Health Reform Will Cover More People, Cost More Than Orginally Projected

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Apr 23rd, 2010

Health Reform Will Cover More People, Cost More Than Orginally Projected

"In the first comprehensive look by neutral experts" of the health law, The Associated Press reports that "More Americans will be covered, but costs are also going up. Economic experts at the Health and Human Services Department concluded in a report issued Thursday that the health care remake will achieve Obama's aim of expanding health insurance — adding 34 million to the coverage rolls. But the analysis also found that the law falls short of the president's twin goal of controlling runaway costs, raising projected spending by about 1 percent over 10 years. That increase could get bigger, since Medicare cuts in the law may be unrealistic and unsustainable, the report warned."

The report also warns that Medicare cuts could drive 15 percent of hospitals into debt and could drive people out of Medicare Advantage plans by as much as 50 percent. "... some of the cost-control measures in the bill — Medicare cuts, a tax on high-cost insurance and a commission to seek ongoing Medicare savings — could help reduce the rate of cost increases beyond 2020. But it held out little hope for progress in the first decade" (Alonso-Zaldivar, 4/23).

The Hill: The report - from CMS actuary Richard Foster - says the "new healthcare reform law would cost $828 billion over the next decade while saving $577 billion." Foster said, however, that the projections don't take into account changes to the tax code that were enacted including a tax on high-cost — so-called "Cadillac" — insurance plans. "Foster informed lawmakers that his office needed time to assess the law, and was unable to complete its analysis by the time Congress voted on the bill. Congress is bound by numbers released by CBO, which released its cost estimates before the final House and Senate votes" (Cusack, 4/22). 

Los Angeles Times: The health overhaul could result in lower Medicare premiums for seniors and a more sustainable Medicare program. "The analysis, the first since Obama signed the law last month, suggests that the Medicare program will remain viable until 2029 – longer than some earlier projections. Before passage of the healthcare overhaul, Medicare had been projected to slip into the red in 2017" (Levey, 4/22).

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