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Why Seniors Could Pay $5,900 More for Health Care Under the Republican Budget

Our guest blogger is Topher Spiro, the Managing Director of Health Policy at the Center for American Progress.

Earlier this week the Center for American Progress released an analysis of the Republican budget’s Medicare plan, which would provide vouchers to beneficiaries to purchase either a private health insurance plan or the traditional Medicare plan. We pointed out that new beneficiaries could end up paying as much as $1,200 more per year by 2030 and $5,900 more per year by 2050. Here’s a detailed explanation of where those numbers come from.

The nonpartisan Congressional Budget Office analyzed the Republican budget and estimated its effect on average Medicare spending per beneficiary. Under current law, or CBO’s “baseline scenario,” CBO projects that average spending will rise from $5,500 today to $8,600 in 2030 and to $17,000 in 2050. (CBO converted all dollar figures to 2011 dollars to remove the effects of inflation and ensure appropriate comparisons over time.) These numbers reflect the projected trend in health care costs over time.

But the Republican budget would limit the growth in Medicare spending per beneficiary to growth in the economy plus 0.5 percentage points. That growth rate is much slower than the projected growth rate under current law. As a result, under the Republican budget, CBO projects that average spending would rise to only $7,400 in 2030 and to only $11,100 in 2050. Since the Republican budget would convert Medicare spending into vouchers, these dollar amounts would be the amounts of the vouchers, on average.

In other words, CBO projects that government spending per beneficiary would be $1,200 lower in 2030 (the difference between $8,600 under current law and $7,400 under the Republican budget) and $5,900 lower in 2050 (the difference between $17,000 under current law and $11,100 under the Republican budget).

The key question is: where would these cuts in government spending per beneficiary come from?

For all its self-congratulation for specificity, the Republican budget never specifies how its cap on Medicare spending would be enforced. Under current law, the Affordable Care Act limits growth in Medicare spending to growth in the economy plus 1 percentage point. That cap is enforced by a specific mechanism—an independent expert panel—that creates a strong incentive for Congress to act. But Republicans have disavowed any such mechanism.

And in the absence of any other enforcement mechanism, it’s likely that the cap would be enforced by limiting the amount of vouchers provided to beneficiaries. After all, we know that capping the vouchers is the clear policy goal of Republicans—we need look no further than the budget they proposed last year. What’s more, converting all Medicare spending into vouchers means that it would be difficult to limit Medicare spending by any other means.

The vouchers, therefore, would likely be capped at CBO’s projected spending per beneficiary under the Republican budget: $7,400 in 2030 and $11,100 in 2050. And since these amounts would be much lower than actual costs, beneficiaries would be left to pay the difference.

Of course, Republicans would argue that competition under premium support would lower actual costs below current law levels. But there’s scant evidence that competition alone would lower health care costs substantially. Why? Simply increasing competition among insurers would have little effect without addressing underlying health care costs and competition among health care providers. And even if competition did lower costs, it would only lower the level of costs—not the growth in costs over time.

The upshot is that it’s highly unlikely that competition would come anywhere close to lowering actual costs to the amount of the vouchers. And if competition doesn’t end up lowering costs at all, beneficiaries would be on the hook for $1,200 by 2030 and $5,900 by 2050.

Climate Progress

Fossil-Fueled Heat Wave Spurs Record Allergy Season

The warm winter followed by the freakish March heat wave that turned the start of spring into summer has started a record allergy season with a “blast of tree pollen” across the United States:

The surreal heat that’s baking much of the central and eastern USA has unleashed an unusually early and intense blast of tree pollen, making life miserable for tens of millions of people who suffer from seasonal allergies. Forecasters and allergists blame the unseasonably warm weather, and few cold snaps, for causing plants to bloom weeks earlier. Atlanta, for example, smashed an all-time record with 9,369 particles of pollen per cubic meter on Tuesday, coating the city with a thin, yellow layer of pollen.

Atlanta’s previous record was a pollen count of 6,000 — 1,500 is considered high. Allergist Stanley Fineman, president of the American College of Allergy, Asthma and Immunology, told USA Today “his allergist colleagues elsewhere in the South as well as in parts of the Northeast and Midwest are all reporting patients with severe allergy symptoms, due to the recent warm weather.”

