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  • CMS Projections Confirm Runaway Health Care Spending

    Yesterday, the Centers for Medicare and Medicaid Services (CMS) released its new projections of national health spending trends through 2020. The findings, which estimate health care spending to reach more than $4 trillion by 2020, come as no surprise: Runaway spending has overtaken the United States health care system and is on the rise. More notably, the study confirms Obamacare does not “bend the cost curve” but only increases government’s share of spending in the health care system instead.

    Already, the White House has tried to spin the report as a victory for its health care legislation. Writing for the White House Blog, White House Deputy Chief of Staff Nancy-Ann DeParle touted the all-time low growth rates of the past two years. Indeed, in 2010, health care spending remained an unchanged (yet still breathtakingly large) 17.6 percent of gross domestic product (GDP). In dollars, the nation was estimated to have spent $2.6 trillion, growing by a new historic low of 3.9 percent from the previous year. But as the authors explain, the reason for decelerated spending was the economic downturn and the impact high unemployment had on reducing private coverage—nothing to cheer about. Reduced payments to private plans under Medicare Advantage also contributed to a decrease in Medicare spending.

    As the economy recovers and the major provisions of Obamacare kick in, national health spending is projected to grow at quite a clip—increasing, on average, 5.8 percent each year. By 2020, the nation will spend $4.54 trillion on health care, or close to 20 percent of GDP. (For the sake of comparison: In 2010, federal tax revenue totaled 14.9 percent of GDP, and all federal spending combined amounted to 23.8 percent of GDP.)

    The most striking impact of Obamacare is its enormous expansion of the role of government in the health care system. The new law increases government health spending by adding as many as 25 million Americans to Medicaid, a health program originally intended for only the truly vulnerable members of society. It also creates a new federal subsidy program to purchase insurance in the exchanges.

    By 2020, projected total government spending on health care will be 49 percent of all health expenditures, and Medicare and Medicaid will account for approximately 20 percent each of national health spending. In reality, we will likely reach the “tipping point”—where government spending exceeds private spending—sooner, since the analysis must assume that several unlikely cuts in Medicare spending occur.

    For example, Medicare payments to physicians are scheduled to be reduced by 29.4 percent at the end of this year under the sustainable growth rate formula. But Congress is likely to delay these cuts, as it usually does. Assuming the cuts do occur, growth in Medicare spending would decelerate to 1.7 percent in 2012. The more realistic growth rate, the report makes clear, is 6.6 percent—almost four times greater. Current law also assumes similar Medicare cuts under Obamacare to hospitals and other providers will occur, when in fact the CMS chief actuary has warned relentlessly that, were they to go into effect, reduced access to care for Medicare beneficiaries would be inevitable.

    In her article, DeParle also claims that, thanks to Obamacare, “more Americans will get coverage and save money and health expenditure growth will remain virtually the same.” The reason health expenditures appear to remain level has much to do with the assumed cuts in Medicare described above, as well as the assumption that cost growth will decelerate as a result of the “Cadillac” tax imposed on high-cost insurance plans in 2018. Whether that politically unpalatable tax will actually go into effect remains a worthwhile question. Finally, the individuals the authors assume will become newly insured are generally young and healthy—a population that would not be expected to increase overall spending significantly.

    The ultimate goal of health reform should be to achieve better value so that more Americans can receive coverage at lower cost, without sacrificing the quality of care. CMS’s health care spending projections show that President Obama’s health plan falls short of achieving this. Instead of “bending the cost curve,” the new law will only increase government health spending and the number of Americans who will depend on taxpayer-subsidized, government-controlled coverage.


    Posted in Obamacare [slideshow_deploy]

    13 Responses to CMS Projections Confirm Runaway Health Care Spending

    1. Pingback: CMS Projections Confirm Runaway Health Care Spending | Williams Tea Party

    2. Cathi Smith says:

      The boasting of this administration about the benefits we will see from this program absolutely dismays me. These "improvements to the cost and quality of our healthcare is the biggest traitorous act of this administration. Spending us into oblivion is a sign of a government out of control in its grasp for power, add to that the true costs of this program one must admit that getting control of our budget once the true costs hit will be much harder then the drama going on now in this administration.

      I still am not sure how a bill that was not read, even though passed could actually become law. And as we learn all the hidden rules, regulations, and costs add up even higher there has got to be a serious effort to get us, the American citizens out of it. I absolutely detest that neither myself or my family members will no longer have any say in the most important, private, decisions in health for ourselves and our families. Health, our quality of life impacts everything you do, every thought you have, and every single dream or plan for our futures. A government that lies, tells us we can keep our insurance if we like it, that says we will get better quality care at lower prices, that no one will be without coverage, is a government led by a man whose end goal is NOT the type of plan that was passed, but actually single payer.

      This givernment, the most devious, unconstitutional, un-American, and unaccountable administration has taken my ability to manage my own healthcare, and everyone else born now, or in the future. This government who says they can have the same healthcare system as other countries, but because it was planned by them, it will work. A government whose workers compensation guidelines were set up so that employees would be guaranteed healthcare in the event of injury on the job. Workers compensation ODG guidelines have been adopted for healthcare program.

      I fear for our futures, I have experienced workers compensation for the last 12 years because my husband hurt his back on the job. If only we had known then what we know now. We would have never filed a WC claim, instead waiting and saying it happened at home. My husband, I guarantee you would have been treated with the appropriate procedures and we would have moved on with our lives. Instead, we have to ask the governments permission and approval for everything, and rarely get it. Who once was a strong man wanting nothing more then to work and support his family is now a man that is getting worse every year, who has stranger after stranger deny him the medical procedure that every human being in America can get in private insurance. We cannot even pay cash, I would mortgage my house if I could, but for some reason paying cash is insurance fraud.

