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The “Reform” Truth Will Out

By May 3, 2010Commentary

The Office of Actuary issued its analysis of the effects of the recently passed national health bill.  (Office of Actuary Memo) The Office of the Actuary doesn’t have to accept Congress’ fantasy assumptions like the Congressional Budget Office does, and it has far greater expertise in understanding the economics of health care and insurance, so its analysis has greater credibility.  This memo doesn’t differ significantly in its conclusions from the previous ones before the bill was passed:  national health expenditures will go up, not down and health insurance premiums are also likely to go up, not down.  The Administration did not even attempt to deny the analysis, so we can assume that reality will be even worse; which the Office of Actuary warns is likely, since the Medicare payment cuts in the bill aren’t economically or politically sustainable.

Another disturbing item regarding this memo is that it apparently was available before the final vote, but HHS sat on it. Democrats were so hellbent to get this bill passed that timely release would not have made any difference, but it might have made it harder to mislead the American people about the true effect of the law on premiums and deficits.  As we have said repeatedly, we need real changes in health care and health insurance in this country, but this bill doesn’t change anything in a positive way.  The manner in which was passed is all the proof needed of how deleterious it will prove to be.

At around the same time, the CBO released a memo with the estimate of the number of people who will be affected by the penalty for not obtaining health insurance.  CBO believes that in 2016 four million people will pay over four billion dollars in penalty.  Almost all of these will be middle-class citizens, since poor people are generally exempt.  Because the cost of insurance is likely to be much higher than CBO has projected, it has also likely underestimated the number of penalty payers.  Somehow this information also failed to make its way to the public eye before the final vote.

Those who were such avid proponents of this bill at this point seem to wish that it would also disappear from public view.  The ongoing difficulties in Massachusetts and the growing increases in private health plan premiums, which are driven by changes made by the new law, however, are going to keep health care very visible and most of the news won’t be favorable.  Rapids and turmoil ahead.

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