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Posted at 10:42 AM ET, 01/11/2011

The Affordable Care Act in one table

By Ezra Klein

Chapin White, a former CBO analyst, has a good overview (pdf) of the Affordable Care Act's major provisions in the Berkeley Electronic Press. White is more pessimistic than I am on the Independent Medicare Advisory Board, and he's more pessimistic than some researchers are on Accountable Care Organizations (I don't have a strong opinion on ACOs). But his piece is clear and worth reading. It also includes this table, which is a very useful breakdown of where the bill spends, saves and taxes:

wherehealthspendsmoney.jpg

By Ezra Klein  | January 11, 2011; 10:42 AM ET
Categories:  Charts and Graphs, Health Reform  
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Comments

"Reduced provider payment rates"?

How is this different than the doc fix issue?

Posted by: eggnogfool | January 11, 2011 10:56 AM | Report abuse

What is the expected effect of the $110B "tax on insurers and manufacturers"? My guess would be a price increase. Similar effects might be expected from the reduced premiums to private plans.

Overall, the affordable care act is a $500B tax increase. (210+110+70+30+50+20)

The only good part of this bill, in terms of making health care more affordable might be the negotiation of drug prices, but that will probably just make prices higher for others too.

Posted by: staticvars | January 11, 2011 10:57 AM | Report abuse

the $110 billion tax on insurers and manufacturers is a tax increase but it won't reflect here, no? That only reflects on the increase in costs to private plans that doesn't show here.


Good chart but what strikes me the most is the $890 Billion in redistribution from the Medicaid expansion and the subsidies.


Also what's missing? It shows a net $20 billion postive effect on the deficit and it was supposed to be around $120 billion in the first 10 years right? Do those notes reflected below make up that much of the difference? Good that it excludes the new ponzi scheme better known as the CLASS Act.

Posted by: visionbrkr | January 11, 2011 11:09 AM | Report abuse

Great table--too bad the individual numbers don't add up to the given totals.
The total for the given Medicare provisions is -630 billion dollars
The total for the given Coverage and Revenue Provisions is 580 billion dollars

Of course, I don't know whether the totals are wrong or the individual entries are wrong, or there were a few small individual entries that contributed to the totals but have been left off the list. In any case, the table is misleading for not indicating why the numbers don't add up.

Posted by: suehall | January 11, 2011 11:19 AM | Report abuse

@suehall:

the numbers are all rounded to the nearest ten.

Posted by: eggnogfool | January 11, 2011 11:24 AM | Report abuse

well, sure, if you go ahead and lay out the facts it all looks well and good. But what about the death panel fairies, budget-busting sprites, and government takeover wood nymphs? how do these figure into your so-called facts?

Posted by: willows1 | January 11, 2011 11:24 AM | Report abuse

This assumes that cuts actually happen. The CMS Actuary himself says this is improbable.

Posted by: theo2709 | January 11, 2011 12:10 PM | Report abuse

eggnogfool:
" 'Reduced provider payment rates?'
How is this different than the doc fix issue?"

It's not, I don't believe. And since this will never happen (Democrats already postponed these twice last year) like everyone knew when the "CBO" score came out, you can go ahead and strike that $230B from the 'revenue' side.

Also note the "high-risk-pools" buried in the "Miscellaneous" line. The ACA only included $5 billion to cover this item for 4 years. The governments own experts said in May (two months after the ACA was passed) that this will likely cost that much PER YEAR. So that's at least another $15B miss by the CBO 'score'.

You can read more about this item here: http://www.nihcr.org/news_High-RiskPools.html

Note that the link is not to Fox News, the Heritage Foundation, or the Cato Institute. It's to the National Institute for Health Care Reform, which is funded by labor unions and was supportive of the ACA!!!

If you follow their numbers, they estimate that $140 billion could be needed to cover this provision for which the ACA only provided $5 billion. So I'm being generous in only penalizing the numbers Ezra keeps citing by $15billion or so.