      I am begging every single person to fight this. My husband and I know what life is like when your health is a line item in a budget. Your quality of life WILL suffer, your choice and self reliance will disappear, you will no longer be able to decide your future because every bit of it is in the hands of someone who doesn't care about you, doesn't care about your health, doesn't care about your life. All they care about is their bottom line, and in that fight they hold all the cards, you hold nothing.

      Fight it, vote for only those who will repeal this, because I promise you…your future, your kids futures are not in their own hands, their own families most important and constant thought. It is in the governments hands and if that doesn't scare you to death, I don't know what will.

    3. Christopher Raupp says:

      Let"s try the alternative plan, where only part of the population can obtain health care, and the rest can just curl up in a corner and die.

    4. SavrThePlanet says:

      Health care costs would keep rising because of rise in population an at the same time more people getting sick year after year. Government is trying to help the public. Going back to fundamental problem, people have to watch their lifestyle and what they eat; also, cleansing your mind to keep good mental health is vital.

    5. @varpstr says:

      Legislating failure!. Instead of some simple rules to control costs, we will soon have 158 new agencies containing a mindless meddling miasma of finger pointing prawns and litigious paper chasers, over a billion dollars added to the federal budget alone just to intimidate hard working medical workers and keep track of numbers added to the federal budget. This is the equivalent of states capping energy costs below production costs, not a good approach. If the hospital cuts services or blocks upgrades to control costs, they are evil tards who short their patients. No doctor will be able to set up a NEW practice because installing newest tools (insisted by the state) are far too costly (as insisted by the state). If you cut salaries and don't paint the walls, the doctors and nurses move elsewhere and the hospital fails or hires substandard help (VA hospitals all over again. Do we get mandatory government experiments to offset costs like the VA? Really!). If they add new or improved equipment, they are crazy, doomed, evil pushers of fairy tale cures and rippers offers. If they provide whitewashed hostels housing for the sick, like WWII Germany or Cuba, the government is happy and the patient, what about the patient, now treated behind closed records and subject to the austerity severe of a maddened meddling greedy socialist state, dieing of unknown causes and without recourse ( you can't sue city hall). Average wait goes to 48 hours, average staffing goes to zero, lab tests and tools? ROFL, facilities are then set by the state auditor,…. and certified adequate. Adequate? What do you mean the standard catheter doesn't work? Try it again Brunhilda! Put some muscle in it. That's a girl, knew you could…..

    6. Pingback: PITHOCRATES » Blog Archive » Raising the Debt Ceiling may be Worse than Default

    7. step 2 usmle says:

      Step 2 usmle is an examination completely different from what you experience on the traditional hospital wards. The scope of the exam extends beyond accurately making a diagnosis and tests certain skill sets not obvious to international medical graduates. The NY CS Prep course provides an intensive, hands-on seminar highlighting what is required to pass the exam. The course takes you step by step through what is required of you during the exam and ends with a mock exam simulating the real test experience.

    8. step 2 usmle says:

      Step 2 usmle is an examination completely different from what you experience on the traditional hospital wards. The scope of the exam extends beyond accurately making a diagnosis and tests certain skill sets not obvious to international medical graduates. The NY CS Prep course provides an intensive, hands-on seminar highlighting what is required to pass the exam. The course takes you step by step through what is required of you during the exam and ends with a mock exam simulating the real test experience.

    9. Bobbie says:

      health costs through government control would rise in a flash for ANY claim government sets whether it be true or not. As many immigrants of this country complain about what's available and find some American medical ethics in contrast to their cultural or religious beliefs, tells me they should start their own hospitals and clinics to suit their culture and needs. Instead the government exploits them with their permission, but at a cost put on tax payers.

      It's best in the rise of population, that people take the initiative to pay their own personal health costs which would reflect much more honesty in the costs and control would be the peoples not the governments. If government was trying to help people, especially those not paying ANY share, they'd help people get on their own two feet. The essence of America! FREEDOM and INDEPENDENCE!!

    10. jeff says:

      The only reason spending is going down is because government quit paying the bills and DR's are forced to drop medicare and medicaid

    11. guest says:

      No, government is certainly NOT trying to help the public. Read the Patient Affordable Care Bill if you can stomach all 2000 + pages of it. Why assume that they are trying to help you? READ IT. It is all about control. The bill nationalized the student loan system, meaning that it is now a socialist system run by the government to do with what they will – and what they will is to raise interest rates. It also funds a private militia for the president, destroys what is left of medicare and carries a $2000 penalty if employers with more than 50 employees don't carry Cadillac insurance plans. Guess what – this ensures that small businesses will cap their employees at less than 50. Do you really not recognize fascism when you see it? Obama is helping us to death. Literally.

    12. guest says:

      It's fascinating how much censorship exists on the web these days, isn't it? Proud to be taking part of the censorship parade, are we?

    13. Jeanne Stotler says:

      Anyone who doubts the evil of Obama care BUY and READ "Why Obama Care is Bad for America" It will open your eyes. If you think it's good, what do you think waiting 3 mos. or more to see the doctor for a lump, or not being able to get a GOOD doctor because you are on Medicare. I am a nurse and most DRs in clinics I would not go to, I am not talking about those who vol., in spare time. I for one like being able to choose my DR. and and getting an appointment in a day or so, immediaditaly if an emergency. If you think ER's are crowded now wait until Obama care is effect, you'll be there days not hours.

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