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Senate bill would increase health-care spending less steeply than thought, expert says

By Shailagh Murray
A top Medicare official found that the final version of the Senate health-care bill may have the effect of expanding coverage to more uninsured people while not increasing overall health-care spending quite as steeply as previously anticipated.

Democrats had nervously anticipated the report, written by Richard S. Foster, the chief actuary for the Center on Medicare and Medicaid Services, or CMS, which administers the two health-care programs. Foster released several studies late last year raising questions about the fiscal impact of the House and Senate bills.

But his most recent findings offer a somewhat brighter picture, at least of the Senate bill, potentially increasing its stature as House and Senate negotiators craft compromise legislation in the weeks ahead.

Foster found that an additional 34 million U.S. citizens and legal residents would receive health coverage under the revised Senate bill by 2019, compared to the 31 million estimated by the Congressional Budget Office, the nonpartisan agency that conducted the official cost estimate of the Senate bill. The new CMS figure also was higher than the 33 million Americans Foster estimated would eligible for coverage under an earlier Senate version.

But the CMS report estimated that the final Senate bill would cost $882 billion from 2010 to 2019, slightly more than CBO's cost estimate of $871 billion for the same 10-year period. 

According to Foster's model, about 67 percent of individuals who are eligible to purchase coverage over new insurance exchanges, because they do not have access to affordable plans from their employers, would chose to participate in this new marketplace. Among those who elect to remain uninsured, CMS found, many will conclude that the penalties the legislation would impose for not carrying insurance "were not sufficiently large to have a sizable impact on the coverage decision." Those fees would climb to $750 per year for individuals by 2016.

Foster was sharply critical of a new long-term care insurance program in the bill, known as the Community Living Assistance Services and Supports, or CLASS, program. He estimated it would produce a net savings of $38 billion over the first 10 years, but that over the longer term, expenditures would exceed premium receipts. "There is a very serious risk that the program would become unsustainable," Foster wrote.

The CMS report also revised its estimate of the total increase in health spending if the Senate bill becomes law, to .6 percent over 10 years, compared to .7 percent over 10 years, as Foster found in an earlier report. But he found that "the additional demand for health services could be difficult to meet initially with existing health provider resources and could lead to price increases, cost shifting, and/or changes in providers' willingness to treat patients with low reimbursement health coverage," such as Medicaid, which Congress is expected to vastly expand.

As previously expressed by both CMS and CBO, Foster was skeptical of provisions aimed at lowering health-care costs, including numerous changes to Medicare, and the imposition of an excise tax on high-cost health plans, aimed at curtailing the overuse of tax-free employer health benefits. "The proposed reductions...would have a downward impact on future health care cost growth rates," Foster found. But in the short term, he added, "these effects would be outweighed by the increased costs associated with the expansions of health insurance coverage."

By Shailagh Murray  |  January 9, 2010; 2:23 AM ET
Categories:  44 The Obama Presidency , Barack Obama , Health Care  
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Comments

Second COST SAVING TO CONSUMERS: NEW law in Washington...The cancer fondation, the American Heart ass. the American Diabetic, The MS Foundation , the Dental ass. the HEARING-AID, Ass .. ALL the HEALTHCARE FOUNDATION ..have to TREAT the patients for FREE ..

Posted by: sigup | January 11, 2010 11:58 AM | Report abuse

CUT COST in HEALTHCARE: CUT _OUT TV commercial for PILLS THAT KILL....
CHANGE the "LAW " in congress to SUE your DOCTOR or PILLPUSHER"!
FINE the FOODINDUSTRIE for ADD-ONS..and ADD-IN..of Chemicials.
GIVE AMERICA 500% in cREASE in FOODSTAMPS so they can Buy "WHAT the LIKE-not What the USDA ..CANNS! 42 tonnes of CANNED goods collected in detroit..and WE HAVE the "BIGGESTPEOPLE"...Wunder "WHY"? our Goverment "FEEDS"US..or hates"US"
TURN your SWORDS into Plowshares..NOW while you still "can". GO GREEN" NOW send the SENOIR there "10% " increase like you did for the FEDREAL EMPLYOEES and CONGRESS!

Posted by: sigup | January 11, 2010 11:47 AM | Report abuse

NEW HEALTHCARE. MAKES GOV AN ILLEGAL MONOPOLY & PUBLIC STRANDED WITHOUT MEDS INDEFINITELY.....