So while those like 'willows1' praise Ezra for using 'facts', keep in mind that the 'facts' Ezra clings to are quite subjective and outdated.

Posted by: dbw1 | January 11, 2011 12:18 PM | Report abuse

Now that we have all of the "estimated" effects on the federal budget deficit, perhaps the Obama/Pelosi Regime will release the ACTUAL effect of the PPACA's first year.

As reported by the Washington Post and other media outlets, the Obama/Pelosi Regime has collected -- but has to date refused to release -- both actual spending data and actual participant statistics. Many PPACA groupies had touted all of the new information collection, accomplished at the expense of medical care recipients who pay their own bills, was a panacea which would lead us to lower health care costs and greater benefits for all... yet the Obama/Pelosi Regime won't even let anyone actually SEE the information.

In parallel, an article cited in this morning's Wonkbook reports that "economists" are "surprised" that wages are falling: when we review last year's Ezra Klein blog and comments thereto, we note that the fall in wages was absolutely predictable (and predicted). Wonder what caused the "surprise" among the "economists" loyal to the principles of the Obama/Pelosi Regime??

Perhaps the "economists" and estimators either (a) don't know as much as they might think they know or (b) are simply offering misleading data for political gain.

Posted by: rmgregory | January 11, 2011 12:21 PM | Report abuse

so getting to the heart of those "reduced provider payment rates" that makes up one third of the positive side of the deficit effect. So what are these payment savings actually?

ACO's that are under fire from doctor and hospital groups about the rules governing them?

You see CBO's figures as with anything are great in theory but we don't live in theory do we?

Posted by: visionbrkr | January 11, 2011 12:29 PM | Report abuse

@dbw1:

i'm fairly confident a review would indicate that both Ezra and I were confident the 'high risk pool' would fail. However, #1 it's just temporary and #2 It was a permanent feature of the Republican party's plan in the 2008 election.

On further review, it looks like 'provider reimbursement' here is hospitals/nursing homes. i'm confident that cuts to nursing home reimbursement will be doable, hospitals i'm iffy on.

Posted by: eggnogfool | January 11, 2011 12:44 PM | Report abuse

eggnofool,

i vaguely remmember that hospital's cuts would be pushed back to the end of the decade. Wonder how much is nursing homes and how much is hospitals.

And if nursing homes say are cut substantially enough that a couple years from now people out there realize there are major problems there and legislation is enacted to bring those back to where they are now or greater then wouldn't/shouldn't that reflect on PPACA's TRUE costs?

Posted by: visionbrkr | January 11, 2011 12:57 PM | Report abuse

"Reduced provider payment rates?'
How is this different than the doc fix issue?"..."It's not, I don't believe."

These payment rate reductions are completely unrelated to the doc fix. Which you would know if you actually knew anything about this bill. But, apparently, you do not. Though you still seem to believe you're somehow qualified to comment on CBO's findings. Impressive.

Before you beat up on someone for making up "facts," maybe you should actually know them.

I suggest you go onto sports blogs and comment about how the Yankees will have a terrible season this year because their quarterback, Brent Farve, is embroiled in a scandal. It would be less embarrassing than your activities here.

Posted by: theorajones1 | January 11, 2011 1:11 PM | Report abuse

theora,

ok i get it you're defensive about PPACA. Conservatives (are correctly IMO) stating that these figures are contrived. Data coming out is only as good as data going in.

So instead of insulting him why not answer my question above?

Are these savings ACA's and if so is anyone paying attention to the rules being made up regarding them that doctors are fighting?

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/09/AR2011010903401.html


And while its not the doc fix it is IMAB and we'll see if they make those necessary cuts. If they do great, if they don't I'm sure conservatives will be to blame because you see its never anyone else's fault is it.

Posted by: visionbrkr | January 11, 2011 1:49 PM | Report abuse

theorajones1:

Wow, I didn't know we had a resident expert on the ACA right here on the message boards!

