Lawmakers Warned on Cost of Health Bills

Washington Post: Negotiators Want New Plan After Congress' Budget Analyst Says Current Proposals Will Raise U.S. Costs

(Washington Post)  This story was written by By Lori Montgomery and Shailagh Murray.

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Congress's chief budget analyst delivered a devastating assessment yesterday of the health-care proposals drafted by congressional Democrats, fueling an insurrection among fiscal conservatives in the House and pushing negotiators in the Senate to redouble efforts to draw up a new plan that more effectively restrains federal spending.

Under questioning by members of the Senate Budget Committee, Douglas Elmendorf, director of the nonpartisan Congressional Budget Office, said bills crafted by House leaders and the Senate health committee do not propose "the sort of fundamental changes" necessary to rein in the skyrocketing cost of government health programs, particularly Medicare. On the contrary, Elmendorf said, the measures would pile on an expensive new program to cover the uninsured.

Though President Obama and Democratic leaders have repeatedly pledged to alter the soaring trajectory -- or cost curve -- of federal health spending, the proposals so far would not meet that goal, Elmendorf said, noting, "The curve is being raised." His remarks suggested that rather than averting a looming fiscal crisis, the measures could make the nation's bleak budget outlook even worse.

Elmendorf's blunt language startled lawmakers racing to meet Obama's deadline for approving a bill by the August break. The CBO is the official arbiter of the cost of legislation. Fiscal conservatives in the House said Elmendorf's testimony would galvanize the growing number of Democrats agitating for changes in the more than $1.2 trillion House bill, which aims to cover 97 percent of Americans by 2015.

A lot of Democrats want to see more savings, said Rep. Mike Ross (D-Ark.), who is leading an effort to amend the bill before next week's vote in the Energy and Commerce Committee. "There's no way they can pass this bill on the House floor. Not even close."

Republicans also seized on Elmendorf's remarks, with House Minority Leader John A. Boehner (R-Ohio) saying they prove "that one of the Democrats' chief talking points is pure fiction." Senate Minority Leader Mitch McConnell (R-Ky.) said Elmendorf's testimony should serve as a "wake-up call" to Obama and Democratic leaders to heed requests from lawmakers in both parties to slow down the process.

Sen. Olympia Snowe (R-Maine) said she delivered that message directly to Obama at the White House yesterday, and strongly urged him to give up his August deadline so bipartisan negotiators in the Senate Finance Committee can craft a new reform plan that does more to control costs.

"I think it would be prudent for the president to be patient," said Snowe, whom Obama is courting aggressively. Bipartisan approval of a finance bill "can provide huge impetus for the success of this legislation and achieving broader support as it goes through the legislative process."

Talks in the Senate broke late yesterday, with plans to resume next week. Senate Finance Committee Chairman Max Baucus (D-Mont.) said the group is considering about a dozen options to cover the estimated $1 trillion cost of its package, including reductions in Medicare spending and additional tax increases.

Sen. Charles E. Grassley (R-Iowa), whose support could compel numerous GOP senators to take a serious look at the package, said he is "hoping" to embrace the final product. Otherwise, he said, "I wouldn't be at the table." After Elmendorf's testimony, Grassley said Senate negotiators are determined to "overcome the shortcomings" of the House proposal.

The chairman of the Senate Budget Committee, Sen. Kent Conrad (D-N.D.), also has taken a leading role in the Finance Committee negotiations. Yesterday, when Elmendorf appeared before Conrad's committee to testify about the nation's long-term budget problems, Conrad focused his questions on the House and Senate committee measures, which were drafted without Republican input.

"I'm going to really put you on the spot," Conrad said. "From what you have seen from the products of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?"

Elmendorf responded: "No, Mr. Chairman." Although the House plan to cover the uninsured, for example, would add more than $1 trillion to federal health spending over the next decade, according to the CBO, it would trim about $500 billion from existing programs -- increasing federal health spending overall.

