Bad news for healthcare in America

Dear Policy Patriots,

With every week that passes, we learn more about ObamaCare and it just gets worse. The recent report on the practical effects of ObamaCare from the Chief Actuary of the Centers for Medicare and Medicaid (CMS) is devastating.

Here are the salient findings of this report:

Health care costs will go up, not down. National health expenditures will increase from 17 percent of GDP now to 21 percent under the new law and will be higher than without the legislation. Net federal spending on health care will also increase.

Health care shortages are "plausible and even probable." Because of the increased demand for health care, "supply constraints might initially interfere with providing the services desired by the additional 34 million insured persons."

14 million employees will lose their employer coverage. Employees of small firms are especially at risk (despite small employer tax credit subsidies).

2 million employees who lose coverage will have to enroll in Medicaid. A Medicaid insurance card is not a guarantee of care. An estimated 18 million people will be added to Medicaid. However, because there is no corresponding increase in the supply of caregivers, "it is reasonable to expect that a significant portion of the increased demand for Medicaid would be difficult to meet, particularly over the first few years."

One in ten insured workers will see their health benefits taxed. By 2019, more than 10% of insured workers will "be in employer plans with benefit values in excess of the thresholds (before changes to reduce benefits) and this percentage would increase rapidly thereafter."

Higher taxes will lead to higher premiums. The new taxes on medical devices, prescription drugs, and insurance plans "would generally be passed on through to health consumers in the form of higher drug and device prices and higher insurance premiums."

There are more than one-half trillion in Medicare cuts. The new health law cuts "$575 billion" from Medicare.

Medicare cuts would threaten almost one in every seven hospitals. About "15 percent of Part A providers would become unprofitable within the 10-year projection period."

Overall access to care for seniors would go down. Because of the law's payment reductions, "providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program.

7.4 million people will lose access to Medicare Advantage plans. Enrollment in MA plans will be cut in half (from its projected level of 14.8 million under the current law to 7.4 million under the new law).
False advertising: The new "Medicare Tax" doesn't go to Medicare. "Despite the title of this tax, this provision is unrelated to Medicare; in particular, the revenues generated by the tax on unearned income are not allocated to the Medicare trust funds."

False advertising: Budgetary double-counting does not improve Medicare's solvency. Medicare cuts "cannot be simultaneously used to finance other federal outlays (such as the coverage expansions) and to extend the [life of the Medicare] trust fund, despite the appearance of this result from the respective accounting conventions."

The new long-term care insurance plan (CLASS Act) is unsound. The program faces "a significant risk of failure" because the high costs will attract sicker people and lead to low participation.

The promise to those with pre-existing conditions is unfunded. "By 2011 and 2012 the initial $5 billion in Federal funding for [high risk pools] would be exhausted, resulting in substantial premium increases to sustain the program."

The law does almost nothing to limit actual fraud and abuse. The fraud provisions in the law will save only about two percent of $47 billion in suspect claims.

The National Center for Policy Analysis is committed to leading the fight against ObamaCare and in favor of patient-centered health policy reforms. Our policy solutions are only possible with your support. Please consider donating to the National Center for Policy Analysis. You can donate online or mail a check to:

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Thanks for your continued support!


Jeanette Nordstrom
National Center for Policy Analysis
www.ncpa.org