The “surreal heat,” scientists agree, was fueled by the greenhouse pollution that is transforming our planet into a hotter, more dangerous place to live.

Obama Campaign Launches New ‘I Like Obamacare’ Page

The Obama campaign is looking to dispel any notion that it is running away from the president’s signature accomplishment — the passage of the Affordable Care Act — and has launched a new petition fully embracing the law on its second birthday. The site, titled “I Like Obamacare,” takes full ownership of the moniker Republicans have assigned to the measure in an effort to disparage it and asks Americans to add their support:

Interestingly, despite the fact that critics of the law have outspent its supporters three-to-one on television ads, “public opinion on the healthcare overhaul has been split almost evenly since Obama signed the law two years ago.” Recent polls have shown that the law may be gaining wider acceptance over time.

Obama first embraced “Obamacare” during a stop on his bus tour through the Midwest in August of 2011. “I have no problem with folks saying ‘Obama Cares.’ I do care. If the other side wants to be the folks who don’t care, that’s fine with me,” he said.

Update

The campaign has also launched a new Facebook page around the initiative.

NEWS FLASH

Don Berwick Joins CAP As A Senior Fellow | The Center for American Progress announced today that Dr. Donald M. Berwick — the former administrator of the Center for Medicare and Medicaid Services or CMS and an expert in reforming the health care delivery system — is joining the organization as a Senior Fellow. In an interview with the Washington Post’s Sarah Kliff, Berwick argues that the Affordable Care Act can provide a “foundation” for affordable and accessible health care. “It’s game time now. In the next couple of years we’re going to need to see health-care costs coming under firm control. If that happens, I’ll be optimistic,” he says.

FLASHBACK: Two Years Ago, GOP Predicted ‘Armageddon’ If Health Reform Became Law

Rep. Michele Bachmann (R-MN)

Today is the two-year anniversary of President Barack Obama signing the Affordable Care Act, which, once fully implemented will cover 30 million Americans and begin to lower the rate of growth in health care spending. Since reform passed, however, Republicans have voted to repeal or defund the law at least 25 times and Senate Minority Leader Mitch McConnell (R-KY) is preparing to focus largely on health care as he charts “a course for a Republican Senate in 2013 and what could be a bruising reelection bid in 2014.”

During the nearly 10-month legislative battle that preceded passage and in the years after, the GOP characterized the bill as a “socialist” “government takeover” and warned Americans that the bill would destroy lives and American society, hurling apocalyptic warnings that seem downright satirical two years later:

Below are some of their most outrageous claims:

– REP. JOHN BOEHNER (R-OH): Passage of health reform is “Armageddon” because the law will “ruin our country.” [3/20/2010]

– FRMR. SEN. RICK SANTORUM (R-PA): Health reform “will destroy the country” because, “in the next year or so,” America will have to “dramatically cut the military because we can’t pay for it.” [10/23/2010]

– SEN. TOM COBURN (R-OK): “There will be no insurance industry left in three years.” [10/12/2010]

– REP. MICHELE BACHMANN (R-MN): “On page 16, you can read for yourself that no new health insurance policies can be written once this federal plan comes into effect.” [7/17/2009]

– GLENN BECK: “This is the end of prosperity in America forever … the end of America as you know it.” [11/19/2009]

– SEAN HANNITY: “If we get nationalized health care, it’s over; this is socialism.” [11/2/2009]

– REP. PAUL BROUN (R-GA): “That’s exactly what’s going on in Canada and Great Britain today…and a lot of people are going to die.” [7/10/2009]

– REP. LOUIE GOHMERT (R-TX): “I would hate to think that among five women, one of ‘em is gonna die because we go to socialized care.” [7/15/2009]

– REP. VIRGINIA FOXX (R-NC): “The Republican plan will] make sure we bring down the cost of health care for all Americans and that ensures affordable access for all Americans and is pro-life because it will not put seniors in a position of being put to death by their government.” [7/28/2009]

– SEN. TOM COBURN (R-OK): “I have a message for you: you’re going to die soon…When you restrict the ability of the primary care givers int his country to do what is best for their senior patients, what you are doing is limiting their life expectancy.” [12/1/2009]

– REP. MICHELE BACHMANN (R-MN): “Socialized medicine is the crown jewel of socialism. This will change our country forever.” [11/3/2009]

