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The $900 billion mistake

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Barack Obama has not given much in the way of specifics for health-care reform. Few policies have been nonnegotiable and virtually none have been dictated. The exception is a number that was neither nonnegotiable nor dictated, but was received on the Hill as if it was both, and has come to dominate the health-care reform process: $900 billion.

The number sprang from Obama's September speech laying out his own plan on health-care reform. "Add it all up," he said before a joint session of Congress, "and the plan I'm proposing will cost around $900 billion over 10 years." The plan he proposed, however, did not mention the price tag, and the president did not include any specifics about how that price tag was reached. Nor did the president's language actually set a hard ceiling. "Around $900 billion," when you're talking about internal modeling for a plan that the Congressional Budget Office hasn't seen, is not the same thing as a $900 billion limit.

This was not like Bill Clinton waving his pen and promising to veto any bill that did not reach universal coverage. But that's how it was understood on the Hill. "It made things complicated," sighed Rep. George Miller. "We were working off of one track and then we had to switch." The Senate isn't having an easier time of it. Reid's office is waiting for the Congressional Budget Office to return an official score of their health-care reform bill. If it's under $900 billion, they will move forward with it. If it's over $900 billion, they will revise it, and send it back to CBO for a new, and hopefully lower, score.

There are three questions here. The first is how the Obama administration came up with the $900 billion estimate. The second is why they included it in their speech, after so relentlessly avoiding specifics until that moment. And the third is why the Hill embraced it as a hard limit rather than a general proposal.

The answer to the first is a mixture of policy and politics. Health-care reform was embattled. The Gang of Six was breaking apart. There were those in both the White House and the Senate who wanted to radically scale back the ambitions of the bill. Amidst this, members of the White House's policy team managed to model a plan that they considered pretty good and that came in at about $900 billion -- a bit lower than what the House had proposed, but a bit higher than what the Senate Finance Committee was considering. Further, there didn't look to be support for revenues that reached much beyond $900 billion, at least in the Senate. This wasn't a new limit so much as an articulation of a boundary that already existed.

It was, they hoped, something of a political sweet spot. It calmed some moderates by showing that the White House was willing to push back on the ambitions of more liberal members of Congress and pleased some liberals by showing that the White House wasn't letting the chaos of August distract them from the need for an ambitious bill.

But once that number entered the process, it began guiding the process. Sources on the Hill aren't really clear how the sum transformed from an estimate of the president's plan to a hard limit for their plan. Few recall that the original language included the qualifier "around." Even so, the number stuck. It strengthened the hand of moderates in both chambers and allowed them to create a ceiling. It also seemed clear that if the White House was comfortable with $900 billion, then it wasn't going to fight to protect the spending in any bill that exceeded that cap, so there was no point in the liberals bothering to push the issue.

The problem is that the number, which was chosen at a point of political weakness for health-care reform and the Obama administration, is too low. Most experts think you need closer to $1.1 trillion for a truly affordable plan. Limiting yourself to $900 billion ensures that the subsidies won't be quite where you need them to be, and means that virtually every spare dollar has to be spent strengthening them. If you want to add $30 billion to the bill creating coordinated care teams across the country -- a project that could transform chronic care in this country and eventually save many times its start-up cost -- there's little budgetary flexibility even if you could find the revenue, because each dollar is in a zero-sum competition with each other dollar so the entire plan comes in under the limit.

The second problem is that it's not clear what the number includes. Obama's plan, for instance, didn't say a word about the Medicare payment fix, which will cost more than $200 billion, and which many commentators argue should be included in the cost of the plan (I don't agree with them, incidentally). It didn't include specific delivery system reforms. It didn't show its own modeling, so it's hard to say whether the subsidies it envisioned were sufficient, or whether CBO would score the proposal at a higher, or lower, cost.

The reason for this ambiguity is that the limit was never really a limit. It wasn't attached to a plan that was scored by the Congressional Budget Office. It didn't refer to an actual number, or define how big of a boundary was meant by the qualifier "around." It didn't specify what it included. But to the detriment of the bill, it has become a hard ceiling, reducing both the potential affordability of the legislation and the flexibility of Congress to add delivery system reforms that could save money or improve health in the long run. For that reason, Congress should go back to Obama's original speech and follow the president's original lead. A process working towards a bill that's "around $900 billion" is a lot better than a process that's arbitrarily decided to produce a bill under $900 billion.

Photo credit: By Richard A. Lipski/The Washington Post

By Ezra Klein  |  November 11, 2009; 12:14 PM ET
Categories:  Health Reform  
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Comments

Hardly surprising. They low-balled the stimpak: Joe Stiglitz was calling for $1T, Christine Romer I think came up with at least $1.2T and Paul Krugman concluded it was "a plan that falls well short of what advocates of strong stimulus were hoping for — and it seems as if that was done in order to win Republican votes."

