Just before the House passed the healthcare reform bill, Speaker Nancy Pelosi infamously remarked that “We have to pass the bill so you can find out what’s in it.” It’s been nearly six weeks now and we’re finding out that what’s in it isn’t necessarily good for health care.
First of all, we’re finding that medical costs will rise nationwide. According to a report from the federal agency that administers Medicare and Medicaid, national health expenditures will increase by $311 billion over ten years because of the new law. There was lots of talk during the debate over health care reform about “bending the cost curve.” Unfortunately, the bill appears to have bent the cost curve up instead of down.
This same report indicated that individuals who purchase health insurance on their own can expect to pay an additional $2,100 a year. The individual market was already pricing out many consumers, but now costs will rise even faster. For now, individuals can choose to drop coverage and pay for medical costs out of pocket. In the future, all Americans will have to purchase insurance or face IRS penalties.
Premiums are not the only area where expenses are projected to rise. Because of new taxes and fees on prescription drugs and medical devices, the agency report states that costs would be “passed through to health consumers.”
Throughout the debate, President Obama insisted that Americans who like their coverage would get to keep it. Just weeks after the law went into effect, it’s already apparent that this was empty rhetoric.
Medicare Advantage programs were established to introduce market reforms to the Medicare program. The flexibility of the Medicare Advantage programs have made them popular with seniors, especially lower income beneficiaries. Nearly 30,000 seniors in the 16th Congressional District elect one of these plans.
Because of deep cuts in the program, Republicans estimated that one in four seniors could see their Medicare Advantage plan cancelled. These estimates were wrong. Now the Centers for Medicare and Medicaid Services estimate that half of seniors will lose the coverage that they currently have.
Seniors on Medicare Advantage aren’t the only ones who could see changes to Medicare. The law cuts $575 billion out of Medicare over the next ten years. It’s difficult to clearly identify how this will change the program, but many doctors warn that they may not be able to continue seeing Medicare patients if the cuts are too severe. Already, Medicare reimbursement rates are far below those paid by private insurers.
Shortly after passage of the health care bill, companies such as AT&T, Caterpillar, Verizon and John Deere released statements noting that the new law would affect their bottom line. These companies were immediately attacked by leading Democrats as trying to undermine the health care law.
I serve on the House Energy and Commerce Committee and Chairman Henry Waxman (D-CA) immediately scheduled a hearing so that he could interrogate the CEOs of these companies. Only after scheduling the hearing did he come to understand that federal regulations require companies to publicly report such information. They were just acting in accordance with the law.
Documents demanded by the Energy and Commerce Committee show that these four companies are evaluating whether to drop their current healthcare coverage and instead pay government penalties established in the new law. Just these four companies cover over 2.3 million workers. There’s no easy way to tell how many other companies are trying to figure out whether dismantling their employee health benefits will benefit their bottom line.
It hasn’t been 100 days since enactment of the new health care law, and there are bound to be other surprises down the road. I opposed the bill because I don’t believe that centralizing decisions about health care in Washington will reduce costs or improve care.
There were good things done in the health care law like allowing young people to stay on their parents’ plan longer and ensuring that Americans are not denied coverage for pre-existing conditions. I think we can take action to preserve the parts of the plan that every American agrees on and introduce real market-based reforms. There’s time to make major changes, but we shouldn’t wait long to make improvements.
Rep. Joe Pitts (R) represents Pennsylvania’s 16th District in the U.S. House of Representatives.