- The Washington Times - Tuesday, July 21, 2009

ANALYSIS/OPINION:

The Congressional Budget Office delivered a couple of blows to President Obama’s health care proposals last week. Fear of the trillion dollar costs and at least $240 billion in increased deficits are chasing away even Democrats. And that’s not the worst of it. The price tag is actually much higher than reported because many of the real costs are paid for by others.

The $219 billion of “savings” touted by House Democrats refers to hospital and doctors getting less for their services. This is what the government already does with Medicaid and Medicare, which on average pay 30 percent less for procedures than private insurers. In such instances, hospitals and doctors get less and/or the “savings” are translated into other patients paying more to cover the shortfall. This can more accurately be referred to as “cost shifting,” not “savings.”

States are worrying about the fiscal impact of changes to the health care system. Governors from across the political spectrum realize they will have to pick up a major part of the tab for these supposed cost savings. In the Senate Finance Committee plan, the federal government would pay for the expanded Medicaid costs of the new health care benefits for possibly five years. After that, the states would have to carry their normal Medicaid cost share of 43 percent.

Gov. Haley Barbour, Mississippi Republican, warned at the annual National Governors Association meeting on Sunday that the change to expand the Medicaid system, “would increase spending on Medicaid by 50 percent, and that’s money we don’t have. And other states don’t have it either.” Democratic Gov. Phil Bredesen of Tennessee worried the program would be “the mother of all unfunded mandates.”

Montana’s Democratic Gov. Brian Schweitzer hit the nail on the head. “The governors are concerned about unfunded mandates… . Well if they want to reform health care,” he said about big spenders in Washington, “they should figure out what the rules are and how they are going to pay for it.” Unfortunately, that’s not how policy is made in the nation’s capital.

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