Uncategorized

The Obama Health care Budget

President Obama signs the State Children's Health Insurance Program (SCHIP) bill into law on February 4th. The bill expands coverage to an additional 4.1 million school age children.
Pieces of the health care portion of the Obama budget are leaking out.

Based upon published reports, the Obama “down payment on health care reform” will include:

  • $634 billion to help pay for health care reform over the next ten years.
  • $318 billion of that—about half—will come from tax increases that include reducing the mortgage and charity deduction for high income Americans.
  • Charging wealthier seniors more for the Medicare Part D drug benefit—as is done for Medicare Part B now.
  • Cutting Medicare HMO payments by $175 billion over ten years.
  • Reducing Medicare hospital payments by $17 billion over ten years by bundling inpatient and outpatient reimbursement to include the 30-days after discharge.
  • Cutting Medicare hospital payments by $8.4 billion over ten years for re-admissions resulting from substandard care.
  • Requiring drug makers to increase the rebates on drugs sold to Medicare patients from 15% to 21% saving $19.5 billion over ten years.

The biggest spending reduction is the cut to Medicare HMO payments. This one is hardly a risky political move as everyone has expected it. That said, in no event would they
get the full $175 billion in savings because it is simply impractical
to implement such a major change in the Medicare Advantage program by
the next enrollment season which begins late this fall.

Interestingly, the Obama budget reportedly calls for creating a system where the private Medicare plans will bid market to market
to compete with the traditional Medicare plan rather than continuing
the current system where the government tries to set the rates for them.

Ironically, that was the original Republican idea for using the competitive value of managed care to reduce long-term Medicare costs
and is what should have happened in the first place rather than this
temporary system of overpayments the HMO industry has been fighting to
keep permanent.

With $318
billion in tax increases and another $175 billion in Medicare HMO cuts,
the $634 billion "down payment" only contemplates a total of another
$141 billion in federal health care cuts <>over ten years (which amounts to about 1% of annual federal spending each year).
That is hardly a rounding error on a federal health care budget that
CMS just announced will already total $1.19 trillion in just 2009.

This week, CMS estimated that at present trends annual national health care spending would reach $4.35 trillion or 20% of GDP by 2018.

If
the Obama administration is serious about not “kicking the can further
down the road” then any overhaul of our health care system has to do
more than fritter around the edges with spending reductions.

More,
it needs to be paid for from real savings—not half of the "down
payment" coming from tax increases as they are reportedly proposing.

If
the plan is to raise taxes to pay for a big part of health reform that
just means they better raise enough taxes to pay for the $4 trillion
health care system CMS says we are going to have in 2018.

As
the budget details come out over the next few days the question we all
need to be asking is, Just what is this administration willing to do to
make health care affordable over the next ten years?Affordability
will have a lot more to do with the how this administration deals with
the $2.5 trillion we already spend every year not whose taxes we can
raise.

Robert Laszweski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. Before forming HPSA in 1992, Robert served as the COO, Group Markets, for the Liberty Mutual Insurance Company. You can read more of his thoughtful analysis of healthcare industry trends at The Health Policy and Marketplace Blog.

RECENTLY ON THCB:

"For the Obama Administration Health Care Reform Will Require Tough Cost Containment""Are We Mature Enough to Use Comparative Effectiveness Research?""Unpacking ARRA""Skipping Out on America's Future""Massachusetts Docs say Single Payer or Bust"

Livongo’s Post Ad Banner 728*90

Categories: Uncategorized

Tagged as: ,

88
Leave a Reply

87 Comment threads
1 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
66 Comment authors
JanedouphenphedrineMatthewloose vaginajef Recent comment authors
newest oldest most voted
phenphedrine
Guest

Whats up very nice site!! Guy .. Excellent .. Wonderful .. I’ll bookmark your site and take the feeds additionally?I’m glad to find so many helpful information here within the put up, we need develop more strategies in this regard, thanks for sharing. . . . . .

Matthew
Guest
Matthew

I try to look at both sides of the issue. Basically, this law allows for health care to be more affordable for all families by placing a limit on the coast of health care services. Since the coast of health insurance is reduced by this law. This new law also states that students can be claimed on their parents’ health insurance until you are 25 years-old. The new law would also prevent insurance companies from dropping people due to new policies, which insurance companies have been known to do in the past. While health care is a good thing, there… Read more »

loose vagina
Guest

hi!,I like your writing so a lot! proportion we communicate extra about your article on AOL? I need a specialist on this space to unravel my problem. Maybe that’s you! Looking ahead to look you.

jef
Guest

Aren’t all of the previous comments above about the symptoms of something much more basic? The only area of health care that has stayed at the same rate of inflation as the overall economy is elective cosmetic surgery. We must find a way to establish incentives based on market forces. But we have a public (not just a President) who are so addicted to subsidies of one kind or another, that past Republican plans such as health savings accounts and catastrophic insurance only have not gotten off the ground. The public (even the “poor” of Las Vegas) are so debt… Read more »

