to be put in place not offer:

      - Broad Access to Private Health Plans

      - A Variety of Health Care Options.

      - Broader Health Benefits

      - Superior Value for Health Care Dollars

      Those are the 4 main bullets in Dr. Moffit's piece on why MA offers such great value. I believe the same case can be made for the health reform bill passed last year.

      I understand yours and Dr. Moffit's points on the value, but have hard time reconciling how you can oppose one so badly and be a proponent for the other.

    9. Bobbie says:

      I'd like to see whatever the problem is "reformed." Like we were told it would be. There is no reason to set a whole new plan, with consequences, fewer choices, fewer personal control, no privacy, more expense, more confusion in place who's advertising hid the truth of the consequences.

      obmacare: "the affordable health care act" is nothing to be trusted.

      Why the time to create to implement another "government" program, when government proves to be the problem? Medicare, Social Security, Medicaid, S-chip, etc… isn't trustworthy and it's unconstitutional.

    10. TC says:

      My insurance WAS raised – and have NEVER been touched, nor changed in the last almost 7 yrs – due to BOcare. We now pay $270 more a month in premiums, we have higher co-pays, we pay separately now for dental and vision, we have to meet a 4k deductible as well as pay 20-30% of all procedures. My MD has said he no longer will be taking our insurance.

      SO we lost our doctor, we LOST our plan, we DIDNT have a choice in how it changed and thank to BO we are 10k poorer for it yearly. We are on the cusp of middle class and how is this a good thing?

      BO lied. Plain. Simple. And everyone yelled at the brave senator for calling him out – tsk tsk.

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