Promise Made, Promise Broken:
The First Three Months of Health Care "Reform"
Jun 23, 2010 -
Three months after President Obama signed Democrats’ government takeover of health care into law, evidence keeps mounting that his rhetoric surrounding health “reform” does not match the new reality. The American people face higher taxes, higher health costs, and dropped coverage as a result of the law:
Promise Made: “I will not sign a plan that adds one dime to our deficits—either now or in the future.”
— President Obama, speech to a joint session of Congress, September 9, 2009[i]
Promise Broken: In May, the Congressional Budget Office (CBO) released an analysis of the health care law that found that it will increase federal discretionary spending by at least $115 billion—costs not taken into account by Democrats before they passed the health bill into law.[ii] Without cuts to some other part of the federal budget, these spending increases will necessarily add to deficits. Several weeks later, CBO Director Doug Elmendorf concluded that fiscal sustainability could be achieved only by cutting elements of the health care law just enacted: “Putting the federal budget on a sustainable path would almost certainly require a significant reduction in the growth of federal health spending relative to current law (including this year’s health legislation).”[iii]
Promise Made: “If any bill arrives from Congress that is not controlling costs, that’s not a bill I can support. It’s going to have to control costs.”
— President Obama, June 23, 2009[iv]
Promise Broken: In April, the chief actuary of the Centers for Medicare and Medicaid Services (CMS) released a report concluding that the federal government and the country will spend $310 billion more under the new law than we would have without it.[v] The actuary found that most provisions in the law intended to control future health care costs will have “a negligible financial impact.”[vi]
Promise Made: “What I’m saying is, the government is not going to make you change plans under health reform.”
— President Obama, June 23, 2009[vii]
Promise Broken: The bad news for Americans who like their current coverage has been pouring in. For those with employer coverage, the Administration released a rule estimating that 51 percent of all employees, and 66 percent of workers in small businesses, would lose their current plan by 2013—less than three years from now.[viii] For those currently purchasing their own coverage, new regulations could result in “several million enrollees who have to shop and apply for coverage elsewhere.”[ix] For retirees with coverage from their former employers, one study found that the new law’s elimination of a tax subsidy could result in as many as two million retirees losing their drug coverage.[x] And for the millions of seniors in Medicare Advantage (MA), the CMS Actuary projected that “enrollment in MA plans will be lower by about 50 percent.”[xi] Just this week, one insurance carrier announced it would stop offering its national MA plan effective next year, leaving 92,000 seniors without their current coverage[xii]—the first of many similar announcements harming seniors in MA plans over future years.
Promise Made: “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”
— Barack Obama, Rally in Dover, NH, September 12, 2008[xiii]
Promise Broken: In April, the CBO found that at least three million of the 3.9 million people expected to pay tax penalties under the individual mandate will be families making less than $250,000.[xiv] The mandate is just one of 12 separate tax increases on the middle-class as a result of the health care law.[xv]
Promise Made: “For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase.”
— President Obama, September 20, 2009[xvi]
Promise Broken: In an attempt to head off a court challenge to its constitutionally dubious mandate that all individuals purchase health insurance, the Obama Administration recently filed a brief justifying the mandate on the grounds that it is in fact a tax increase.[xvii] The brief also notes that the mandate “will raise substantial revenue”—meaning that the Administration concedes this tax increase is a large one.[xviii]
Promise Made: “The plan I’m proposing will cost around $900 billion over ten years.”
— President Obama, speech to a joint session of Congress, September 9, 2009[xix]
Promise Broken: The CBO found that the legislation spends $938 billion on health insurance subsidies alone, and another $93.9 billion in other mandatory federal spending—more than $1 trillion total, not even counting new discretionary spending.[xx] And the CMS actuary also considered some of the Medicare savings provisions “unsustainable,” meaning that spending may rise even higher if Congress is forced to override some of the law’s unrealistic spending cuts.
Promise Made: “I think the health care debate as it unfolded legitimately raised concerns not just among my opponents, but also amongst supporters that we just don't know what's going on. And it's an ugly process and it looks like there are a bunch of back room deals.”
