November 27, 2015

Posts on health care

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Wednesday, October 31, 2012 - 8:32 AM

This is Part II of a two-part series of posts on the presidential candidates' fiscal policies. Part I examines Governor Romney's plans.

The first part of this blog post series looked at the unanswered questions in Governor Romney’s overall fiscal policy, tax reform plans and health care reform plans. This second part will look at President Obama’s budget plans in addition to some areas of uncertainty.

Simply by virtue of being the President, with the requirement to submit an annual budget, Obama has had to provide more details about his fiscal plans. Yet, what those details clearly show is an inadequate long-term fiscal goal. Over ten years, federal debt held by the public would only stabilize temporarily, and at a higher level than it is today.

To the President’s credit, he supports negotiating a long-term, bipartisan “grand bargain” on fiscal issues with both spending cuts and new revenues. Yet, such explicit support has come only after his initial tepid reaction to the Simpson-Bowles report when it was released. Nevertheless, if Obama is re-elected, the upcoming...

Wednesday, October 31, 2012 - 8:31 AM

This is Part I of a two-part series of posts on the presidential candidates' fiscal policies. Part II examines President Obama's plans.

As election day approaches, it is appropriate to look at what we know and what we don’t know about the two candidates’ fiscal policy proposals -- especially since it is unlikely we will get any more details prior to election day.

In many respects, the crucial differences between the two candidates are defined by their fiscal policies, and it is almost certain that the winning candidate’s fiscal policy choices will be as immediately consequential as any president’s in history.

In this blog post, I will review Governor Romney’s proposals and in Part II, I will cover the President’s proposals looking at three key areas: The overall budget goal, tax policy and health care.

It is difficult to overstate how little we know about where Governor Romney’s policies will lead. The basic problem is that he has...

Saturday, August 11, 2012 - 3:30 PM

Here are links to some previously published material by The Concord Coalition on proposals by House Budget Chairman Paul Ryan, who was named Saturday as Republican presidential candidate Mitt Romney's running mate.

Politico Op-Ed by Robert L. Bixby (April 17, 2012)

Concord Coalition Analysis of Ryan Budget Plan (March 20, 2012)

Blog Post by Robert L. Bixby on Wyden-Ryan Medicare Plan (Dec. 20, 2011)

Blog Post by Robert L. Bixby on Medicare Proposals (May 31, 2011)

Blog Post by Robert L. Bixby Comparing Obama and Ryan Budget Proposals (April 12, 2011)



Saturday, August 11, 2012 - 2:46 PM


This commentary originally appeared on The Concord Square May 31, 2011

As a matter of controlling Medicare costs, I find myself liking a bit of Rep. Paul Ryan’s approach and a bit of President Obama’s. Too bad the political climate is such that Democrats and Republicans don’t seem willing to acknowledge that the other might just have a good idea.

In Ryan’s favor, I think the premium support model holds out the best hope for reining in cost growth. It would allow us to set a Medicare “budget” and create incentives for a more efficient system. Without a budget, I worry that efficiencies found in the pilot programs and demonstration projects enacted last year will not be translated into real savings. Of course for premium support to work, the level of support and growth rate have to be realistic. In this regard, I’m with those who think that Ryan’s plan misses the mark. However, the concept should not be rejected just because the details are flawed.

Even if we move toward premium support, we should have a back-up mechanism to ensure that targets are met and that quality of care is improving. President Obama’s suggestion to strengthen the Independent Payment Advisory Board (IPAB) would fill this role. It’s pretty clear that politicians are not the best at cutting health care costs. If...

Tuesday, July 24, 2012 - 3:14 PM

The Congressional Budget Office (CBO) today estimated that repealing the 2010 Affordable Care Act (ACA) would increase federal budget deficits between next year and 2022 by around $109 billion, only a small change from previous estimates. The CBO suggests that this can also be considered a rough estimate for how much the ACA reduces the deficit over the same time period.

The CBO cautions, however, that its estimates are uncertain because the projected effects of the law are themselves “highly uncertain.” The law contains some provisions that are projected to cost the government money, but others that would save money or provide additional revenue.

Also updated were CBO’s estimates of the budgetary effects of just the ACA’s health insurance coverage provisions in light of last month’s Supreme Court decision, which allows states to choose whether or not to expand eligibility for coverage under their Medicaid programs.

The budget office now estimates that these coverage provisions would have a net cost of $1,168 billion from 2012 to 2022, a net reduction of about $84 billion from estimates last March. This slightly reduced spending would come about because even with some states opting out of the relatively cheap Medicaid expansion and pushing some...

Wednesday, June 13, 2012 - 2:36 PM

The Medicare actuaries have just updated their projections for National Health Expenditures (NHE) and the overall picture they illustrate is a welcome one, but likely reflects temporary factors and cannot serve as an excuse for politicans to rest on their laurels.