By all means, then....please address why the ACA is going to miss so badly on it's estimated cost of the high-risk pools. I assume it's fair to ask you to address this since you know so much more than I do.

Posted by: dbw1 | January 11, 2011 2:25 PM | Report abuse

theora:

Since you are so much smarter than me, then I'll wait while you lay out how the ACA will reduce the deficit. I assume you can do that with somethin other than just "well, the CBO says so."

You will note my answer was qualified with "I believe", implying I could be wrong...since Ezra's link only included the graph with no description of the line items I assumed it to be related to the 'doc fix' since that was claimed to save about $20 billion/year.

eggnogfool:

You miss the point on the high-risk pools. I wasn't arguing whether they were a good idea, a bad idea, a Democrat idea, or a Republican idea. I'm simply arguing the CBO 'score' of the ACA, which Ezra continues to use as his bible to claim the ACA will reduce deficits, is widely flawed in it's cost estimates.

Posted by: dbw1 | January 11, 2011 2:38 PM | Report abuse

eggnogfool:
"On further review, it looks like 'provider reimbursement' here is hospitals/nursing homes. i'm confident that cuts to nursing home reimbursement will be doable, hospitals i'm iffy on."

Thanks for the clarification. Fair point that it was not the 'doc fix'.

My point of contention, however, with both the doc fix or this $230 billion provider reimbursement reduction is this: progressives always assume they can just cut payments to businesses/providers, and there will be no negative unintentional consequences.

Think about it....if a business has to provide the same service tomorrow that it is providing today, but you tell them you are going to pay them 20% less....what happens? They either have to lay workers off since they have less revenue coming in to pay their staff (effecting the quality of care you are getting), or they will tell you they don't want your business anymore (which many doctors have threatened to do if the doc fix ever happens, which is why politicians keep extending it).

And in the case of the latter, Obama and Democrats will be guilty of breaking yet another promise under the ACA...that you can continue to see whatever provider you see today. Sure you can...as long as your provider doesn't drop you because they refuse to see Medicare patients anymore after the ACA slashes what your provider gets paid to take care of you.

Posted by: dbw1 | January 11, 2011 2:51 PM | Report abuse

dbw1,

oh you're sadly mistaken. These 20% savings are just rich, old, white conservative people so Louis will just have to buy one less island this year for Penelope. So other than the natives working on these islands everything's going to remain the same!! See how simple it is in a liberal's world.

Posted by: visionbrkr | January 11, 2011 3:59 PM | Report abuse

visionbrkr:
"See how simple it is in a liberal's world."

I definitely would love to live in the simplicity of a liberal-progressive world. According to Ezra, this world includes a place where you can raise taxes as much as you want and it will never impact peoples behavoir as far as how much they spend, invest, or how hard they are willing to work. If only I could ever find my way to this dreamy, far-away land....

Posted by: dbw1 | January 11, 2011 7:12 PM | Report abuse

@theorajones:
-------------------------
"These payment rate reductions are completely unrelated to the doc fix. Which you would know if you actually knew anything about this bill. But, apparently, you do not."
-------------------------

Wow. Before you start insulting people you may want to work on your reading comprehension, and maybe learn a few facts yourself. PPACA includes brand new cuts in Medicare reimbursement rates. Similar to what has happened with the "doc fix," many people expect that Congress will not allow these cuts to take place. So when eggnogfool asks how it is different than the doc fix, he is not asking if this savings is coming from the reversal of the SGR cuts (i.e. the commonly known doc fix, which is rightly not included in the score of the bill since it is unrelated), he is asking how this new round of cuts is any different, since Congress has shown no ability to stick to planned cuts in reimbursement rates.

A tip for you: if you're going to be condescending and insulting, you may want to make sure you understand what you're talking about so you don't silly.

Posted by: ab13 | January 11, 2011 8:05 PM | Report abuse

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