— President Obama, ABC television interview, January 25, 2010[xxi]
Promise Broken: Under new insurance rules promulgated by the Administration this month, small businesses cannot change their insurance carrier without becoming subject to the health law’s myriad new regulations—but union plans face no such prohibition.[xxii] Just as with the notorious backroom deals previously negotiated behind closed doors,[xxiii] this latest sweetheart deal for unions was not subjected to public scrutiny before being announced.
These new revelations about the health care law’s ill effects—and the way in which ordinary families will be harmed by the legislation—will only add to the dissatisfaction with the unpopular health care law. Millions of Americans are asking: If President Obama and Democrats had to break so many promises to enact this legislation, how good can this government takeover of health care be?
[ii] Congressional Budget Office, Letter to the Honorable Jerry Lewis regarding the effects of H.R. 3590, May 11, 2010, http://www.cbo.gov/ftpdocs/114xx/doc11490/LewisLtr_HR3590.pdf
[iii] Douglas Elmendorf, presentation to the Institute of Medicine on health costs and the federal budget, May 26, 2010, http://www.cbo.gov/ftpdocs/115xx/doc11544/Presentation5-26-10.pdf (author’s emphasis)
[iv] Press Conference by the President, June 23, 2009, http://www.whitehouse.gov/the-press-office/press-conference-president-6-23-09
[v] Richard Foster, Centers for Medicare and Medicaid Services, Estimated Financial Effects of the “Patient Protection and Affordable Care Act,” as amended, April 22, 2010, http://www.cms.gov/ActuarialStudies/Downloads/PPACA_2010-04-22.pdf
[vii] Press Conference by the President, June 23, 2009, http://www.whitehouse.gov/the-press-office/press-conference-president-6-23-09
[viii] Interim final rule by Departments of Labor, Treasury, and Health and Human Services regarding grandfathered health insurance status, Federal Register June 17, 2010, http://edocket.access.gpo.gov/2010/pdf/2010-14488.pdf, Table 3, p. 54
[ix] “Seeing Threat to Individual Policies, State Officials Urge a Gradual Route to Change” by Robert Pear, New York Times June 15, 2010, http://www.nytimes.com/2010/06/15/health/policy/15health.html
[x] “Assessing the Coverage and Budgetary Implications of Legislation Modifying the Deductibility of Retiree Drug Spending Eligible for Subsidies,” American Benefits Council report by The Moran Company, March 16, 2010, http://www.americanbenefitscouncil.org/documents/hcr_rds-report_031610.pdf, p. 5
[xi] Richard Foster letter, estimated financial effects of PPACA
[xii] “Cigna to Exit National Medicare Advantage Private FFS Market in 2011,” FierceHealthPayer June 22, 2010, http://www.fiercehealthpayer.com/story/cigna-exit-national-medicare-advantage-private-ffs-market-2011/2010-06-21?utm_medium=nl&utm_source=internal
[xiv] Congressional Budget Office, estimated distribution of individual mandate penalties in P.L. 111-148, April 22, 2010, http://cbo.gov/ftpdocs/113xx/doc11379/Individual_Mandate_Penalties-04-22.pdf. Based on a 2009 poverty level of $72,850 for a couple; see http://aspe.hhs.gov/poverty/09poverty.shtml.
[xv] Ways and Means Committee Republican staff analysis based on Joint Committee on Taxation data, http://republicans.waysandmeans.house.gov/UploadedFiles/DemTaxIncreases1.pdf
[xvi] Interview with George Stephanopoulos, http://abcnews.go.com/print?id=8618937
[xvii] Memorandum in support of defendants’ motion to dismiss, Florida v. HHS, June 16, 2010, p. 50
[xviii] Ibid., p. 5
[xx] CBO of H.R. 4872 in concert with H.R. 3590, March 20, 2010, http://cbo.gov/ftpdocs/113xx/doc11379/AmendReconProp.pdf
[xxi] Full interview transcript available at http://abcnews.go.com/print?id=9659064.
[xxii] “Union Contract Can Exempt Health Plan from ObamaCare” by David Hogberg and Sean Higgins, Investor’s Business Daily June 15, 2010, http://www.investors.com/NewsAndAnalysis/Article/537289/201006141911/Union-Contract-Can-Exempt-Health-Plan-From-ObamaCare.aspx
[xxiii] See, for instance, the RPC reading guide to the backroom deals in the Senate health bill, available here.
This document courtesy of the Republican Policy Committee.