On the plus side, health care cost inflation has slowed pretty dramatically over the last three years (2009-2011) and is also projected to be slower than normal for 2012 and 2013 -- with those costs staying nearly constant as a percent of GDP throughout the entire time period (around 17.9 percent). Furthermore, while spending is projected to jump in 2014, as the major health insurance provisions of the Affordable Care Act (ACA) extend coverage to approximately 22 million people, over the period 2011-2021 spending is projected to grow at an annual average of 0.9 percent above GDP growth. This is good news because most budget experts consider health care cost growth of 1 percent over GDP the "gold standard" for a tough, but theoretically obtainable, spending target. (Historically, health care costs have risen 2 percentage points faster than GDP.)

The actuaries suggest most of the recent slowdown in health care spending can be attributed to the recession and...

Tuesday, May 22, 2012 - 11:01 AM

In late April, the Medicare Trustees released an annual report on the financial status of the program. In their report, the trustees are required to analyze where Medicare costs are heading based on a strict reading of current law. However, there are numerous reasons to believe that these numbers do not give the full picture. As noted by the trustees, “Medicare’s actual future costs are highly uncertain and are likely to exceed those shown by the current-law projections in this report.”

To illustrate the cost picture more fully, the Medicare actuaries just released their updated 2012 “Illustrated Alternative Scenarios” which examine some of the shortcomings of the official Medicare projections.

 Medicare Cost Projection Percent of GDP 
  2030 2080
2009 (PRE-ACA) Trustees' Official Projection 6.26% 10.69%
2012 TRUSTEES' Official...
Monday, March 19, 2012 - 11:02 AM

There has been a lot of confusion recently about whether the Affordable Care Act (ACA), the health care reform legislation passed in 2010, is now projected to cost substantially more than previously estimated.

The short answer is no -- the costs are still tracking pretty closely to the trajectory projected by the Congressional Budget Office (CBO) in 2010. The main reasons for the recent confusion involve a new estimate from the CBO and the fact that it has been two years since the legislation passed, putting us two years closer to the time it will be fully implemented.

The CBO just updated its cost estimate of one particular part of the ACA, the part dealing with insurance coverage. This part of the legislation will require nearly all Americans to obtain health insurance coverage and creates the exchanges, subsidies, and expanded Medicaid program that will provide the new coverage. Most of these measures fully come online beginning in 2014 and involve new spending that CBO accounts for as the “gross costs” of the insurance provisions. This part of the legislation also brings in new revenue to the government in the form of penalty payments and, starting in 2018, an excise tax on high-cost insurance plans. Once CBO takes these revenues into account, it creates a “net cost” of the coverage provisions.  ...

Monday, March 12, 2012 - 11:14 AM

Last week two committees in the House of Representatives voted to repeal the Independent Payment Advisory Board (IPAB). This is an alarming attempt to undo a key cost-saving enforcement mechanism without putting anything else in its place.

You may recall that the IPAB was created by the Affordable Care Act (ACA – aka “health care reform”) to reduce the growth in Medicare spending through the use of a spending-target system and a fast-track legislative process. 

The Concord Coalition has long supported the IPAB because it provides a crucial backstop to ensure federal health care savings from the ACA. (See here and here).

The ACA imposed cuts to Medicare, raised some taxes and fees, and created a penalty for people who don’t buy insurance. The legislation also created pilot projects and experiments to determine how to help curb the growth of health care costs. The IPAB was designed to ensure that the Medicare cuts -- or others that would achieve the same level of savings -- will go into effect. The IPAB will also make it less likely that parochial political interests will be able to...

Tuesday, December 20, 2011 - 2:13 PM

The demise of the deficit reduction super committee left many people wondering whether the polarized atmosphere in Washington has made it impossible for Republicans and Democrats to reach agreement on the thorniest issues that must be resolved to achieve a fiscal sustainability plan.  

So it was heartening last week to see a bipartisan pair of prominent lawmakers – Sen. Ron Wyden (D-Ore.) and Rep. Paul Ryan (R-Wis.) -- release a joint Medicare reform proposal.

At its core is the concept of “premium support” (Wyden and Ryan call it “coverage support”) in which the federal government would pay a set amount to subsidize Medicare premiums. Beneficiaries could elect to remain in the traditional Medicare program or purchase their health insurance on an “exchange” of approved plans, which would be required to offer “at least as comprehensive a benefit as traditional fee-for-service Medicare.” The plans would also be required to issue policies to all seniors who apply (i.e., guaranteed issue).

The level of support would be determined through a competitive bidding process similar to the one currently used to set premiums for the Medicare prescription drug benefit (Part D). There would be a cap on out-of-pocket expenses (catastrophic coverage), and the coverage support “would be adjusted to provide additional...