And history is now repeating itself with health care reform.

Posted by: cab91 | November 11, 2009 12:32 PM | Report abuse

Ah...but...

The actual cost over the 10 years will depend on the actual premium subsidy amounts, which will depend on...

yep, which will depend on how and to what extent efforts, public and private, are made to "bend the curve."

One easy way to get there is: make the legislative language about the pilot programs in Medicare specify that the pilot programs' objective are to begin a transition to paying for "Quality" (payments that are better for better outcomes, and less for less good outcomes). And that this transistion happen in a specified time period.

In other words, the pilot programs are to be like test rockets in the 1960s: aimed for a specific outcome in a specific time: put a man on the moon by the end of this decade.

Here the specific would be something like: Transistion Medicare 100% onto a pay-for-Quality system within 7 years.

Posted by: HalHorvath | November 11, 2009 12:38 PM | Report abuse

To clarify the above comment: Medicare is quite important to the total national health care spending, since private insurers follow Medicare's cost-reduction innovations.

I have a specific way to incrementally move to paying for Quality.

Incremental, low-risk, small changes, easy politically.

http://findingourdream.blogspot.com/2009/11/bend-cost-curve-with-easy-incremental.html

Posted by: HalHorvath | November 11, 2009 12:42 PM | Report abuse

...the Medicare payment fix, which will cost more than $200 billion, and which many commentators argue should be included in the cost of the plan (I don't agree with them, incidentally)

Isn't medicare part of the healthcare system? What reason do you have to say that it should not be included?

And if Congress cannot summon the will to make this difficult decision, how in the world do you think they will have the nads to make these decisions later?

Posted by: jeffreid1 | November 11, 2009 12:49 PM | Report abuse


Per the Citizens for Tax Justice, the Bush Tax cuts cost 2 1/2 times what health care reform costs.

I'm no insider, but I'd reckon the Bush tax cuts shouldn't go buying any green bananas...

Makes me somewhat less nervous about low-subsidies coming out of the final product.

Posted by: ThomasEN | November 11, 2009 12:59 PM | Report abuse

I assume Obama has been so vague with details because he's trying to adhere to the separation of powers as proscribed by the US Constitution. The Executive Branch doesn't craft legislation, but he can describe criteria for what he'd sign into law. In other words, he sets the goal, but doesn't tell Congress details of how to design a solution that meets that goal.

The problem is that this generation's Congress is a lot more interested in reelection than leadership. They looked desperately for details in the President's speech that they could use as constraints on their legislation.

This way they have an answer to the many interest groups who will want their piece of the pie and have a strong case for how much value they will return if given funding (like the coordinated care teams you mentioned). A good way to say "no" to these groups is to tell them that your hands are tied because the budget has been given a hard ceiling.

Posted by: billkarwin | November 11, 2009 1:05 PM | Report abuse

Why not include the $200 billion medicare fix?

Well it is the difference in scoring under 'current policy' or under 'current law'. If we look at past policy Congress has consistently stepped in and avoided the mandated cut in physicians' pay on a year by year basis. If you reasonably conclude that they will do the same in future years as they have in past years then it doesn't make much sense to continue to include those projected cuts as part of the budget baseline. On the other hand CBO is mandated to follow current law and so dutifully includes what all agree are cuts that never will be allowed in their baseline.

So what Congress is proposing is to codify current policy into current law and thereby changing the current baseline to match. At which point they will score future budget changes as a result of health care reform against the new more realistic baseline.

The argument for not including totally theoretical savings from physicians cuts in a hard budget score is at base the same for actually adding in the costs of war in Iraq and Afghanistan in that score rather than funding them with off-budget supplementals. Health Care and war costs will be what they will and the best way to judge that is current policy plus projected policy changes and not some pretty artificial 'current law' standard.

Posted by: BruceWebb | November 11, 2009 1:11 PM | Report abuse

This plan is projected to cost $900 billion instead of $1 trillion for the same reason you pay 99 cents instead of a buck at the corner store. It's all smoke and mirrors, folks. This bill is a massive giveaway to the health care industry. The American public will have many years to regret the fact that this bill was ever passed, as we stare into our empty wallets...

Posted by: jerkhoff | November 11, 2009 1:14 PM | Report abuse

its amazing to me. Is it a mistake, YES. But not for the reasons Ezra gives. Its not a mistake because the subsidies aren't enough. its a mistake because it doesn't reduce the costs. It doesn't bend the curve. I'm watching now on cspan a lovely bipartisan panel from the Budget committee yesterday. Conrad, Warner, Voinovich, Gregg, Liebermann as well as many Democrats and Republicans from the House. The gist of the discussion. Raising the debt limit but forcing themselves (BECAUSE THEY KNOW THEY WON'T DO IT OTHERWISE) to take out of their hands a concrete plan to reduce the debt. You know what struck me that should strike fear in the liberals out there. In 10 years at the current rate our payments on debt would be $800 BILLION PER YEAR. so much for pet projects like Medicare spending, education, construction, defense spending etc. When all our monies are used to pay interest on the debt we'll be a slave nation to China, Japan et al.


