Posted by IQ HSA on April 27, 2010 · Leave a Comment
Health Care Reform – History Of Fiscal Folly
As Statesman and Philosopher Sir Edmund Burke once stated “Those who don't know history are destined to repeat it.” This quote speaks volumes when you put into perspective of the present day fiasco of Massachusetts attempt at Health Care Reform and the past Health Care Reform efforts in Tennessee.
As spectacular failures go, it's hard to do worse than Tennessee. The Volunteer State's early attempt to dramatically increase health insurance coverage, dubbed TennCare, started off promisingly, says Peter Suderman, an associate editor at the Reason Foundation.
· In 1994, the first year of its operation, the system added half a million new individuals to its rolls.
· Premiums were cheap — just $2.74 per month for people right above the poverty line — and liberal policy wonks loved it.
· The Urban Institute, for example, gave it good marks for "improving health insurance coverage of the uninsurable or high-risk individuals with very limited access to private health insurance coverage."
· At its peak, the program covered 1.4 million individuals — nearly a quarter of the state's population and more than any other state's Medicaid program — leaving just 6 percent of the state's population uninsured.
But those benefits came at a high price, says Suderman. By 2001, the system's costs were growing faster than the state budget. The drive to increase coverage had not been matched by the drive to control costs. Vivian Riefberg, a partner at consulting firm McKinsey & Company, described it as having "almost across the board, no limits on scope and duration of coverage." Spending on drug coverage, in particular, had gone out of control:
· The state topped the nation in prescription drug use, and the program put no cap on how many prescription drugs a patient could receive.
· The result was that, by 2004, TennCare's drug benefits cost the state more than its entire higher education program.
· Meanwhile, in 1998, the program was opened to individuals at twice the poverty level, even if they had access to employer-provided insurance.
In other words, the health insurance program's costs were uncontrolled and unsustainable, says Suderman:
· By 2004, the budget had jumped from $2.6 billion to $6.9 billion, and it accounted for a quarter of the state's appropriations.
· A McKinsey report projected that the program's costs could hit $12.8 billion by 2008, consuming 36 percent of state appropriations and 91 percent of new state tax revenues.
Source: Peter Suderman, "Health Care's History of Fiscal Folly; Expanding health insurance coverage busted state budgets. Will it bust the federal budget too?" Wall Street Journal, April 23, 2010.
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Posted by IQ HSA on April 22, 2010 · Leave a Comment
Health Care Reform – Democrats Admit Premiums to Rise
Wednesday, April 21, 2010
Today, the New York Times reports Democrats are scrambling to prevent the predicted health insurance premium increases that are coming for millions of families as a result of their big government health care Insurance Reform overhaul. Just one month after becoming law, Democrats, “fearing that health insurance premiums may shoot up in the next few years,” are attempting to “fix” the new law that they promised would make health care more affordable. Unfortunately, when it comes to fixing health care, Democrats invariably rely on giving the government more authority and control.
Americans and Congressional Republicans have repeatedly cited the rising cost of health insurance as their number one concern related to health care, but after spending one trillion dollars, cutting Medicare by one-half trillion dollars and increasing taxes by over one-half trillion dollars, the Democrats’ health care reform overhaul law fails to make health insurance coverage more affordable. The Congressional Budget Office (CBO) has repeatedly warned that the Democrats’ plan would increase health insurance premiums, something the Democrats now realize, as reported by the New York Times. Conversely, CBO predicted the Republican Alternative would actually lower health insurance premiums without increasing the deficit, cutting Medicare, or raising taxes.
Impact on Individual Health Insurance Market Premiums in 2016
Under Various Democrat Proposals According to CBO
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Proposal
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Change in Health Insurance Premiums Compared to Current Law Projections
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Senate Democrats’ Bill (H.R. 3590)*
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$2,100 increase
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House Democrats’ Bill (H.R. 3962)**
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$1,900 increase
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House Republican Bill (H.R. 4038)***
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$1,050 decrease
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President Obama asserted that under the Democrats’ scheme, “you’re going to be able to get lower costs.” The President and Congressional Democrats also promised under the new law seniors’ Medicare would be unharmed, middle class taxes would not go up and the law would not increase the deficit. In the rush to score a political win, what else weren’t the Democrats being forthcoming about regarding health care reform?
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