Some provisions of the bill have the potential to trim spending further, Elmendorf said, but "the changes that we have looked at so far do not represent the sort of fundamental change, the order of magnitude that would be necessary, to offset the direct increase in federal health costs that would result from the insurance coverage proposals."

Asked what provisions should be added, Elmendorf suggested changing the way Medicare reimburses providers to create incentives for reducing costs. He also suggested ending or limiting the tax-free treatment of employer-provided health benefits, calling it a federal "subsidy" that encourages spending on ever-more-expensive health packages.

Key senators, including Conrad, have been pressing to tax employer-provided benefits, but Senate leaders last week objected, saying that the idea, which Obama opposed on the campaign trail, does not have enough support to win passage. Yesterday, Baucus said White House opposition had hindered acceptance of the tax, which critics said would target police and firefighters who receive generous benefits packages.

Grassley said he urged Obama earlier this week to reconsider the tax, which the CBO has repeatedly identified as one of the best tools available for driving down long-term federal health spending. Obama said he could not do that, Grassley recalled. "Does he really want to bend the cost curve? He ought to be out in front on this issue and endorse it," he said.

The benefits tax is also hugely unpopular in the House, which has instead proposed a surtax of as much as 5.4 percent on income exceeding $350,000 a year to pay for health reform. "You're not going to get a tax on health benefits," said Rep. George Miller (D-Calif.), chairman of the House Committee on Education and Labor.

But House Speaker Nancy Pelosi (D-Calif.) said she welcomes other efforts to improve the bill, including demands for additional savings.

"Can there be more? I think so," Pelosi said. "And that is what the legislative process is about. You don't write the whole bill, introduce it and then go to the floor. This is the time now for an open process of bipartisan review of the bill in the committees."

Meanwhile, a growing number of physician groups are also objecting to the House package. Although the chief executive of the American Medical Association pledged yesterday to "help build support" for the legislation, as many as 20 state medical societies have drafted a letter to congressional leaders vowing to fight creation of a government-sponsored health insurance program that could compete with private firms.

Staff writer Ceci Connolly contributed to this report.

[jab232]

They can work out the cost. It is a Trojan horse.

If I could speak personally to Mitch McConnell and his GOP friends, I'd ask them to explain in detail how their own health care insurance works. How much co-pay do they pay? What are the limits on the policy? Can they take the policy with them when they retire?

The answers might tell me a lot about why they are against a public option health care plan.

They have excellent insurance with no rescissions. Why should they care about anybody else, especially since they getting millions in campaign contributions and other perks from the health care lobbies and insurance companies.

[babooph]

The rich benefit greatly by delay-more time to suck the massive tax rip off,& for their sick drunks,a source of local transplant organs,now that the Chinese are too well off to supply them.The shorter the middle class life span,the more social security $ available for the general fund tax cuts to continue for them.

[qpublic]

Does anyone believe that taking 17 Billion out of Medicare to finance this new health welfare program is going to work? Medicare is already scheduled to go broke in 2017!! The population is continuing to age, therfore less workers supporting more elderly. Face facts, if you want this new welfare program then there is going to be new taxes. Knowing how efficient the govt. is we might as well work alittle overtime and pay for our own healthcare. But that's the real problem, the politicians know that people are hoping to get something for nothing, or have someone else pay for it. Remember that's why we needed welfare reform under Clinton, too many poeple wanting something for free.

[jab232]

What's the cost of not doing it? Why is it that we don't factor in the cost of all the health care bankruptcies, all the human cost? Could it be that too many people are getting rich on the present system and they don't care what happens to those hurting? Or could it be that congresspeople and their families have the best health care insurance in the U.S., so they don't care about us peons?

Health care reform will probably not pass until the majority of Americans are uninsured and going to Emergency Rooms to get their medical care without paying. They won't have any other choice.

Get off your duff, rich, privileged congress people. Quit catering to the lobbies and the rich health care establishment. Pass a public option plan paid for in part by taking high incomes.

[cydygitt1]

It is simply amazing how the $1 Million per day the for-profit GREEDY insurance industry is spending on lobbying against true health care reform is helping the braindead foxnewsus propagandus homosapien subspecies take America down the same dark path that the bush monkey did for the past 8 years.