Ezra,

you have a budget, no? You said before that you really haven't had credit before you owned your home. Why should the country not have the same type of budget that you have? That I have? That cities have? That states have?

Posted by: visionbrkr | November 11, 2009 1:26 PM | Report abuse

Let's not forget this bill takes in 10 years of payments and returns only 6 years of benefits! Another inconvenient truth!!!!

Posted by: Jimbo77 | November 11, 2009 1:34 PM | Report abuse

billkarwin: "The Executive Branch doesn't craft legislation."

It's done all the time. I worked in an Agency where specific legislation, including the cost/savings estimates, was developed every year. It's up to someone in Congress to submit the bills for consideration, but every agency has a legislative drafting office.

Posted by: capsfan77 | November 11, 2009 1:45 PM | Report abuse

I don't think this is that surprising given that Obama has reinforced the fiscal prudence theme throughout his campaign and Presidency. No one in Congress wants to appear as though they are fiscally imprudent even though they are in fact being more fiscally prudent if they took a 20 year time frame rather than a 10 year time frame.

Obama and his Administration don't quite think in soundbites...they are too smart for that...but they lack originality and a big picture view of policy because they want to keep on re-iterating some touchstone ideas that seem commonsensical to pols in Washington and swaths of the American people. Some of these ideas are true, some half-true and some false.

They have staked out for themselves the following values for themselves that form something of a Bermuda quadrangle:

1) fiscal prudence
2) reform on the issues that matter to your base but start cautiously
3) anger only your (left) base...no one else
4) clever politics can substitute for good policy

Congress is invited to play within this quadrangle but if they leave it they will be facing vetos, ostracism, etc.

Posted by: michaelterra | November 11, 2009 2:12 PM | Report abuse

Jimbo77: Let's not forget this bill takes in 10 years of payments and returns only 6 years of benefits! Another inconvenient truth!!!!

Amen. The cost estimates are fraudulent. A proper accounting would look at the costs in the first decade after the reforms had been fully implemented. CBO, through no fault of its own, has to answer the question it has been asked and take the authors' stipulations as givens, with no thought to practicalities or political reality.

And, anyway, the CBO's projections should be taken with buckets of salt. Government actuaries didn't forecast that Medicare would run up a $37 trillion unfunded liability but that's what we find today.

Posted by: tbass1 | November 11, 2009 2:13 PM | Report abuse

jimbo wrote>>>Let's not forget this bill takes in 10 years of payments and returns only 6 years of benefits! Another inconvenient truth!!!!

That's not true! The House bill timeline for implementation of benefits begins in 2010....
http://www.politico.com/static/PPM41_hcr_timeline.html

Why does Faux News spin LIES?

Posted by: angie12106 | November 11, 2009 2:24 PM | Report abuse

If the 30 billion for coordinating healthcare teams across the country is such a good idea and has so much potential for longterm good then why would it have to be passed inside of this massive bohemoth of a bill? Just pass it separately and let republicans fight over something that makes them look ridiculous.

Posted by: spotatl | November 11, 2009 2:32 PM | Report abuse

The President didn't come out with more specifics on his healthcare plan not because he had some lawyerly respect for separation of powers, but because he was taking an anti-Clinton approach: let's let Congress do it and take the heat for getting it wrong. And changing his position on the individual mandate from his campaign stance would be called flip-flopping by most people. It's reflective of his general wishy-washy management style.

Angie12106: The timeline you posted was not reflective of the final bill passed by the House, but of a prior version as of Oct. 29. Accuracy is a good thing, I agree.

Nevertheless, even on the outdated timeline you referred to, it is evident that very limited things in terms of new coverage happen in in 2010, and that the bulk of the insurance reforms, the Exchange and the public plan all begin in 2013. Most reasonable people would agree that the major coverage provisions in the House bill do not begin until 2013, and that the CBO score reflects 10 years of payments and only about 6 years of benefits.

Posted by: Policywonk14 | November 11, 2009 2:52 PM | Report abuse


Sounds like Ezra Klein
doesn't really know what's going on...

in either chamber and certainly not at the WH.

Why doesn't he just say so? Or apologize

for the phony, wrong stuff he's put out so far.

Another Washington Post writer with no clue and a big agenda. That's all.

Posted by: whistling | November 11, 2009 3:00 PM | Report abuse

So Obama's healthcare bill is a 900 Billion Dollar mistake?.....

The 1.2 Trillion dollars bleed from the US Treasury in 2002 & 2003 for tax cuts to the richest 1% of Americans wasn't a mistake?

The 780 Billion dollars funding a war in which we attacked the wrong country (Iraq) wasn't a mistake. Hint: No 9/11 link !!!

