Obama’s prescription for health reform more of the same

Grace-Marie Turner President, Galen Institute
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There was absolutely nothing new in President Obama’s much-heralded speech Wednesday. No game-changing ideas. No genuine efforts at bipartisanship. No change in his determination to impose government control over our health sector for decades to come.

Worse, the president repeated the arguments he’s been using for a year, which have been proven wrong by numerous independent studies. Take just three examples from his White House speech on Wednesday:

• President Obama: “If you like your plan, you can keep your plan.”

The steep cuts in Medicare Advantage he supports would mean at least one-third of seniors likely could lose their comprehensive Medicare Advantage coverage as their plans are forced to withdraw from the program, cut their benefits, or raise premiums. In addition, at least 10 million people with employer-sponsored insurance could lose their current coverage, according to the Congressional Budget Office.

Mr. Obama himself acknowledged at last week’s health reform summit that “8-9 million people…might have to change their coverage.”

• President Obama said his plan will “bring down the cost of health care for millions—families, businesses, and the federal government.”

The Congressional Budget Office has reported that health insurance premiums will continue their steady upward climb under the Senate bill. Families purchasing insurance in the individual market would see an increase of $2,100 in the year 2016, over and above increases they already will be facing. That means those families would be paying $15,200 in 2016 for health insurance if the Senate bill passes, and $13,100 if it doesn’t.

Families that get health insurance through small businesses will be paying $19,200 in six years, and those working for large firms, $20,100.

PricewaterhouseCoopers released a study, commissioned by America’s Health Insurance Plans, which showed the cost of a family plan in 2019 would be $4,000 a year higher if reform passes.

And Chief Medicare Actuary Rick Foster estimates that, under the Senate bill, “Federal expenditures would increase by a net total of $279 billion” between 2010 and 2019. So his plan would cost families, businesses, and the federal government more, not less.

• President Obama said his plan “brings down our deficit.”

Congressional leaders hammered the CBO into submission as they drafted their legislation, using the CBO’s scoring tactics against them to pretend the legislation reduces the deficit.

But former CBO Director Doug Holtz-Eakin concludes the bills “can claim to be deficit-neutral only because during its first decade it offers 10 years of taxes compared with six years of subsidies. “The Republican staff of the Senate Budget Committee estimates that, fully implemented, Democratic legislation would cost $2.4 trillion over 10 years, nearly three times the cost projected by the Congressional Budget Office,” Holtz-Eakin said. This would significantly expand, not shrink, the deficit.

Further, CBO shows the Senate bill double-counts Medicare savings. Savings to the Medicare program “would be received by the government only once … they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs.”

Medicare Chief Actuary Richard Foster made the same point: A series of accounting maneuvers makes it appear that Medicare’s Part A trust fund would be in better shape under the Senate bill that is the basis of the president’s plan, but that’s not so. “In practice, the improved Part A financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansion under [the Senate bill]) and to extend the trust fund,” Foster wrote.

Further, Foster said, making the cuts to Medicare that the Senate bill requires in order to get its deficit score would “represent an exceedingly difficult challenge.”

So just on these three examples—keeping your current coverage, lowering costs, and reducing the deficit—the president is wrong. It is though he simply dusted off the same speech he has been giving for a year, using arguments that have been proven as inaccurate by independent studies and analyses, and hoping that maybe, just maybe, this time the speech will work.

The president and his aides may twist arms and torture Congress into passing ObamaCare, but the more he forces this through, the more the American people are going to reject being force-fed a health plan they strongly oppose.

Grace-Marie Turner is president of the Galen Institute, a non-profit research organization that focuses on free-market ideas for health reform. She can be reached at galen@galen.org