The current cesspool of waste and abuse called the for-profit health care system needs immediate reform before the 80 million baby boomers retire over the next 2 decades, or America will be totally bankrupt.

[babooph]

Where were these guys when the costs of 2 endless wars & the increases dept of offense[oops defense],were needed-VERY quick funding,almost no votes against,no caps,no wonder this nation is in such a mess.

[j_mcdonald-2009]

OK, can someone reconcile this doom-and-gloom with the following, which says the CBO predicts a $6B SURPLUS? They are so wildly different that someone has to be seriously wrong.

News from the Energy & Commerce, Ways & Means, and Education & Labor Committees on the CBO estimates released last night on America?s Affordable Health Choices Act:

July 17, 2009

Washington, D.C. ? The Congressional Budget Office (CBO) released estimates this evening confirming for the first time that H.R. 3200, America?s Affordable Health Choices Act, is deficit neutral over the 10-year budget window - and even produces a $6 billion surplus. ...

[j_mcdonald-2009]

I think I found the explanation. In a nutshell, there are $245 billion in cost savings that have not been covered by existing legislation, so the CBO can't count them yet. But they are expected to become law, so the net effect will be a surplus of $245-239 = $6B.

Bottom line, it looks like the bill, when combined with related legislation, will provide a surplus, even though it appears to add to the deficit when considered in isolation.

[Hal_Horvath]

The partisan comments on both sides are useless.

These graphs show the U.S. health care trend -- out of control total national costs (regardless of insurers). See especially the 6th graph:

http://chartingtheeconomy.com/?s=health+care

This is from the incentive system in the U.S. -- doctors are incentivized to give too many tests and treatments. The reimbursement of piecemeal fee-for-service from insurance sets this up.

*That's* what needs reform, because all of the other goals: quality, Universal care, you name it...depend on the long term cost curve for the entire nation.

So talking about just the cost of a public subsidy for the poor (the current "cost" debate on the new legislation) is *beside* the point.

We need real reform that is more fundamental.

See findingourdream.blogspot.com

[wmsshields]

This bill has nothing to do with saving taxpayers any money. This bill is all about the federal government grabbing more power -- more control over your lives. Consider that the day after Elmendorf gave testimony that the bill would increase government spending, our president went to great lengths to pressure congress to hurry up and pass the bill. He loves to spend, he loves to control, he loves putting spin on facts, he hates Americans freedoms, everything he does is to gain control over us.

[1987--]

The issue is health care in the US. It has been converted to health insurance in the US.
Politicians have a big concern on protecting the health insurance industry not providing health care.
The health insurance industry is the major contributor to the health care cost issue. If you are not in one of their programs, the costs are outrageous for even minor care. They own, control or have special contracts with most of the major hospitals and have special contracts with the pharmaceutical companies. Since most have gotten insurance or are getting coverage from a government program they can keep pushing up the expense of care for anyone who is not in the program to keep the enrollment high even when they keep pushing up the cost of enrollment.
At one time hospitals were non profit organizations run by communities. The average person did not have insurance provided by the company were they worked. The average person could afford care from the hospital and/or doctor for the normal medical needs. Insurance that was purchased was major medical to cover very expensive operations and conditions like heart attacks or cancers. We had universal health care then.

We need to move back toward that system or provide a system of federal run hospitals and doctors that will provide care at affordable prices for treatment and medicine.

[jsd330]

Check out the insurance laws in your state, then see why your health insurance costs are so high. How come the same plan by the same insurance company can very by hundreds of dollars from state to state? It's called government regulation. Most hospitals are non profit, but they still have to operate in the black. They have to buy supplies, pay staff, buy expensive medical equipment and the list goes on. Of course they could try paying their staff minimum wage. Suppose the company you worked for was made to become non - profit and they cut your wages, so they could operate in the black would that be OK with you?

