Budget Analysis Of The Senate's Healthcare Reform Bill

Just like it took most of the almost 2 years of the last Presidential election campaign to drag out of BO just what he stood for & what he was preparing to do to America if elected the details of the Patient Protection and Affordable Care Act incorporating the so-called manager's amendment are also slowly being uncovered.  This is the bill that passed the Senate on Christmas Eve.  It will be the lead document in the negotiations in the House-Senate conference next week.

Thanks to the Congressional Budget Office (CBO) & Rove.com the above table shows in billions of dollars the projected tax increases ($517.7), Medicare Cuts ($475.3), & Spending - for subsidies, etc. ($882) that result in a projected deficit reduction of $111 billion (not counting interest) between 2010 & 2019.

CBO & the Joint Committee on Taxation (JCT) estimate that by 2019 the number of nonelderly people who are uninsured would be reduced by about 31 million leaving about 23 million nonelderly residents uninsured (about one-third of whom would be illegal immigrants).  Under the above legislation, the share of legal nonelderly residents with insurance coverage would rise from about 83 percent currently to about 94 percent.  Approximately 26 million people would purchase their own coverage through the new government insurance exchanges (Plan B toward obtaining the goal of universal coverage) & there would be roughly 15 million more enrollees in Medicaid & CHIP than is projected under current law. 

 

Now you can do your own analysis of the numbers in the table but here are a few points that you should consider in determining how important this issue is to your livelihood & health:

 

1.  Are the reductions in uninsured people summarized above worth the $517.7 billion in increased taxes in a nascent recovering economy?

 

2.  Are the reductions in uninsured people summarized above worth the $475.3 billion in Medicare cuts to doctors, hospitals, & the elderly?  For those of us who do not believe that Medicare cuts will take place then throw the $111 billion in deficit reduction out & you can see what will be added to our national debt by the above legislation.  On the other hand statistics show that many senior citizens spend an overwhelming majority of their lifetime healthcare expenditures during the last year or less of their lives.  Accordingly, denying medical treatment through Medicare cuts to the elderly is one of the best ways to make BO's budget projections be accurate.  Choose your poison.

 

3.  The first Medicare cuts go into effect right after the 2010 election - just how dumb are we?

 

4.  Any significant spending on subsidy benefits for the uninsured do not go into effect until the fifth year of the program so there are ten years of revenue collection & only six years of meaningful spending which makes the first ten years of the program look better from a deficit standpoint.  If you didn't know the answer it would make you wonder what all of the healthcare reform rush has been about.

 

5.  Look @ the magnitude of the numbers as they increase to the ones shown in 2019 & make you own projections of what happens after that.  Parts A & B of Medicare & in particular their respective Hospital Insurance Trust Fund & Supplemental Medical Insurance Trust Fund have been projected for years to be exhausted any where from 2016 to 2019 meaning that the balance in the trust funds will decline to zero.  Now we all know that the these trust funds are essentially accounting mechanisms.  Any cash generated when there is an excess of receipts over spending is not retained by the trust funds; rather, it is turned over to the Treasury, which provides government bonds to the trust funds in exchange & uses the cash to finance the government's ongoing activities including earmarks like building bridges to nowhere in Alaska.  However, these trust funds are not currently running annual surpluses & are therefore just another Ponzi scheme of musical chairs where you don't have to guess who will be standing (out of luck) when the music stops.  There are far greater consequences to the world here than just to yourself, your children, & your grandchildren.