Congressional Budget Office Analysis on Health Care Bill--It Will Reduce the Federal Budget Deficit

The CBO and the Joint Committee on Taxation came out with a new preliminary finding on the cost estimate of the Affordable Health Care for America Act. Their findings suggest that the health care bill will actually reduce the federal budget deficit. Here's just one portion from their letter:

Estimated Budgetary Impact of H.R. 3962
According to CBO and JCT’s assessment, enacting H.R. 3962 would result
in a net reduction in federal budget deficits of $104 billion over the 2010–
2019 period (see Table 1). In the subsequent decade, the collective effect of
its provisions would probably be slight reductions in federal budget
deficits. Those estimates are all subject to substantial uncertainty.
The estimate includes a projected net cost of $894 billion over 10 years for
the proposed expansions in insurance coverage. That net cost itself reflects
a gross total of $1,055 billion in subsidies provided through the exchanges
(and related spending), increased net outlays for Medicaid and the
Children’s Health Insurance Program (CHIP), and tax credits for small
employers; those costs are partly offset by $167 billion in collections of
penalties paid by individuals and employers. On balance, other effects on
revenues and outlays associated with the coverage provisions add $6 billion
to their total cost.

Over the 2010–2019 period, the net cost of the coverage expansions would
be more than offset by the combination of other spending changes, which
CBO estimates would save $426 billion, and receipts resulting from the
income tax surcharge on high-income individuals and other provisions,
which JCT and CBO estimate would increase federal revenues by
$572 billion over that period.1

Here's the link to the CBO's Letter to Congressman Rangel: http://www.cbo.gov/ftpdocs/106xx/doc10688/hr3962Rangel.pdf
The letter has the details on the budget deficit savings.

55 Republican Congress Members Who Receive Medicare Oppose the Public Option

This is an interesting article. Fifty-five Republican members of Congress who receive Medicare benefits are opposed to the rest of America getting the public option. You can view an article about it here http://thinkprogress.org/2009/10/22/weiner-55-republicans-public-option/.

Let's Think Logically

I will resume my myths next week. For this week, I would just like to pose some questions for us to think about regarding health care. Today, I'd like to talk about common sense issues regarding health care, namely how being healthy is less expensive for your employer, your sister employees, and you.

Think about being at work. You do not have an employer-sponsored health plan or you have one but it isn't all that great. You have to pay each month for this plan, and you can opt out of the plan if you want to. Participation is not mandatory. You opt for the health insurance, and your co-worker, Justine, in the cubicle next to you opts to not take insurance as she cannot afford her part of the premiums. This means that her children and spouse aren't covered either. But, she isn't worried because they're young and in good health.

Justine gets a call at work from one of her children. You can hear her part of the conversation. One of the kids is sick. Nothing to be done. It isn't too bad. The next day, Justine comes to work late because her child is still sick, and she had to find someone to stay with the kid. You and Justine were supposed to start on a project first thing that morning. You had to start on it without her. You and she get to working on the project, and Justine gets a number of phone calls from home. The project should have only taken both of you four hours, but it's the end of the day, and you're still not done. You have to take it home and finish it because, if it isn't finished on time, you lose that account, which means your company loses that account.

It's the next day. Justine is very late this morning. You've had to do her work in addition to your own. Your productivity has been compromised because of her sick child. This continues for a few weeks. Her child is very sick now, and Justine has to take him to the emergency room because the family doesn't have health insurance. Turns out the child has a respiratory disease that could have been treated easily when the child first fell ill. Now, the child will have to stay in the hospital. Justine doesn't know how they will pay for this.

Months go by, Justine's productivity has declined. Clients have complained and are threatening to move their accounts to another company. Justine and her husband are going bankrupt because of the hospital bills. Her husband has taken on another job, which means that the kids will have to be home by themselves because they cannot afford child care.

Justine hasn't been feeling well lately. She's not sure what's wrong, but she can't go see a doctor because she can't afford it. She has missed so much work now that the company decides she has to be let go. The company lost some clients due to Justine's underperforming on their accounts.

So now Justine and her family have no health insurance, they are going bankrupt, she lost her job, and she is very sick. Who will hire her? How will she get health insurance if she gets a new job because she and her child have pre-existing conditions? Besides Justine and her family, who is paying for this lack of health care?

While I may have invented Justine and this scenario, it is unfortunately being played out across the country. Check out http://www.kff.org/uninsured/upload/7806-02.pdf, http://pnhp.org/excessdeaths/health-insurance-and-mortality-in-US-adults.pdf.

