May 12 2010
Below are some useful top line findings GOP staff outlined from an initial review of the document:
• Bends the cost curve up. Bends federal spending curve upward “by a net total of $251 billion” over the next decade.
• Increases national health spending by $311 billion in 2010 through 2019. (page 4)
• If you like what you have, 14 million Americans cannot keep it. About 14 million people would lose their employer coverage by 2019 as smaller employers terminate coverage and workers who currently have employer coverage become enrolled in Medicaid. (Page 7)
• About 20 million Americans still uninsured. An estimated 23 million people would remain uninsured in 2019, roughly 5 million of which would be undocumented aliens and the remainder would be 18 million who choose not to be covered and pay the penalty (Page 8).
• Estimated reductions in the growth rate of health spending “may not be fully achievable” because “Medicare productivity adjustments could become unsustainable even within the next ten years, and over time the reductions in the scope of employer-sponsored health insurance could also become an issue.” (Page 9)
• Medicare cuts may cause providers to drop Medicare. Medicare provider cuts based on economy-wide, non-farm productivity improvements result in Medicare payment rates to grow more slowly than the providers cost of furnishing services to beneficiaries which may cause providers to “end their participation in the program,” and possibly jeopardize access to care for beneficiaries. According to the report 15% of all hospitals, nursing homes and other similar providers could be operating at a loss by 2019. (Page 9/10)
• Some cuts unlikely to be sustained. The growth rate reductions from productivity adjustments (which are the source of a substantial portion of the Medicare savings in the new law) are unlikely to be sustained on an annual basis (page 12)
• Some cost containment measures to have “negligible impact.” The other Medicare savings provisions in the bill that are intended to help control future health care cost growth will have a “negligible financial impact over the next 10 years” (Page 13)
• CLASS Act is indeed a ponzi scheme. Regarding the CLASS Act long term care insurance program, OACT concludes that it faces “a significant risk of failure as a result of adverse selection by participants,” resulting in “a very serious risk that the problem of adverse selection will make the CLASS program unsustainable.” (Page 15)
• Consumers will face higher costs for premiums, drugs, devices. The new fees and excise taxes will “generally be passed through to health consumers in the form of higher drug and devices prices and higher premiums” and will increase national health expenditures. (page 17)
• High Risk Pools face significant trouble. The report notes that the funds allocated under the new law for High Risk Pools is likely to be insufficient, and would be exhausted by 2012 (two years before the start of the new subsidies). This could in turn necessitate substantial premium increases to sustain the program (page 16)
• Over half the uninsured go into Medicaid. A little more than one-half of those estimated to become insured as a result of PPACA in 2019, 18 million people, would receive their coverage through Medicaid. For these individuals, the report notes that as a result of more physicians refusing to treat Medicaid patients, it is reasonable to expect that a significant portion of the increased demand for Medicaid could be difficult to meet. (Page 20)
• Businesses will pay nearly $90 BILLION in taxes, over just 5 years. Businesses would pay $87 billion in penalties between 2014-2019
For CMS memo on the financial effects of the "Patients Protection and Affordable Care Act", click here.
For CMS memo on the effect of the "Patients Protection and Affordable Care Act" on Hospital Insurance (HI) trust funds, click here.