Obama Disputes Studies Saying Overhaul Will Cost Trillions

Published July 31, 2009

President Barack Obama has joined proponents of a health care overhaul bill in criticizing an official government organization’s assessment of how much the proposal would cost American taxpayers.

The nonpartisan Congressional Budget Office, an arm of the legislative branch responsible for providing economic and budgetary analyses, evaluated the draft of the Affordable Health Choices Act released at the beginning of June. The agency “scored” the bill at $1.6 trillion, a staggering cost in light of proponents’ claims the overhaul would not cost anything because of offsetting health care savings.

The CBO also concluded the bill would insure only 16 million of the 45 million currently uninsured Americans.

CBO Criticized

Obama responded to the CBO’s scoring by calling it “unfair.” Sen. Chris Dodd (D-CT), a member of the Health, Education, Labor, and Pensions Committee, maintained the agency failed to take into account the expected savings from chronic disease prevention, a reduction in funding for elderly care, and other programs in the bill. “You don’t get the benefit in CBO of cost-savings with prevention programs,” Dodd told reporters in June.

In a June 24 press conference Obama attacked the CBO for failing to recognize “about two-thirds of the cost would be covered by reallocating dollars that are already in the health care system—taxpayers are already paying for it—but it’s not going to stuff that’s making you healthier.”

Obama also said the CBO was “not willing to credit us with … savings that may come from prevention, may come from eliminating all the paperwork and bureaucracy because we’ve put forward health IT; it doesn’t come from the evidence-based care and changes in reimbursement.”

Pelosi Frustrated

House Speaker Nancy Pelosi (D-CA) joined Obama and Dodd in expressing frustration with the CBO for what she saw as a failure to embrace the cost-saving power of preventive care. “It’s always been a source of, yes I will say frustration, for many of us in Congress that the CBO will always give you the worst-case scenario on one initiative and never … any credit for anything that happens if you have early intervention,” Pelosi told reporters at a June 17 press conference.

Prevention is good policy but won’t make a major financial impact, says J.P. Wieske, director of state affairs at the Council for Affordable Health Insurance. “The emphasis on prevention is positive in that tests and treatments like mammograms and diabetes screenings both save and improve lives, but on a macroeconomic level they do not save money,” said Wieske. “There is no evidence that spending millions more on the healthy will actually cut costs on the unhealthy.”

Rationing Predicted

Wieske says the “reallocation” touted by Obama as a major cost-saver will amount to little more than the rationing of care to the elderly and sick.

“In our rush to ‘prevent’ health problems and fund the healthy, we will end up punishing the sick and elderly by limiting their care,” Wieske said.

“Rationing is on the way thanks to legislation like this,” said Twila Brase, president of the Citizens’ Council on Health Care. “The government’s answer to out-of-control health care costs is to expand its authority over the system and to begin denying care and treatments to individuals who it determines would cost too much or be too inconvenient to treat.”

Brase continued, “The elderly, who make up the enrollment of the already-underwater Medicare program, and the chronically ill will naturally be the first to be denied lifesaving and life-extending health care by a government more interested in its own power and bottom line than in actually providing effective health care.”

Dr. Eric Novack, a practicing orthopedist and radio talk show host, agreed. “The savings the president does propose, such as the nearly $600 billion he claims will be saved in Medicare and Medicaid, will be in the form of regular and repeated denial of care, particularly for senior citizens.”

Medicare currently owes $32 trillion in benefits to Americans who have paid into the system, according to the federal Centers for Medicare and Medicaid Services.

Figures Likely Understated

“The president should be concerned that the CBO is more likely to be severely understating the true costs of health care reform, given the government’s track record of predicting future costs of programs,” said Novack. “Take Medicare for example. By 1990 it cost 10 times what the government predicted at its inception in 1965.”

An evaluation of the Affordable Health Choices Act by Health Systems Innovations, a health care consulting and analysis firm, put the cost of the bill at $4.1 trillion, more than twice the amount estimated by the CBO. Devon Herrick, Ph.D., a senior fellow and health economist at the National Center for Policy Analysis, noted, “President Obama got off lucky with the CBO report.”

The Health Systems Innovations study found “there are no provisions in the legislation to offset” the $4.1 trillion cost. The study, which disagreed with the CBO on the number of people the overhaul bill would add to the rolls of the insured, concluded the bill would cover 99 percent of currently uninsured Americans.

The study also estimated the public coverage option included in the bill, which offers government-backed, taxpayer-subsidized insurance, would be so successful in attracting Americans who already have private coverage it would eliminate 79 million existing policies with private insurers.

Joe Emanuel ([email protected]) writes from Georgia.

For more information …

Affordable Health Choices Act: http://help.senate.gov/BAI09A84_xml.pdf

“The Impact of the 2009 Affordable Health Choices Act,” Health Systems Innovations: http://www.hsinetwork.com/HSI_Report_on_Kennedy_06-13-2009.pdf