And the first 787 Billion dollars Bush gave to Wall Street in Oct. 2008 without any strings wasn't a mistake?

BUT... spending 900 Billion over a ten year period to provide affordable healthcare to 50 Million Americans and protect the rest of us from unscrupulous healthcare insurance company practices is a mistake? Really !!!!???

Posted by: logcabin1836 | November 11, 2009 3:03 PM | Report abuse

Sounds like a good deal in comparison to the 700 billion dollar gift given to bankers that they sat on or retired with.

At least the 900 billion gets millions of Americans something, 10 years of health care.

Posted by: nurashnulwld | November 11, 2009 3:04 PM | Report abuse

The non-federal share of MEDICAID and other health related programs is in great jeopardy:

"By JUDY LIN, Associated Press Writer – 1 hr 48 mins ago

SACRAMENTO, Calif. – California's ongoing fiscal crisis has attracted national attention, but a study warns that nine other states are barreling toward similar economic disaster.
A report released Wednesday by the Pew Center on the States says Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin also are at risk of fiscal calamity.

That could mean higher taxes, more layoffs of government employees, increasingly crowded classrooms and fewer services in states that account for more than one-third of America's population and economic output.

Most of the states face rising unemployment and high home foreclosure rates, and their revenues have dropped by double-digit percentages.

The analysis urges lawmakers and governors to take quick action to prevent economic catastrophe."

Add the cost of bailing out these and other states, like MAINE which has had nearly a year of revenue shortfalls between $20m and $30m; and you begin to realize how much OBAMACARE is really going to cost!

Posted by: Common_Cents1 | November 11, 2009 3:07 PM | Report abuse

joe wilson said it best YOU LIE OBAMA!

Posted by: Doug67 | November 11, 2009 3:09 PM | Report abuse

Most experts think you need closer to $1.1 trillion for a truly affordable plan.
********************************************
My guess is that the sheer irony of this statement will be lost on many here.

Posted by: websterr1 | November 11, 2009 3:14 PM | Report abuse

Do you really think that the Progressive, Socialist, Marxist, Liberal Democrats are concerned by the cost or real Health Care reform.

Once passed they can tweak it to achieve their desired results to get Socialized Medicine and abortions covered in the big plan.

If this plan was any good there wouldn't be a need to arm twist, bribe and threaten the Democrats to pass the Power Grab Bill!

The hell with how much it costs.

The taxpayers be dammed!

Posted by: Acornisascam | November 11, 2009 3:15 PM | Report abuse

The best way to find the money to pay for the health plan is to require all members of the government, from the lowest paid staffer to the president himself to be a part of the plan.
They are 100% exempt. They refuse to use a plan which they feel is 'best for the public". This is just like Social Security - which they also do not contribute to in any way and do not have to use. Congress receives 100% of their salary after they retire and they do not pay one penny into any retirement plan. The general public receives Social Security which they pay into at a rate that is higher than they would have to pay into a private plan and get the same benefit and that deduction is only getting bigger (another tax increase on the middle class - another broken promise) Obama promised in his campaign that he would not sign onto any plan that he and members of Congress did not use. Let's see him keep that promise.

Posted by: tenshi1 | November 11, 2009 3:36 PM | Report abuse

It appears to be possible to pass an health care bill that substantially improves insurance availability for those who have to buy their own insurance and that substantially extends subsidies to cover a significant number of the currently uninsured. It is also probably possible to include the concept of states experimenting with the public option if they want to. Those on the left will have to decide whether they want this bill or whether they prefer to continue playing with themselves.

Posted by: dnjake | November 11, 2009 3:48 PM | Report abuse

Wow... great long comments.. Good for government.

BUT THE ONLY WAY TO KEEP COSTS DOWN IS TO DIE QUICKLY!!!!!

Posted by: robinhood2 | November 11, 2009 3:49 PM | Report abuse

Do you really think that the Progressive, Socialist, Marxist, Liberal Democrats are concerned by the cost or real Health Care reform.
========================

I cannot speak for them..neither can you..

But you and your Neocon Limbo Controlled Republicants sure the hell DON"T..!!

ISA

Posted by: Issa1 | November 11, 2009 3:50 PM | Report abuse

really angie?

Pre-ex is SHORTENED, not ended. They lowered the doughnut hole by $500. What is it now? $2700 I believe. WOW that's great progress. It allows people to stay on COBRA until the exchange is open which is nice and all but WHOSE PAYING FOR THE EXTENSION??? They're not giving the 65% anymore starting the end of this month for anyone laid off in early 2009. Those people are in the next week or two getting bills for premium notices that will most certainly not be able to be paid. You know Ceridian did a little study that I saw that said that with the ARRA subsidy of 65% of the cost COBRA participation went up from 12% to 17%. A pretty small increase considering the amount of money we were talking about.

