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What does the Congressional Budget Office research show about premium support?

In 2013 the Congressional Budget Office (CBO) researched how premium support, as suggested by House Speaker Paul Ryan’s “A Better Way,” would impact the federal budget, beneficiaries’ payments and choices.

The results of their research revealed that under the two different proposed premium support plans, that both would “reduce federal spending for Medicare net of beneficiaries’ premiums and other offsetting receipts.” Put another way, introducing premium support would adjust the current health care system and permit the free market to offer seniors the ability to pick plans suited to their health needs.

Based on this research, House Speaker Paul Ryan hopefully forecasts that by 2024, Medicare beneficiaries may see private insurers compete for their business on a proposed new Medicare Exchange. The futuristic plan would allegedly have no disruptions in the Medicare Fee For Service program for retired individuals or those about to retire. These individuals would also have the option to enroll in the new premium support program.

With research backing up Ryan’s conclusions that a free market choice is more beneficial to those seeking health insurance it appears that competition and choice may be the future of health care in the United States.

Posted on Friday, January 27th, 2017. Filed under Life Insurance.

Health Reform Won’t Reduce Health Insurance Costs

On the front page of the New York Times and the Wall Street Journal were two articles that really hit at the heart of health reform’s promise of covering everyone and reducing/controlling health insurance costs.

In the New York Times there was also a full page ad run by the American Medical Association urging Congress to pass emergency legislation to prevent their reimbursement rates from dropping. This happens every year as Congress does not have the will to actually implement cost saving measures it adopted years ago to control runaway Medicare expenses. I’m sure that Congress will come back from their Memorial Day break and pass this legislation; like they do every year.

So what makes anyone think that when the time comes to start cutting provider fees under health reform that Congress won’t pass emergency legislation every year to prevent those cuts from happening. I am pretty sure that it won’t, and the attacks on the Dartmouth Study are the initial campaigns by health care providers to make sure its not their fat cut from the meat to pay for health reform.

Karl Rove in his Op-Ed piece in the WSJ makes some pretty compelling arguments about other hidden costs, points out that the Congressional Budget Office has added another $120 Billion to the price tag of health reform and that Medicare’s chief actuary sees many places where the unintended consequences of health reform will cost us a lot more money. While slanted, its worth a read.

Dartmouth Atlas of Health Care MapWhen promoting the cost savings of health reform, the administration used the Dartmouth Atlas of Health Care to show that there is up to $700B a year in potential savings by eliminating “waste” in the health care system. Today’s article in the New York Times makes a very compelling case that the potential savings are significantly less than advertised as “measures of the quality of care are not part of the formula”.

The study mainly shows the varying costs of care in Medicare by region. Everything about savings was an extremely loose extrapolation of the data as it was argued that care in Iowa and Minnesota is better and cheaper than care in New Jersey or Miami. In fact, this article points out that there is little evidence to support this notion.

Bottom line, the recently enacted Health Care Reform plan will cost our country significantly more than advertised and it is simply not possible to provide universal coverage without raising revenue (aka taxes) – on pretty much everyone.

If the legislation goes into effect, it will make our existing budget problems worse and it will lead to higher taxes eventually, and again, not just on people making more than $250,000.

Personally, I am not opposed to the concept that everyone should get health care, but in a democracy we need to have an honest conversation about how much that will cost and then decide if the majority of the people are willing to pay for universal coverage.

Posted on Tuesday, June 1st, 2010. Filed under Health Insurance, Medicare.
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