Many readers have asked how the Health Care Reform Act can provide health care insurance for another 32 million Americans, but still reduce the deficit by $143 billion? Well, it's not voodoo or magic, but it does need some explaining. Basically, most of the additional revenue comes out of the pockets of hospitals, drug companies and those making over $200,000 a year.
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For example, every year, Medicare agrees on certain payment rates for covered services to health care providers. These annual updates will be reduced by 21%, saving $196 billion. Hospital groups agreed to give up their portion, $155 billion, because they expect to make more than that - at least $170 billion - by having to treat fewer uninsured patients in emergency rooms.
Another $136 billion will be saved by reducing Medicare Advantage overpayments. This private health plan covers one in five seniors. Medicare Advantage costs 13% more than traditional Medicare. The savings from both of these programs will start in 2011. For more, see How Does the Health Care Reform Act Reduce the Budget? You can also listen to my radio interview.
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Comments
You should stick to something you are knowledgeable about, because you just lied to the American public. Not only will this bill cost over 2 Trillion – that doesn’t include the “doc fix” of over 300 billion. The bill also cut 300 BILLION from Medicare to create another entire bureaucracy that is needed to “administer” the plan. Not to mention the 16,000 IRS agents that are needed to enforce the regulations and collect the fines. This bill is predicted to bankrupt the United States within ten years; however, if the U.S.A. loses its AAA bond rating, it could happen in a short period of time.
Interesting. It’s been hard to figure out what exactly has been going on with health care reform. It’s nice to see some helpful info easily laid out! Does anyone else know of any helpful news sites/blogs that have info on health care? So far I’ve found this great one, I definitely recommend checking it out.
http://blog.greensherpa.com/index.php/personal-finance/what-will-the-health-care-reform-do-for-you/
The bill lowers the deficit and provides affordable health care for millions of Americans. It strenghtens traditional medicare and makes it sustainable in the long term. If cuts are not made to the advantage programs(which are unpaid for), medicare will not be solvent into the future. Health care reform is needed to protect medicare for future generations. Advantage programs are a big drain that sends tax payer dollars straight into the insurance company pockets. As a conservative, I applaud all those in congress who voted for this bill which cuts the waste and fraud in our health care system and extends affordable health care to millions more citizens. It is a win win bill. The Republicans who are fighting against it are doing so for political purposes and not the best interest of the citizens of this country. Corporate America, if left unchecked, will ruin this country. Did you see 60 Minutes last night? Corporations think they have the right to patent our genes, which means no one else can study those genes or do any testing that involves those genes. Research that could save lives is being blocked for profits. Anyone who thinks corporate America can run itself, really needs to get an education.
If you believe this bill will reduce the deficit, stand on your head.
1. Cuts in Medicare / Medicaid. Over the last 7 years, federal law has required (and its been in each budget passed by Congress and signed by both Presidents) an across the board reimbursement rate cut to providers of Medicare and Medicaid. Each time, those cuts have been postponed by Congress under an “emergency” spending provision. The last one was earlier this year. Congress will pass another delay some time in the next week or two. The previous postponement runs out this month and Congress will undoubtedly pass the bill to our grandchildren again.
Also, a significant amount of funding for the bill’s out years comes from a new tax on so called “Cadillac” plans. These are health insurance plans where the premiums paid by employers or individuals are in excess of $12,000 per year. These plans often have very low co-pays or deductibles. The plans also most often cover middle class workers for large companies and union members. The original Senate plan had the tax on these plans kicking in around 2014. The Reconciliation bill postpones the tax on these plans until 2018. Do you think the brave men and women of a future U.S. Congress will allow a massive tax increase to hit the middle class in 8 years? Just like the “cuts” above, Congress will pass the buck to our grandchildren.
We the voters are complicit in this crime against future generations because we don’t want to pay our bills and make hard choices.
Amadeo has been drinking the kool-aid. If all figures presented to the CBO are accurate and fall in line over the next 10 years, it’s possible. But politicians are inherently liars and the figures presented to the CBO are simply wishful thinking by some and bald face lies by others.
This was just a step towards universal healthcare.
C
You say universal health care like its a bad thing.
Why should we rely on businesses to fund health care insurance? Only because it isn’t taxed. Through tax policies, the government encouraged businesses to fund health care insurance. With so many people unemployed, this means they lost insurance.
With the shift towards a Freelance Economy, businesses are going to think twice before hiring workers full-time and adding 40% in benefits.
Kimberly
The biggest problem with any program the govt creates is that is always costs more than initial projections. Why? Inch at a time. Granted, the healthcare reform is not an inch (more like a football field), but still, now that it is in place, it will slowly get expanded. And with expansions come increased cost.
I actually like the idea of universal healthcare – in theory. The challenge though is anytime the govt gets involved, the redtape and overhead machine cranks up which causes costs to explode and efficiency to plummet.
That said, it makes my blood boil when I look at what my family spends every year on healthcare to private companies. We need a different solution.
You are certainly right about that. Look at defense spending – it does nothing but grow and grow and grow. And yet it isn’t controversial. Why?
Total security spending for FY 2011 is over $800 billion dollars – that is adding to the deficit each year.
At least health care reform is trying to cut the deficit.
Kimberly
I see a great need for good US health care reform. I do not think the current health care reform bill does that job. But at least it is in right direction. GOP politicians act like they will never come in power. If they do then they will have to face the same problems. Since Reagan, GOP had three presidents and 20 years in white house but did not care to address the health care issue. They were busy cutting taxes, creating more wars and eliminating government regulations on financial sectors and raise debts. Now suddenly they are becoming fiscally conservatives and talking about a funding before any spending. It is good but I did not see them raising the same issue on Iraq war and drug prescription plan!
Why is there such a passionate debate about the government paying for and running health care but none about the government paying for and running defense?