The subsidies and the exchange aren't opened until 2013 (IF YOU"RE LUCKY). No affordability credits until then too.

So basically while you disagree with Jimbo's political ideology he's pretty much spot on.

How bout we gaze into the crystal ball 20 years from now and see how it worked out? I'll betcha costs are still skyrocketing because they're doing NOTHING basically to reduce that.

Posted by: visionbrkr | November 11, 2009 3:50 PM | Report abuse

Like Mr. Klein, I believe that the medicare Dr. fix does not belong in the health care bill. However, I believe that the $400 billion medicare fraud and waste funding do not belong in the health care bill. These two items should be bundled in a separate bill and offset against each other. Find the fraud and waste and then pay the Doctors. A good deal of the fraud and waste is Doctor over billing. This would be a revenue neutral bill.

But that would leave a $400 billion hole in the Democrats health care bill. This would then leave a $400 billion hole in the health care bill. I wonder if Mr. Klein agrees with that.

Posted by: tomhamand | November 11, 2009 3:52 PM | Report abuse

oh crap. someone put this on the front page.

Posted by: visionbrkr | November 11, 2009 3:52 PM | Report abuse

Like Mr. Klein, I believe that the medicare Dr. fix does not belong in the health care bill. However, I believe that the $400 billion medicare fraud and waste funding do not belong in the health care bill. These two items should be bundled in a separate bill and offset against each other. Find the fraud and waste and then pay the Doctors. A good deal of the fraud and waste is Doctor over billing. This would be a revenue neutral bill.

But that would leave a $400 billion hole in the Democrats health care bill. This would then leave a $400 billion hole in the health care bill. I wonder if Mr. Klein agrees with that.

Posted by: tomhamand | November 11, 2009 3:52 PM | Report abuse

The real problem:

How do people in the White House and Congress make estimations ten years from now, when nobody can seriously make economic forecasts about next month?

The U.S. dollar has lost 10 percent of its value this year. What will happen the next ten years? Nobody knows.

Posted by: tropicalfolk | November 11, 2009 3:54 PM | Report abuse

How many new employees will be on the government dole if the 111 new Federal Bureaucracies deemed necessary under this plan are implemented? How much red tape? What special interest groups will benefit from the grants being given in order to train emplyees?

If one thinks the graft and corruption is rampant in Medicare, can you just imagine what will happen with this monstrosity? Organizations like ACORN, APOLLO, and the SEIU must be standing in the wings salivating, giddy with anticipation.

Posted by: inmanorj | November 11, 2009 3:57 PM | Report abuse

Mr. Klein - this is a case study in overanalysis. You seem to dig for some catch-22 but come up empty-handed. Why did you even write this?

Posted by: ScottChallenger | November 11, 2009 3:58 PM | Report abuse

Like Mr. Klein, I believe that the medicare Dr. fix does not belong in the health care bill. However, I believe that the $400 billion medicare fraud and waste funding do not belong in the health care bill. These two items should be bundled in a separate bill and offset against each other. Find the fraud and waste and then pay the Doctors. A good deal of the fraud and waste is Doctor over billing. This would be a revenue neutral bill.

But that would leave a $400 billion hole in the Democrats health care bill. This would then leave a $400 billion hole in the health care bill. I wonder if Mr. Klein agrees with that.
======================

The $400BB from Medicare was not savings from preventing fraud, it was a "savings" created by eliminating the Medicare Advantage program that is used by nearly 50% of the Medicare recipients. This "savings" would result in Medicare recipients having to pay an additional $250 to $300 monthly simply to retain the same level of service they currently receive. Considering that the current Medicare recipients have been paying into Medicare every pay period since 1965, that is 44 years, cutting their benefits so that the Democrats can use the money for other purposes is criminal.

Posted by: mike85 | November 11, 2009 4:01 PM | Report abuse

inmanorj,


not only that but those federal employees that will be added, will they be the kind like we got from the stimulus that cost about $500k per job (some of them??) Something tells me private industry could stimulate jobs (specifically small business) on a much larger scale using a much SMALLER budget.

Posted by: visionbrkr | November 11, 2009 4:14 PM | Report abuse

During the 1930's the Republicans fought FDR and his new "socialist" plan called Social Security.....

During the 1960's the Republicans fought LBJ and his new "socialist" plan called Medicare....

Now the Republicans are fighting Obama's new "socialist" plan for Universal Healthcare For All Americans.....

Social Security, Medicare, and Healthcare....all "socialist" government run programs! The Republicans were wrong in the 1930's, the 1960's, and again in 2009. Who would now dream of saying no to their social security check or their medicare?......The answer...no one.
Godspeed President Obama, your cause is just.

