CMS: House health bill will hike costs $289B

The House-approved healthcare overhaul would raise the costs of
healthcare by $289 billion over the next 10 years, according to an
analysis by the chief actuary at the Centers for Medicare and
Medicaid Services (CMS).

(READ THE FULL REPORT HERE)

The CMS report is a blow to the White House and House Democrats who have vowed that healthcare reform would curb the growth of healthcare spending. CMS’s analysis is not an apples-to-apples comparison to the cost estimate conducted by the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) because CMS did not review tax provisions, which help offset the price tag of the Democrats’ measure.

However, the CMS analysis clearly states that the House bill falls short in attaining a key goal of the Democrats’ effort to reform the nation’s healthcare system: “With the exception of the proposed reduction in Medicare… the provisions of H.R. 3962 would not have a significant impact on future healthcare cost growth rates.”

Republicans immediately seized on CMS’s conclusions.

The long-awaited report should serve as a “stark warning to every Republican, Democrat and Independent worried about the future of this nation,” Ways and Means Committee ranking member Dave Camp (R-Mich.) said in a statement on Saturday. 

{mosads}Though House Republicans pressed to have this analysis completed before the lower chamber voted on the Democrats’ sweeping healthcare reform bill last week, it was not ready until late Friday. Chief CMS Actuary Richard Foster, who prepared the report, recently told The Hill that he and his staff had only a few days to review the bill before it was voted on. 

Brendan Daly, communications director for Speaker Nancy Pelosi (D-Calif.), said, “The report shows that our health reform bill will extend the life of the Medicare trust fund by five years — significantly longer than any proposal in recent years,” adding, “Medicare actuaries estimate $100 billion more in savings than CBO from Medicaid and Medicare.”

Minority Leader John Boehner (R-Ohio) highlighted the CMS report on Saturday in a written statement. “This report once again discredits Democrats’ assertions that their $1.3 trillion government takeover of health care will lower costs, and it confirms that this bill violates President Obama’s promise to ‘bend the cost curve.’ It’s now beyond dispute that their bill will raise costs, which is exactly what the American people don’t want.”

Republicans predicted that if the CMS numbers were available last Saturday when the House voted on the Democrats’ healthcare bill, the measure would not have passed.

“This report confirms what virtually every independent expert has been saying: Speaker Pelosi’s healthcare bill will increase costs, not decrease them. I hope my colleagues in the Senate heed CMS’ findings and refuse to rush ahead until any bill under consideration can be certified to actually reduce healthcare costs,” Camp said. 

According to the 31-page report, the House-passed bill would increase costs, cut Medicare and expand Medicaid.

“In aggregate, we estimate that for calendar years 2010 through 2019 [national health expenditures] would increase by $289 billion,” the report notes.

“About three-fifths” or more than 60 percent of the uninsured would gain coverage by an expansion in Medicaid eligibility.

Medicare would be cut by “more than one-half trillion dollars ($571 billion), … possibly jeopardizing access to care for beneficiaries,” according to the report, and smaller companies would be “inclined to terminate their existing coverage.”

Camp said that the nonpartisan analysis demonstrates that the Democrats’ bill “does the opposite of everything they’ve been wanting to do” in terms of reducing overall health costs.

He added the CMS report shows that “this is not healthcare reform, this is entitlement expansion.”

A Democratic aide said the CMS and CBO findings are not that different: “While the actuaries do not show tax increases, adding those amounts from JCT would also illustrated that the proposal reduces the deficit over the next 10 years.”

In an interview with The Hill on Saturday afternoon, Camp pointed out that CMS actuarial numbers were cited by Democrats back in 2003 during the Medicare prescription drug debate. CMS estimated at that time that the GOP-crafted Medicare bill would cost more than $550 billion over 10 years while CBO estimated its pricetag at $395 over the same period. The CMS cost estimate did not emerge until after the final conference bill was approved by Congress.

CMS’s findings are not binding on Congress, however. Congress must abide by CBO and JCT estimates.

This story was last updated at 7:59 p.m.