– HERMAN CAIN: “If ObamaCare had been fully implemented when I caught cancer, I’d be dead.” [8/18/2011]

– NEWT GINGRICH (R): “I think it is a disaster. I think, candidly, Governor Palin got attacked unfairly for describing what would, in effect, be death panels.” [10/11/2011]

– RICK SANTORUM (R): “What got me into this race was Obamacare…I believe, final death knell will be to America of having government control that very critical aspect of our life, which is access to the care that we need to stay alive.” [12/13/2011]

Romney Celebrates Health Care Reform Anniversary By Lying About It

On the second anniversary of the Affordable Care Act, Mitt Romney seems willing to say almost anything to distance himself from the fact that his 2006 Massachusetts health care law served as a template for the national coverage expansion — even if it includes outright lying about its provisions.

During an event this morning in Louisiana, Romney told at least three whoppers. The former governor said that a recent Congressional Budget Office report concluded that the costs of the law have doubled, cited a discredited study claiming that 30 percent of employers will stop offering insurance as a result of the law, and insisted that the Catholic Church would be required to offer birth control to its employees:

– ROMNEY LIE 1: “And we’ve just learned from the CBO, it’s not a trillion dollars. It’s more like double that…Obamacare is massively more expensive than had been originally estimated.”

– ROMNEY LIE 2: “Thirty percent of employers said they are going to drop the coverage for their employees when Obamacare is installed.”

– ROMNEY LIE 3: “The Catholic Church is being told that they have to provide insurance that covers morning after pills, sterilizations, and contraceptives. Despite the fact that these very features violate the conscience of the Catholic Church itself.

Watch it:

But he’s wrong — dead wrong on all three points. In a report released last week, the CBO actually found that the Affordable Care Act was expected to cost $50 billion less than they anticipated a year ago. Romney is twisting the results by referring to the gross cost of the legislation for 11 years ending in 2022 — $1.76 trillion — and comparing it to the original cost estimate of $938 billion over 10 years ending in 2019. As FactCheck.org explained, “The 11-year figure is much higher because it includes three additional years of full implementation of the coverage provisions of the law.” After accounting for the law’s offsets, the “net” cost of the coverage provisions are “expected to be somewhat lower than projected two years ago. Comparing the eight years that are common to both estimates, the net cost is now predicted to be $772 billion, or about half a percent lower than originally estimated.”

Romney’s claim that 30 percent of employers will drop coverage comes from a study conducted by McKinsey, which after stirring much controversy, promptly walked back its projection. McKinsey stressed that the report “was not intended as a predictive economic analysis of the impact of the Affordable Care Act. Rather, it captured the attitudes of employers and provided an understanding of the factors that could influence decision making related to employee health benefits.” The CBO projects that 3 to 5 million employees may lose coverage, while surveys of employers have found that the vast majority of businesses will continue to offer insurance to employees when the law’s insurance exchanges start up. In fact, if Massachusetts’ health reform is any indication, employers are highly unlikely to dump employees into the exchanges.

Finally, as Romney well knows, the Catholic Church — and all houses of worship — are specifically exempt from the rule requiring employers to provide preventive services like contraception to their employees. Yet he continues to repeat the lie incessantly, suggesting that he’s willing to say anything to appeal to the conservative base and win the election.

House Republicans Accidentally Accept The Constitutionality Of The Affordable Care Act

On Thursday, House Republicans stripped language from their own health care bill that could “undermine their argument that the Democrats’ 2010 healthcare law abused the Commerce Clause of the Constitution,” The Hill’s Pete Kasperowicz reports. That language, included in H.R. 5, a bill to repeal the Affordable Care Act’s Independent Payment Advisory Board (IPAB), read:

Congress finds that the health care and insurance industries are industries affecting interstate commerce and the health care liability litigation systems existing throughout the United States are activities that affect interstate commerce by contributing to the high costs of health care and premiums for health care liability insurance purchased by health care system providers.

The administration is deploying this very argument in defense of the Affordable Care Act at the Supreme Court next week, insisting that since health care costs “affect interstate commerce,” the Constitution’s commerce clause empowers Congress to regulate the industry and require everyone to purchase coverage in an effort to lower insurance premiums. As a result of the mandate — that is, if people must purchase insurance before they fall ill — Congress can require insurance companies to accept all applicants, regardless of their pre-existing conditions, and offer more affordable coverage to those who need it most.

