Consumer Power Report #228

Our friends on the left have claimed time and time again that the Congressional Budget Office has declared the new health law is fully funded, it puts Medicare on solid ground, and it reduces the deficit. None of this is true. In January, the CBO released a report (http://www.cbo.gov/ftpdocs/110xx/doc11005/01-22-HI_Fund.pdf) indicating a majority of the Medicare trust fund savings under the new law would be used to pay for other spending and “therefore would not enhance the ability of the government to pay future benefits.” CBO followed up with a letter in March to Congressman Paul Ryan of Wisconsin, stating “the legislation’s effects on the rest of the budget would amount to a net increase in federal deficits of $260 billion” over 10 years.

This week, the CBO released its annual long-term budgetary outlook. Judging by the numbers, the outlook is bleak at best, and devastating at worst, when it comes to our unsustainable entitlement programs. Almost half of the growth in entitlement spending over the next generation comes from the demographic factors associated with the retirement of Baby Boomers. The CBO goes on to show that, due to our aging population, we will see a 45 percent growth in health care entitlement spending alone by 2035. And President Barack Obama told us that health reform was entitlement reform?!

This month we will begin to see new taxes imposed by the new health law. The Heartland Institute’s John Nothdurft has a great piece in the American Spectator discussing the first of these taxes, the 10 percent tax on tanning salons, which went into effect July 1.

Nothdurft notes this is the first of 21 new taxes imposed by Obama’s health care law, and that the tax represents a broken promise to not raise taxes on those making less than $250,000 per year. Unfortunately, the tanning tax is only the beginning. Over the next 10 years, Americans will see $500 billion in new taxes to pay for this new law. Most of these taxes hit the very people Obama vowed to protect during his campaign in 2008.

The new health care law does not rule out turning away sick people. Critics believe the $5 billion high-risk pool program will run out of money before January 1, 2014. The administration says it may not have to turn away any sick people and insists there are several changes that can be made to guarantee the program lasts until 2014. Officials say cuts can come as a result of reducing benefits under the program or redistributing funds among state pools.

Jay Angoff, director of the Office of Consumer Information and Insurance Oversight, said, “There’s a certain amount of money authorized in the statute, and we will do our best to make sure that that amount of money insures as many people as possible and does as much good as possible.”

Apparently it has not been discussed whether Congress will be asked for more money. High-risk insurance pools started accepting applications on July 1.

ER wait times may increase as a result of the nation’s new health care law. The uninsured are not the only users of the ER. In fact, the biggest users of the ER are Medicaid recipients, the number of which will increase by roughly 16 million under the new law, making matters worse. We also face a physician shortage that helps account for long wait times in emergency rooms … and that shortage will be made worse by the health care law.

Dr. Arthur L. Kellermann of RAND Corporation says, “More people will have coverage and will be less afraid to go to the emergency department if they’re sick or hurt and have nowhere else to go. … We just don’t have other places in the system for these folks to go.”

ER crowding has been a long-standing problem in the U.S. A 2009 report by the Government Accountability Office, Congress’s investigative arm, found ER patients who should have been seen immediately waited nearly a half-hour. It is highly unlikely the problem will disappear over night.