[sjc_1]

I would rather have them pass a bill this year and adjust it over time. If you let it sit, it will just sit like it has for more than 70 years. I believe that taxing insurance benefits provided by employers as income is the way to go, but that does not seem to be on the table.

[imprisoncheney]

What an obscene joke.

The Congressional prostitutes/lobbyists on Big Biz'z payroll . . . talking about the "shocking!" cost of public-option healthcare . . .

Like the dysfunctional system we have in place now is soooooo "wonderful" . . . and doesn't suck &800 billion from US taxpayers, like it does.

[speakinup22]

yup - looks like yor whole life has been an obscene joke, given your politics.

[mary-miami]

Healthcare is a human right. Everyone should have the opportunity to see a doctor if they need one. Many people don't make enough money to pay a physician for a simple check up. So they put up with illness. If it's a flu, and they happen to be a strong person, they can get over it naturally but if they are frail, they might die. Also, years go by, and sometimes they have a disease that might have been curable if it would have been caught early. Those are the full time workers earning a minimum wage of seven dollars, I haven't even mentioned the unemployed through no fault of their own. Even if it means waiting six months for treatment, its better than never getting to see a doctor. While we're at it....How about vision and dental also? I support President Obama one-hundred percent. The only President we've had in the U.S. so far, who's not giving in to the republicans. He will become a national hero if he succeeds in leading the nation out of this Depression.

[whatsup49]

if congress and snobama want to continue to tax me, i won't be able to save anything, as pelosi said she is open to demands on savings. geez louise, i barely make it now on my less that 20k gross annual income. how much more taxes does snobama and his cohorts wanna squeeze out of me?

[thusspokezara]

All Doctors MUST be forced to see patients covered by the public plan. Otherwise,we are gonna still have a very unequal system of care where the rich get to continue to see their doctors on Park Avenue and the poor have to settle for poor care at places like NYU Hospital. NO MORE FEE FOR SERVICE CARE.

[speakinup22]

Hey idiot - what effect do yo think this will have on our doctor pool ?


They will leave, and no one else will go to med school unless they are compensated for working as hard as they work.


Tried finding a Pediatrician lately ?

[didserve]

Cost My Bush! If the politicians would have taken the money given to AIG and distributed it to the Citizens Tax payers of America everyone could have paid off their mortgage and cars in America!

Billions are spent in the Insurance business that has nothing to do with health care!

America should march on washington and demand better than we are getting from our elected officials!

[speakinup22]

didserve - your last statement is very true.

Our elected officals are garbage.

Clean out all the people that can't be faithful to their spouse. Get rid of the drunks, and those that allowed others to drown in their car. ELIMINATE their health care coverage.

Take Social security out of the general fund.

[jschmidt27]

http://www.ibdeditorials.com/IBDArticles.aspx?secid=1501&status=article&id=332548165656854

The article says if you go for individual private insurance after the bill is passed, you must use the public option. Is that not an attemt to take business away from the private insurers? I know Congress says the public plan will be self funding, but a year down the road when someone complains to a Congressmen that the public plan is too expensive, what will Congress do to win votes? Make the public plan cheaper with more tax dollars. It is inevitable that the private insurers will go under. Them Obama and the Dems can give out the rationed care they wanted to do. The govt monopoly will be secured and they can call the shots. Pelosi and the Dems are lying to the public.

[jsd330]

I read this article and you are 100% correct. Once the bill is passed you won't have a choice. Within a year or two there will be no private health insurance, and you will be stuck with what the government wants to pay for. The CBO already said it was to expensive, but Obama and Pelosi want to ram it through before anybody has a chance to read the 1000 + pages. I'de hate to see whatother suprises are in there. So what happend to Obamas choice and transparent government?

[thusspokezara]

Here is how to make health care reform work.
1. Limit what doctors can charge patients.
2. Limit unnecessary tests.
3. Expensive tests (e.g. MRI's, breast biopsies) must go through a process of review by state agencies
4. Do not reimburse for medical care made necessary by hospital or doctors errors. Make them pay for it.
5. Do not cover expensive brand name medications (e.g.chemotherapies) unless they are superior to generics.
6. Give doctors incentives to practice in undeserved setting such as rural settings.
7. Do not cover medical care for problems that result from poor judgment. For example, if you get drunk and bust your head, you pay for the medical care. Cant' afford it? Then it is deducted from your paycheck.
8. Severely limit coverage for end of life care. Dying is NOT a medical disorder.