HEY once again the DEMS & ACLU think USA PUBLIC is too stupid to notice----

IF YOU ARE NOT GETTING THE MEDS & HEALTHCARE you need----then YOU are NOT getting healthcare while they DISGUISE IT by calling it healthcare.

WHAAAT are the DEMS HIDING??---THE LATEST DEBACLE DESTROYS USA SOVEREIGNTY turning the USA INTO A DICTATORSHIP UNDER SHARIA LAW U NATIONS RULE.

WHAAAT are the DEMS HIDING???---THE DEATH PANELS ARE STILL EMBEDDED IN THIS HEALTHCARE.


the DEMS claim PUBLIC WON'T HAVE TO GIVE UP their healthcare...WHAAT ARE THEY HIDING???

THE PUBLIC will BE FORCIBLY KICKED OFF of their HEALTHCARE because the GOV AS AN ILLEGAL MONOPOLY WILL TAX employers and EMPLOYERS WILL KICK OFF THE EMPLOYEE'S OUT OF THEIR HEALTHCARE BECAUSE it's too expensive for employers to handle the FEES & TAXES


DID YOU KNOW AN UNTREATED EAR INFECTION will cause PERMANENT HANDICAPPING & DEATH even MORE SO TO OUR CHILDREN

DIDN YOU KNOW AN UNTREATED ALLERGY ASTHMA will cause PERMANENT HANDICAPPING & DEATH even MORE SO TO OUR CHILDREN/

WELL you can bet the DEMS have KNOWN ALL ALONG AND STILL WILLING TO SELL THE PUBLIC DOWN THE RIVER.

SO....To the present it's only one of the 1 % group of people attempting to destroy our Nation's economic systems.

WHY??? It was said to a WASH DC VIP---that the reason the Socialists think they will win this time and are doing this is because ACLU and their DEMS SLUGS -- they don't think American's are " smart enough" to care to let their fingers do the walking to protect their lands, their CONSTITUTION or their freedoms. The DEMS and ACLU don't think the 99% of American's will be 'smart enough" to CARE about their country, their homes, their small business enough to kick the WASH DC SLUGS out and send them packing by way of Balagovich for NOT doing what is right to protect PUBLIC freedoms and the free enterprise system (ie meaning small business/med business) and rights.

SEEK legal and legislative agencies whom protect our CONSTITUTION & OUR PUBLIC SAFETY


seek legislative and LEGAL action to get SOC HEALTHCARE co-ops & public option & stimulus and bailout kicked out see American center for law and justice OR GOOGLE the problems with socialized health care OR GOOGLE handsoffmyhealth.org OR GOOGLE bigGovhealth.org OR stoptheaclu.com OR Southeastern Legal Foundation OR health science institute OR familysecuritymatters.org or US Justice Foundation or 60plus.org

Posted by: moonstream1 | January 9, 2010 7:23 PM | Report abuse

it's pretty critical to note that what this report says is that healthcare spending will rise .6% per year MORE than if we do nothing. as it stands, without the bill, national health expenditure is projected to be 20% of our GDP by 2017.

what happened to "bending the curve"? it's irresponsible to pass a massive reform package that does not have cost as its foundation. real leadership would insist on a specific goal, something like: NHE less than 15% of GDP by 2016. the congress is now chasing its tail to make healthcare affordable -- higher & higher subsidies to offset rapidly growing costs, all of which have to finance by taxpayers somehow.

Posted by: pete52 | January 9, 2010 1:06 PM | Report abuse

I challenge the Washington Post's editors (or any journalism student interested in a most worthy and interesting endeavor) to find prior examples of when government officials said they would "expand benefits and reduce costs" and then examine how often that has happened. Not that it will change anything in terms of what's taking place with the health care debate - but at least it might give pause to reporters and others.

Jesse Slome
Los Angeles, CA
http://www.aaltci.org

Posted by: jesseslome | January 9, 2010 10:22 AM | Report abuse

Voice your support for new Obama Health care plan at http://www.obamahealthcareplan.org

Posted by: spruill09 | January 9, 2010 4:05 AM | Report abuse

Somebody mentioned Currently, a 60-year-old likely would pay five or six times more for private medical insurance than someone in his twenties but it may not be true always check http://bit.ly/68ShhE for lower price coverages

Posted by: leopetred | January 9, 2010 2:56 AM | Report abuse

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