Posted by: logcabin1836 | November 11, 2009 4:15 PM | Report abuse

Anyone who thinks there is a significant difference between a government 10 year estimate of $900 billion and $1.2 trillion is on happy drugs. Either number is political bs. Obama's plan actually says "Won’t add a dime to the deficit and is paid for upfront." What happened to that? If I estimate $10 trillion for the House bill I bet I would end up being closer then the CBO. Luckily for us, it will never become a law so we will never know how horrible for the economy it could have been.

Posted by: jazbond007 | November 11, 2009 4:27 PM | Report abuse

Is Congress subject to whatever they sign into law? Or do they get another HC Plan that is not available to the rest of us Pigs? After all, aren't all Pigs equal?

Posted by: TheDubb | November 11, 2009 4:27 PM | Report abuse

Mr. Klein I noticed you forgot to report Bush gave Iraq 1 Trillion dollars and told them they didn't have to pay it back to the taxpayers. Yes remember the 4 Trillion Bush/Cheney gave to bribes, pay offs, black mail and other corrupt activity during the 8 year crime wave. I see you have a big problem with Americans getting help with their own money but see no problem giving it away. We learned Afghanistan President Karzai and his brother are paid by US and the Taliban until President Obama put a stop to it on Jan. 20, 2009 12 noon.

Posted by: qqbDEyZW | November 11, 2009 4:31 PM | Report abuse

You institute reform to fix a problem, not make it worse.

The number one problem is health care in America accounts for over 17 percent of our GNP. If you are a capitalist, then you know that money is not available for other parts fo the economy. If the rest of the industrialized world were paying this, it wouldn't be a problem. The problem is they are paying nearly half that amount with systems costing between 9 and 11 percent.

This "reform" adds costs, it doesn't solve the problem. Our current system is already paying the costs. Doctors and hospitals aren't losing money. The costs are passed onto insureds and taxpayers. We are paying the full bill now. Reform must lower our costs, and our overall costs.

Then there is the moral side of the equation. These other industrialized people are in better health. Everyone is covered. Those willing to buy private insurance are able to pay for elective surgeries, have better room when hospitalized, etc. Because it is a complete/universal system, everyone contributes based on ability to pay, taxes. Not unlike what we have in that regard. The big difference, though is results. The focus, since everyone has to pay, is prevention of illness, public health and wellness. The American model is focused almost exclusively on treatment.

The universal system also benefits individual entrepeneurs and small business, eliminating a huge expense in obtaining the best people.

Unfortunately, single payer was not on the table. Also unfortunate is the fact that the biggest cost driver in the last 20 years wasn't on the table... the Wall Street factor. Since HMOs have gone from non-profit in the late 70's and early 80's to stock companies, their Medical Loss Ratios have dropped from 0.94 to 0.81 (and are still falling). What the MLR means is that in 1980 HMOs were on average paying out 94 cents on the dollar in benefits, payments for health care. Only six cents was going to cover expenses, salary, and other overhead and liabilities. Now, HMOs are taking 20 cents out of every dollar to pay off the hedge funds and for over-the-top compensation packages.

The least this reform could have done is addressed the sick greed factor. As a civilized society we need to end the death panels (insurance companies profit when they deny claims), and take away the "profit" for hedgefunds and investors off the backs of sick people. Greed has no place in the health care equation when it is to everyone's advantage to have a healthy citizenry.

Posted by: wayoffbaseguy | November 11, 2009 5:03 PM | Report abuse

By Judy Lin ASSOCIATED PRESS

SACRAMENTO, Calif. -- A study released Wednesday warns that nine states are barreling toward an economic disaster similar to California's ongoing fiscal crisis, which has been marked by IOUs and budget-busting deficits.

The budget woes could mean higher taxes, accelerated layoffs of government employees, more crowded classrooms and fewer services in the coming year for some of the nation's most populous states.

Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin join California as those most at risk of fiscal calamity, according to the report by the Pew Center on the States.

Double-digit budget gaps, rising unemployment, high home-foreclosure rates and built-in budget constraints are the key reasons.

==========================================

See what happens when you vote democrat?

Posted by: charlietuna666 | November 11, 2009 5:09 PM | Report abuse

the president has NO plan. Therefore HIS $900 billion number is fictitious. How can you have a cost for a plan that does NOT exist. If it does exist, I'd like to see a copy of it.

Posted by: timrrrr | November 11, 2009 5:26 PM | Report abuse

Let's bury the lousy, turkey, Health Care IRS Bonanaza before Thanksgiving.

Posted by: peterroach | November 11, 2009 5:32 PM | Report abuse

This posting might help some on the left understand why we independents and those on the right can't stand this Bill (what a great double entendre for such a POS we'll be paying for much, much longer than the 10 year costing horizon OMB is using).

The author states: Obama's plan, for instance, didn't say a word about the Medicare payment fix, which will cost more than $200 billion, and which many commentators argue should be included in the cost of the plan (I don't agree with them, incidentally).