[jschmidt27]

Pretty harsh-
1. Doctors have staff to pay-the govt already limits them as do the private insurers.
2. What is an unnecessary test? Who deicides-Obama?
3. So I'm in server pain from possible pancratic disease but I have to wait how long for that beaurucrat to get back from his coffee break or vacation to get the ok for my MRI?
4. I think that is why you can sue.-Of course can you sue the public plan?
5. OK
6. OK
7. Who decides what is poor jusdgement?
8. Guess you must be under 50. Dying is the final medical disorder and can be managed with care. Unreasonable extending of life in the face of major odds against living needs to be looked at but not dictated. Or would you like everyone to have the plug pulled at 80 well or not?
Let Private insurers compete for business. Let business pay into an employee pool and the employee select their coverage. Get rid of the state dept of insurance which add additional cost. Streamline the claims process by using the same claims processing for all insurance companies. Make all records electronic. or alternatively open up the Congressional Medical plan to all people.

[dmwj2]

Also... If we have a Public Plan, we should roll Medicare, Medicaid, Federal, Congressional, and Veterans plans into the single Public Plan... why maintain separate entities?

[cydygitt1]

jschmidt27 replies in typical knee-jerk republiCON fashion:
"What is an unnecessary test? Who deicides?
----------------------

Today the lawyers posing as insurance claim's supervisors make the health care decisions instead of pyhsicians and patients!

[ffoulkes-2009]

I have never been turned down any test or procedure. I have many ailments and injuries, so I need insurance which I pay for through work. I am glad to have it, and have not always had it. Even when I was without insurance and in miserable shape, I did not want state mandated health care.

[pubsrtoast]

This is exactly what happens when you try to maintain profits, shareholder returns and CEO golden parachutes. The whole idea of employer based healthcare provided by for profit corporations is an obscenity.

[chonder2]

Doing this in a rush won't work. They can take enough time to get it right. But I suspect the Healthcare industry will go the same way as Wall Street if there is NO change.Don't you still wonder how very educated financial geniuses couldn't see or stop that collaspe, orDID THEY? Ride the economic system down to the bloody knee caps.Get off and put the thumb out for the Federal bus.

[bjsassy]

"The health care overhauls released to date would increase, not reduce, the burgeoning long-term health costs facing the government", Congressional Budget Office Director Douglas Elmendorf said Thursday.

According to the U.S. Census Bureau, there are 45.65 million uninsured people in this country and that 9.7 million of those are not U.S. citizens. The number of Americans who lack insurance is actually 35.9 million. Will the health plan cover the illegal immigrants in this country? Why are the Democrats quoting the 50 million numbers? Isn't that disingenuous? While 35.9 million uninsured Americans is a very large number of uninsured, there are other interesting statistics. The Employment Policies Institute estimates that there are over 9 million people, with incomes over 75 thousand dollars a year, who voluntarily decline health insurance from their employers. They are usually young and healthy individuals. This is a far cry from 50 million.
Why the rush on the healthcare bill? Is Obama hurrying this bill along while he still has political capital? The huge stimulus bill and the Cap-and-Trade bill were voted on in Congress by members who were not given time to read or debate the bills. Employment is approaching 10% and our economy is in a crisis. Yes, healthcare does need reform, but can't it wait until this country is back on its feet again?

[frankinaz]

"According to the U.S. Census Bureau, there are 45.65 million uninsured people in this country and that 9.7 million of those are not U.S. citizens. Will the health plan cover the illegal immigrants in this country?"
One hopes not-The countries that illegal immigrants (Such as Mexico and others), should take care of their own people, and not be allowed to use the U. S. as their healthcare system. This country has enough of it's own legal citizens to take care of first.