H.R. 5 passed the House on Thursday, but even with the last minute change, the final version of the bill still includes language that resembles the administration’s claim that Congress can regulate the purchase of health care under the Constitution’s Commerce and Necessary and Proper clauses:

SEC. 303. CONSTITUTIONAL AUTHORITY.

The constitutional authority upon which this title rests is the power of the Congress to provide for the general welfare, to regulate commerce, and to make all laws which shall be necessary and proper for carrying into execution Federal powers, as enumerated in section 8 of article I of the Constitution of the United States.

The bill specifically mentions “interstate commerce” in its definition of ‘health care lawsuit’: “The term ‘health care lawsuit’ means any health care liability claim concerning the provision of health care goods or services or any medical product affecting interstate commerce, or any health care liability action concerning the provision of health care goods or services or any medical product affecting interstate commerce,” it reads.

INFOGRAPHIC: The Affordable Care Act Turns Two

Two years ago today, President Obama affixed his signature to the Affordable Care Act, the first major piece of federal healthcare legislation since the creation of Medicare and Medicaid. The bill was the end result of months of careful negotiations in Congress and years of failed attempts by previous administrations to reform an increasingly expensive and outdated healthcare system.

Even before the ink dried, Republicans started calling for the law’s repeal and have so far voted at least 25 times to roll back or defund it. Should they succeed, millions of Americans would become uninsured, seniors would pay more for prescription drug coverage, and the insurance industry would once again be able to deny coverage to individuals with pre-existing conditions and impose annual and lifetime limits on coverage.

While most of the law does not go into effect until 2014, take a look at some of the benefits Americans are already enjoying and what Republicans would take away:

Morning CheckUp: March 23, 2012

Happy birthday: “The Patient Protection and Affordable Care Act — the health care overhaul law that President Obama championed and Republicans rejected — turns two on Friday. The law is headed to the Supreme Court on Monday, where the Justices begin hearing three days of arguments about the constitutionality of the law.” [NPR]

Health insurance premium hikes called ‘excessive’ by federal regulators: “Health insurance premium hikes in nine states as high as 24 percent are ‘excessive’ and should be blocked, the federal Department of Health and Human Services said Thursday. The agency will have to depend on states to take action, however, because the federal government lacks the authority.” [Huffington Post]

Mitch McConnell to prioritize repeal: “Planning for a GOP takeover, McConnell and other top Republicans have begun shaping an early legislative agenda for 2013 aimed initially at repealing Obama’s health care law. Texas Sen. John Cornyn, who wants to be the No. 2 Senate Republican, said the “most obvious way” to kill the law would be to wait until there’s a GOP Senate and push repeal via a 51-vote, simple majority through the budget reconciliation process. With the economy showing signs of life and the prospect of gas prices coming back to earth, McConnell signaled it may make more sense to focus on health care as a campaign tactic.” [Politico]

Women’s health advocates seize on Etch A Sketch comments: “About 20 demonstrators with the National Abortion Rights Action League (NARAL) gathered outside a hotel where GOP presidential candidate Mitt Romney planned fundraising remarks Thursday and used Etch A Sketch toys recently mentioned by the Romney campaign as part of their protest.” [CNN]

Paul Ryan’s health care fantasy: “The Ryan plan does not, in fact, offer a serious vision of health care reform or balanced budgets. Instead, it is a conservative fiscal fantasy, albeit one that would dramatically erode access to medical care for America’s most vulnerable populations.” [Health Affairs]

The history behind the women’s health storm brewing in Texas: “In the battle between state leaders and the Obama administration over Texas’ decision to oust health care providers affiliated with abortion clinics from a five-year-old contraception and cancer-screening program, both sides believe they are the victims.” [NYT]

ACLU may sue over Utah’s new 72-hour abortion waiting period: “Both the American Civil Liberties Union of Utah and Planned Parenthood Association of Utah had asked Herbert to veto HB461, which triples the current waiting period between the initial consultation and the procedure to 72 hours. The organizations are now considering the constitutional concerns raised by law “and what our next course of action might be,” said Marina Lowe, legislative and policy counsel for ACLU Utah. Asked if the parties planned to file a lawsuit to stop the law from taking effect, Lowe said, a legal review is under way. “I can’t commit further than that at this point.” [KSL]

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