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From: Concord Coalition
Health care reform aims to control spending, expand coverage
With rollout of the President's Budget and last week's White House Summit on Health Reform, a major push to (1) expand health coverage and (2) reduce the rapid growth of health care costs is under way.
Reducing the rapid rate of growth in health care costs is a fiscal policy imperative. Rapid cost growth is dramatically boosting government spending on Medicare, Medicaid, Veterans Health Care, TRICARE coverage for military families, and the Children's Health Insurance Program (SCHIP).
The rapidly rising costs of these programs -- especially Medicare and Medicaid -- has led to broad agreement among our nation's top economic officials that the United States is currently on a perilous fiscal path that threatens the long-term stability of the U.S. economy.
Earlier this year, Peter Orszag -- current OMB Director and former CBO Director -- warned the Senate Budget Committee that "over the long term, the federal budget is on an unsustainable path....the principal driver of our long-term deficits is rising health care costs....If costs per enrollee in our two main federal health programs, Medicare and Medicaid, grow at the same rate as they have for the past 40 years, those two programs will increase from about five percent of GDP to 20 percent by 2050. That's roughly the entire size of the federal government today."
Treasury Secretary Geithner has emphasized that rapidly rising U.S. health care costs harm competitiveness in the global market. Health costs in 2009 are projected to consume 17.6% of the U.S. economy (GDP), nearly double spending in other mature (OECD) economies. (Organization for Economic Cooperation and Development)
To begin the health reform process, President Obama's budget proposes to spend at least $634 billion over 10 years on health care reform aimed at making health coverage affordable, researching comparative effectivness of treatments, investing in prevention and wellness, and improving quality of care. The initiatives would be contingent on securing funding from: (1) placing a 28% cap on the tax deductions that upper-income earners can claim; and (2) making $316 billion in reforms to Medicare and Medicaid.
Politically, health care reform will be a heavy lift. The Washington Post reports that opposition to details of the Administration plan have already emerged: strong opposition has emerged to the proposal to cap itemized deductions for upper income earners; AARP opposes raising Medicare prescription premiums on wealthy retirees; major insurers oppose switching the Medicare Advantage program (which markets managed-care plans to seniors) to a competitive bidding process; and home health care providers object to cuts in their Medicare reimbursements.
On limiting itemized deductions, the Administration has asserted it would impact only 1 percent of taxpayers and would have only a modest negative impact on charitable giving.
Tentative Schedule: According to Congress Daily, Senate Finance Chairman Max Baucus (D-MT) is aiming for a June mark-up of health reform legislation in close coordination with HELP Committee Chairman Edward Kennedy (D-MA). The two chairmen are aiming for their respective committees to produce one comprehensive bill.
New White House Health Reform Website
White House Health Care Summit
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