New challenges face the health care system, the federal government and the American public now that elected representatives have completed action on historic health care legislation.
President Obama signed the main health care bill into law early last week; two days later Congress gave final approval to a "reconciliation" package of changes that had been previously negotiated by the White House and congressional leaders. Deep partisanship remained on display as Republicans delayed the final Senate vote with a flurry of procedural objections and amendments that had no hope of passage.
The reconciliation package included an overhaul of loan programs for college students. Like the health care reform legislation, the student-loan overhaul saved the government some money but then directed most of the savings into additional spending.
The new health plan promises to increase the number of Americans with health insurance by 32 million. As The Concord Coalition has repeatedly argued, however, such an expansion in coverage makes it even more critical for doctors, hospitals, patients, insurance companies and federal agencies to work together to curb rising medical costs.
Similarly, persistent tuition increases above the general inflation rate must be addressed. These increases are leaving young people with heavy debts and putting pressure on Washington to increase student aid programs. The new legislation, for example, will raise the maximum Pell grant to $5,900 over the next decade, up from $5,500 for the coming school year. Yet that will cover only a small portion of the expected tuition increases over that period.
The Congressional Budget Office estimates that the new health care plan, through tax increases and funding cuts, could cut federal deficits by a total of $124 billion over the next 10 years. While such deficit reduction would be welcome, that estimate assumes there will be no backsliding from some very ambitious Medicare cost savings. Moreover, more than half of the promised deficit reduction ($70 billion) comes from premiums dedicated to future benefit payments for a new long-term care entitlement (CLASS).
And even if all goes according to plan, $124 billion in deficit reduction is just a drop in the bucket compared to the trillions of dollars in addition debt that the United States is expected to rack up in the next decade. So the President and Congress must continue to search for more substantial deficit reduction. Furthermore, Washington must eventually pursue legislation in which deficit reduction is the primary goal.