CMS: House Health Bill Will Hike Costs $289B

Molly K. Hooper, The Hill, November 14, 2009

The House-approved healthcare overhaul would raise the costs of healthcare by $289 billion over the next 10 years, according to an analysis by the chief actuary at the Centers for Medicare and Medicaid Services (CMS).

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However, the CMS analysis clearly states that the House bill falls short in attaining a key goal of the Democrats’ effort to reform the nation’s healthcare system: “With the exception of the proposed reduction in Medicare . . . the provisions of H.R. 3962 would not have a significant impact on future healthcare cost growth rates.”

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Brendan Daly, communications director for Speaker Nancy Pelosi (D-Calif.), said, “The report shows that our health reform bill will extend the life of the Medicare trust fund by five years–significantly longer than any proposal in recent years,” adding, “Medicare actuaries estimate $100 billion more in savings than CBO from Medicaid and Medicare.”

Minority Leader John Boehner (R-Ohio) highlighted the CMS report on Saturday in a written statement. “This report once again discredits Democrats’ assertions that their $1.3 trillion government takeover of health care will lower costs, and it confirms that this bill violates President Obama’s promise to ‘bend the cost curve.’ It’s now beyond dispute that their bill will raise costs, which is exactly what the American people don’t want.”

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According to the 31-page report, the House-passed bill would increase costs, cut Medicare and expand Medicaid.

“In aggregate, we estimate that for calendar years 2010 through 2019 [national health expenditures] would increase by $289 billion,” the report notes.

“About three-fifths” or more than 60 percent of the uninsured would gain coverage by an expansion in Medicaid eligibility.

Medicare would be cut by “more than one-half trillion dollars ($571 billion), . .&nbps;. possibly jeopardizing access to care for beneficiaries,” according to the report, and smaller companies would be “inclined to terminate their existing coverage.”

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In an interview with The Hill on Saturday afternoon, Camp [Ways and Means Committee ranking member Dave Camp (R-Mich.)] pointed out that CMS actuarial numbers were cited by Democrats back in 2003 during the Medicare prescription drug debate. CMS estimated at that time that the GOP-crafted Medicare bill would cost more than $550 billion over 10 years while CBO estimated its pricetag at $395 over the same period. The CMS cost estimate did not emerge until after the final conference bill was approved by Congress.

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