FIRED SAYS
Guest
FIRED SAYS

Fried Chicken? Mediciad Inducements? The 101 Dumbest Moments In Business 2003 EDITION Whiffed pitch No. 6: blatant stereotyping. By Mark Athitakis April 1, 2003 (Business 2.0)– GRAND PRIZE WINNER, DUMBEST MOMENT OF 2002 Which leads to the question, Who is Chicken Man? & Why were whole fried chickens selected? In September, insurance company AmeriChoice brings trucks to blighted neighborhoods in New York City and gives away coupons for “free chickens” as an incentive for the underprivileged to switch their Medicare coverage. New York state senator Carl Kruger files a complaint with the state attorney general. The 101 Dumbest Moments In… Read more »

The Law Applied
Guest
The Law Applied

THE DIFFERENCE in the law of the land AS APPLIED. The difference in the law as applied to a “person vs a corporation” on one hand the corporation, has a formal contract signed with the government not to break the health laws,, rules and regulations, so any violations that occur now become trivial, as well as evidence recovery denied, jury trial denied, and of course any claims submitted to the government really don’t exist. The person a doctor not a corporation, jury trial allowed, evidence gatherning allowed, of course no formal contract signed with the government his mistakes are real.… Read more »

Honest Fraud
Guest
Honest Fraud

Beatrice Wilkinson Welters is President Obama’s nominee for ambassador to Trinidad and Tobago. No surprise, her husband Anthony Welters, is an executive with UnitedHealthGroup which brought in $200,000-$500,000 in campaign donation for the election and another $100,000 for the Obama crowning inaugural. Beatrice Welters donated $4,600 to the Obama campaign in each of the years 2007 and 2008. Her husband, Anthony donated $4,600 in 2008. The Welters’ two sons were also $4,600-donors: Bryant, reportedly 19 years old today, donated $4,600 in the second quarter of each of the years 2007 and 2008, when he was an unemployed student, and Andrew,… Read more »

Brenda
Guest
Brenda

Coventry healthcare/Health America/Health Assurance is one of the worst insurance companies. They put pressure on physicians not to prescribe more than 1 medication. They harass physicians that perform procedures. They deny all claims. Insurances should not be able to get away with this. They are so powerful that they arm twist physicians if they bring any issues to their attention. They have the worst customer service.

Arthur
Guest
Arthur

I’m willing to let anyone out of the insurance mandate, if they want. When you get in a car crash, or get sick, we’ll let the nurses put you in the “dying pretty soon” room. But you aren’t getting care. The whole point of insurance is to have everyone in the pool of insured. If people want out, that’s fine, but you won’t get any care either. And don’t bother trying to get insurance after you get sick. You can’t do that with car insurance: it isn’t fair to do it for any insurance. For the people that don’t want… Read more »

SteeezySea
Guest
SteeezySea

This whole healthcare plan gives me themhercrum. I mean, whose to say that it won’t be the precursor to the development of the American socialist state?!? Obama’s treading a fine line with his power here, and I for one, am not going to sit here and tacitly take whatever he spoon feeds us…

Mark
Guest
Mark

Agree totally – get rid of insurance companies and have one universal health care service for all, not much chance of that happening though is there?
Seriously, the changes in law will provide access to 40 million people who otherwise do not have medical cover, surely that in itself should be celebrated? Better this then a large % of the population missing out altogether or have American’s become so concerned for themselves that they are happy to maintain an underclass of people who do not have access to first world health facilities?

Cindy
Guest
Cindy

If the health care law is so good, lets require Obama, his cabinet and the entire congress to be subject to it as well. What’s good for the goose …..

Mark
Guest
Mark

What does America fear from a universial health care system? Surely it is important that Governments look after the most in need. USA has the worst record of any 1st world country in meeting the health needs of its people. Some third world countries have a better health system. It is obviously an American thing? The rest of the world believes in looking after the health of its people, the invisable hand of the market cannot look after the most in need – it requires intervention? The rest of the world looks on with amazement that such controvesy and debate… Read more »

David
Guest
David

If this health care bill was any good then Obama and the white house would not have to bribe or blackmail anyone for their vote.

Arthur
Guest
Arthur

If reform is passed, what’s keeping insurers from covering everyone, and jack up the premiums? If my insurance goes up 100%, it’s just as useless to me as if they just refused to cover me due to preexisting conditions. I can’t afford it.
As much as I’m not enthused about the current bill, I see no reason at all to believe that “starting from scratch” or spending more time to get a bipartisan bill will result in anything better. I feel absolutely certain that it will only be weaker, weaker, weaker.