As I recall, the Bill is bandied about as representing Health Care Reform, not Reform of a few, certain aspects of healthcare and leaving others to be paid for later once y'all realize we pulled the wool over your eyes with the bargain-basement price tag of $900B. Americans could rightly assume that Congress meant what it said, was doing what it said it was, and delivered a Bill that got the job done, not merely started to work on the deal.

In the Private Sector, this would be called out as Bait and Switch, and the FTC would slam anyone who tried to get away with it. I'm guessing Holder et. al. will be okay with whatever gets through the Senate regardless of whether it would be considered a crime if a Company tried to get away with it.

And in this case, "getting away with it" means doing so until the next election and the big one after that. Stay tuned. It could get loud and ugly before ti gets louder and uglier.

Posted by: dbsinOakRidge | November 11, 2009 5:35 PM | Report abuse

Obviously, neither Obama nor Bill Clinton has any idea what is in the House healthcare "reform" bill, except for what they read on a one-page summary. Obama painted himself into a corner: he loses unless a bill passes, any bill. So he just wants something to pass. Same with stimulus: he had no idea as to the specifics of the bill. He just wanted something to pass so he could say he had done something. Look what a disaster that has turned out to be.

Posted by: farpq | November 11, 2009 5:43 PM | Report abuse

ThomasEN writes- Per the Citizens for Tax Justice, the Bush Tax cuts cost 2 1/2 times what health care reform costs.

I'm no insider, but I'd reckon the Bush tax cuts shouldn't go buying any green bananas...

Makes me somewhat less nervous about low-subsidies coming out of the final product.
-------------------------
Anytime I see the phrase "Social Justice" or "Tax Justice," I have to wonder. I really have to wonder if this is going to count as "creating jobs," with a new welfare program?

Currently, tax revenues (Fed, state, and local) are off by about 40% from the Bush Administration.

it makes me wonder, where the money is going to come from, with the decline in tax revenue. Raising taxes or making demands on citizens, isn't going to cut it.

There isn't enough money to support such a social program.

Someone has to pay for subsidizations and free rides and the reality is, the Public Option is a non-starter.

The "Party of No" has proposed (among other items):

1. High deductible private policies / pools for people who are uninsured.
2. Favorable tax treatment for the payment of health care premiums.
3. Am assigned-risk pool for those who have pre-existing conditions.


I and a lot of workers, as part of our compensation is the fringe benefit of health insurance. Why should the government give losers, who are able to work, $10k for health insurance, when they can get off their collective a55es and get a job.

It's bad enough I am paying for my family's insurance, why should I take a pay-cut, pay income tax on my health insurance and pay for someone else's laziness?

Is it because I am white, privileged and entitled?

Posted by: Computer_Forensics_Expert_Computer_Expert_Witness | November 11, 2009 5:47 PM | Report abuse

Interesting that most people who disputed Obama's cost estimate have thrown around figures from another planet. One deluded Fox "News" type actually said $24 Trillion without laughing.

Posted by: revbookburn | November 11, 2009 6:07 PM | Report abuse

For God's sake, this country spends more than that every year for the military, illegal wars like Iraq, and on and on...frankly this kind of talk makes it even more embarassing.

Posted by: lwps | November 11, 2009 6:16 PM | Report abuse

when medicare was started in 1965 the cost was projected at many ,many ,many billions
less than we are seeing today ! it really
does not matter what figures they throw at us today ........fact is big goverment cannot manage what programs we have, much less this so called health care reform !
we need HEALTH CARE REFORM not socialized medicine !

Posted by: cmt138 | November 11, 2009 6:17 PM | Report abuse

Why is it that noone includes the cost to the States as they are primary underwriters of the increased Medicaid costs.

Posted by: rhino2 | November 11, 2009 6:40 PM | Report abuse

I live out west which was settled by good and bad people. The west was setteld by strong people who took care of themselves. Now we have people settling on how the government can take care of them. I wonder how the pioneering of the west would have gone with todays americans? My guess is it would have failed. We have an inability to take care of ourselves in this country. We continually look for others to provide for us. No pride. Only hands stretched out looking for hand outs. Im sad for us.