Myth #4 in the Series--Dispelling the Six Most Prevalent Myths Regarding Health Care Reform, 1 Myth at a Time

Oh, wait a minute--that's a torte not a tort!

Myth #4
Tort reform is the way to cut costs in our health care system.

Facts
Before investigating this myth, I was one of the legions of underinformed people that believed this one to be true. However, after researching this issue, I have changed my stance. It isn’t that I don’t believe tort reform has merits; it’s just that I don’t think it’s a major factor in the costs of health care in this country. Why? Well, let me tell you.

But first, I’d like to address those people who are called “tenthers,” those who believe health care reform is unconstitutional and is a states’ rights issue. Funny thing is that many of these same people are saying that tort reform is a national issue, not a states’ rights issue. You can’t have it both ways, people. And, I think many “tenthers” don’t know that many states have already instituted tort reforms.

Now on to the tort reform myth. One of the hardest things about researching this one is that there doesn’t seem to be much room for a middle-ground, objective view (I could address the term objective in another blog, but I won’t—I’ll just say a few words. I don’t believe there is pure objectivity. We’re human, therefore we think. [My apologies to René for changing his words.] In thinking, we form opinions. Okay, I’ll stop). I’m talking about the research that is out there—real research, not something from Fox News or the democratic underground. Even the Congressional Budget Office seems to contradict itself. Now I’ll get to some facts.

Did you know that medical malpractice liability is only about 2 percent of our total health care costs? Yes, that’s right—only about 2 percent. Depending on the numbers different researchers use, it is as low as 0.9 percent and goes up to 3 percent. These are the lower and upper limits that I found. Economists and health care researchers have found mixed results related to tort reform. One thing that seems to be consistent, though, is why medical malpractice insurance is so expensive.

That brings us to the insurance companies. In the United States, for-profit insurance companies have driven up the price of malpractice insurance. Did you know that the CEO of WellPoint makes upwards of $9 million dollars a year???? Huh, how does she do that? But I digress--WellPoint is a health insurance company. A comparison that the St. Petersburg Times did of Canadian and American malpractice insurance rates show the differences in costs.

Comparison of malpractice insurance rates
TORONTO
Orthopedic Surgeon $10,485
Obstetrician $36,353
Neurosurgeon $29,233

MIAMI
Orthopedic Surgeon $140,000
Obstetrician $191,000
Neurosurgeon $237,000

TAMPA BAY
Orthopedic Surgeon $72,000
Obstetrician $98,000
Neurosurgeon $121,000

http://www.tampabay.com/news/canada-keeps-malpractice-cost-in-check/1021977

How can Canada keep the costs so low? Their system doesn’t rely on private insurance companies; it’s run by the Canadian Medical Protective Association. Maybe American physicians should follow suit. I don’t think our doctors should be penalized by having to pay such high rates for malpractice insurance. The Congressional Budget Office estimates that “lowering premiums for medical liability insurance by 10 percent would reduce total national health care expenditures by about 0.2 percent.” Page 3, CBO letter to Senator Orrin Hatch, October 9, 2009.

Some researchers have stated that they believe even if tort reform is enacted in all states that it won’t make that much of a difference. This has been shown to be the case in those states that have enacted tort reform. The problem also doesn't seem to be that most doctors practice defensive medicine thereby driving up the costs. The difference between states where there has been tort reform and there hasn't been is negligible as to overall health care costs. So something else is at work. The differences in costs are not enough to make a dent in our overall health care costs. One culprit that most of these researchers point to is the insurance industry. They say that the profit motive is what drives malpractice premiums. Another problem is technology and health care. Technology is expensive, and, as health care consumers, we demand it. This leads to higher health care costs.

I would say that everyone needs to look into these issues. Stop blaming the Democrats for protecting trial lawyers, stop blaming trial lawyers, stop blaming doctors, stop blaming President Obama for everything, stop blaming and start looking at more than one news source for information.
Check out www.pbs.org/newshour/updates/health/july-dec09/, http://www.cgo.gov/, http://www.healthcarereformmyths.org/, http://www.rwjf.org/, http://www.kff.org/, http://www.nchc.org/, http://chppr.iupui.edu/research/healthreformmyths.html .