Posted by: fireski70 | November 11, 2009 6:50 PM | Report abuse

YOU mean the $23.7 TRILLION Dollar Mistake! $23.7 TRILLION,- or $23.7,000,000,000,000 !! da!? -This will be released soon by Independent over-see-er BAROFSKY!! --- and about the DODD/FED CRAP:- LORD,- do these Bankster-Buddies in CONGRESS expect the American People to believe this CRAP?! We voted for OBAMA, - the better of 2 evils! CONGRESS has become controled by a One-2-party system!? Get it? No matter which way we vote, the same behind the scenes Crooks run the show! This 1,000+ page so-called FED Reform came from the British Central Bank. The Globalist BANKSTERS know that We-the-People know about their' Economic Rape of America!! So they take the same $Scheme that they have implemented in England,- and send it to 'yankee-doodle-DODD', and tell Him what to do & say!! Now the $GAME BEGINS! DA! CONGRESS will play themselves against each other as usual, - and get the Citizens to argue, fuss, and fight among themselves,- not even realizing that No matter how or what We say, - that they, the Globalist Elite will still Run-the-Show here in America's BANK/MONEY $Steal-arama!! So whether You are Democrat, Republican, or Independent,- you will again be CONNED into another B.S. Swindle!! -- ENOUGH of this "CRAPola"!! No changes, or revamps of the anti-American FED, - Citizens, just do what is RIGHT!! -- REPEAL hte Criminal FEDERAL RESERVE ACT!!! - ABOLISH FRACTIONAL RESERVE BANKING!! - And send these Criminal Globalist Banksters back to Europe where they came from in 1913 to take-over & destroy AMERICA,-- and 'Without-Firing-a-Shot'!! - "Wake-Up Patriot Citizens"!! - CONGRESS is almost 60-70% in bed with these TRAITORS!!!-- Term-Limits NOW!! - And 3rd parties get over the teeny-weeny little differences, - and UNITE!!! - Time is not on Our side, - and Our great REPUBLIC is being attacked by Bankster TERRORISTS!! - jward52

Posted by: jward52 | November 11, 2009 7:21 PM | Report abuse

I guess they figured that people would freak out if the cost was over a trillion and there was no way to pay for it.

Posted by: postfan1 | November 11, 2009 7:24 PM | Report abuse

"Most experts think you need closer to $1.1 trillion for a truly affordable plan."

Most experts think you need to make health care less expensive in order to make it more affordable. However, like a politician, Ezra wants to take his painful medicine of benefit cuts tomorrow and borrow from China today.

Has anyone read the "Innovator's Prescription?" It's an enlightening perspective on how we're going the wrong way with this sham reform, and how "true" reform could help everyone. The things that make care cheaper are incentives for consumers to choose higher value options. I'd gladly pay $50 out of my HSA to get a prescription from an LNP at CVS than pay $180 to go to the MDs private office and have someone take my temperature.

Posted by: staticvars | November 11, 2009 7:59 PM | Report abuse

Has anyone else noticed that Pelosi, Reid and POTUS MaoBama, aka "The Liar in Chief" seem to want all of the POWER but NONE of the RESPONSIBILITY ???

Posted by: thgirbla | November 11, 2009 8:14 PM | Report abuse

The money they want from tax payers, up front, will be spent by the time the bill goes into effect in 2013. Congress and Obama will have spent it on pork and other programs the same way they spent all the savings we had for social security -- its broke.

Doctors already have signs in some offices saying "Taking no new patients." If this health care bill is passed they all will be hanging out signs while millions upon millions are going to wonder where they can find a doctor.

Kill the bill and save America.

Posted by: 45upnorth | November 11, 2009 8:21 PM | Report abuse

revbookburn: "Interesting that most people who disputed Obama's cost estimate have thrown around figures from another planet. One deluded Fox "News" type actually said $24 Trillion without laughing."

The reference was to Medicare's unfunded liability - which amounted to, by one estimate, $34 *trillion* in FY 2007. From Wikipedia:

Financial viability

Richard W. Fisher, President of the Federal Reserve Bank of Dallas has remarked that in order to "cover the unfunded liability" for the Medicare program today over an infinite time horizon, "you would be stuck with an $85.6 trillion bill" which is "more than six times the annual output of the entire U.S. economy", and noted that "Medicare was a pay-as-you-go program from the very beginning."[43]

The present value of unfunded obligations under all parts of Medicare during FY 2007 over a 75-year forecast horizon is approximately $34.0 trillion. In other words, this amount would have to be set aside today such that the principal and interest would cover the shortfall over the next 75 years.[44]

http://en.wikipedia.org/wiki/Medicare_(United_States)

As with Medicare, the relevant period over which the costs of this bill ought be estimated is not merely the initial 10 years, especially since there is a mismatch between revenue and cost in these bills - namely, the most expensive benefits are backloaded into the out-years while the taxes start up right away.

Posted by: tbass1 | November 11, 2009 8:25 PM | Report abuse

Just how many U.S. House members even bothered to read the 1990-page health care bill before they cast 'yes' votes this past Saturday evening?
It becomes a valid and haunting question because House Rules Committee Chair Louise Slaughter (D-NY) admitted at a closed-door victory celebration thrown by House Democrats immediately after the vote that, indeed, she had NOT read the bill!
SEE:
http://berkshireeagle.blogspot.com/2009/11/louise-slaughter-powerful-house.html

Posted by: GMHeller | November 11, 2009 8:37 PM | Report abuse

Nevertheless, it does show what a little presidential leadership might have accomplished. Too bad the only thing he led on was something stupid.

Posted by: pj_camp | November 12, 2009 8:46 AM | Report abuse

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