Insurance Company Severely Cuts Back Coverage on Muscular Dystrophy Victim

An insurance company in New York has severely cut back on a man's, Ian Pearl, health insurance coverage because the company deems it too expensive. An executive with the company said that patients such as Pearl were "dogs" and the company could get rid of them. Mr. Pearl needs round-the-clock care, which is not cheap. Instead of paying, Guardian Life Insurance is just dropping coverage in the state, which is legal. Here is the link to the story:
http://washingtontimes.com/news/2009/oct/14/ny-insurance-company-tries-to-rid-itself-of-high-c/

2010 Will Bring Higher Health Care Costs for Workers

In an article in the Wall Street Journal Online from today, it is projected that employees will see about a 10% increase in their health care costs. This increase and cost includes larger payroll deductions and higher co-payments and other fees. Here is the link to the article: http://online.wsj.com/article/SB10001424052748703790404574471290259603238.html

4-Month-Old Baby Denied Health Coverage

"And now for something completely different..." In the following Denver Post story and Denver Channel 11 news story, a four-month-old infant has been denied health insurance coverage because the insurance company says he is too fat. The baby is a big boy, but he is being breast-fed. The insurance company says that they do not insure babies who are above the 95th percentile for weight and height. Alex Lange is a healthy baby, and his pediatrician has not expressed any concerns for his weight. The insurance company says that his pre-existing condition, obesity, makes him too great a risk. This despite the fact that both of his parents and his older brother are slender. Go figure!

Here is the Denver Post link: http://www.denverpost.com/search/ci_13530098.

Here is the Channel 11 link: http://www.nbc11news.com/localnews/headlines/63813127.html

UPDATE--UPDATE--UPDATE

There was such a backlash against Rocky Mountain Health Plans that the company decided it should probably offer this baby coverage. Never underestimate the power of the Internet and a lot of ticked off people!!

Myth #3 in the Series--Dispelling the Six Most Prevalent Myths Regarding Health Care Reform, 1 Myth at a Time

I'm bringing my blog around to business with this third myth. I do plan to concentrate on health care reform and business later on in my posts.

In addressing myths and health care reform in general, I am concentrating on H.R. 3200 as this is the most talked about bill. There are other health care bills floating about.

Myth #3
Private health insurance would be made illegal, banned by the proposed health care reform.

Facts

This myth has been traced to an editorial that appeared in Investor's Business Daily, and picked up by a number of media outlets. In the editorial, it was claimed that H.R. 3200, page 16, banned private health insurance. This is not what section 102 on page 16 states. Here is that text: SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENTCOVERAGE.
(a) GRANDFATHERED HEALTH INSURANCE COVERAGE DEFINED.—Subject to the succeeding provisions of this section, for purposes of establishing acceptable coverage under this division, the term ‘‘grandfathered health insurance coverage’’ means individual health insurance
coverage that is offered and in force and effect before the first day of Y1 if the following conditions are met:
(1) LIMITATION ON NEW ENROLLMENT.—
(A) IN GENERAL.—Except as provided in this paragraph, the individual health insuranceissuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day of Y1.

Check out the text in the bill here http://peters.house.gov/uploads/HR3200%20Full%20Text.pdf

So, what does this mean? It means that private insurance companies would still offer health insurance, but they would do so through the exchange that we have been hearing about. So, what does this mean? This means that private insurance companies will be able to offer private policies, but they will not be able to exclude people with pre-existing conditions. The Health Insurance Exchange allows for people to comparison shop between the private companies and the public option. Those people who have coverage prior to the implementation, Y1, would be able to keep the plan they have. It would not be yanked out from under them. The bill actually would prohibit some people from going into the public option.

The bottom line is that health care reform would not put private insurers out of business, which is what some people are worried about. I'm worried about the skyrocketing costs associated with not having health care, and I'm worried about the people who cannot afford the exorbitant costs some private insurers charge. Study after study shows that people without health insurance cost the rest us a lot of money.

Think about it--if someone cannot afford health insurance, do they go to a doctor for preventive care? Statistics say, "No." They cannot afford it. So what do they do? They wait until there is an emergency and then go to the emergency room. What happens to too many people that forgo preventive care is that chronic conditions only tend to get worse, and that's when they end up in the E.R. I'm not blaming the people who cannot afford insurance. I think our system, or lack thereof, is to blame.

Sources on this issue that can be checked out are: www.urban.org/publications/901286.html, www.huffingtonpost.com/wires/2009/08/13/debunking-health-care-lie_ws_258883.html, http://www.aarp.org/.

Also, check out Erin Kennedy's blog, http://theupsanddownsofbeingyourownboss.blogspot.com/2009/10/health-insurance-nightmare.html#comments. This post deals with Erin's quest to get health insurance on her own when she was self-employed.