WP: CBO says health care repeal would deepen deficit

[PeterMP]

Actually this last year which was partially covered by the Obama care reform experienced the smallest increase in medical spending in 50 years.

I don't think that had anything to do with the reform. The combination of low inflation increases, the recession (your link talks about people skipping doctors visits), and the slower rate of the TOTAL prescription drugs (which has been happening for several years (http://www.nytimes.com/2007/09/21/business/worldbusiness/21iht-drug.1.7593122.html)) is a much better explanation.

[JMS]

I don't understand your argument. The links you have provided me do not in any way support your claim that there is a cap placed on profits. The fact is there is no such cap. What is true is that they are lowering the amount companies are allowed to spend on overhead and administrative costs and are also limiting selective practices. These two combined are aimed at making insurance more fair for participants and may in turn limit profits of these companies. However, it is also possible that profits will increase since a "mandate" will force these companies to take on more subscribers.

The link provided quoted chapter and verse where the cap is located in the healthcare reform package..

The new health care law adds a new Section 2718 to the Public Health Service Act setting out that health insurance companies, starting in September 2010 and through the end of 2013, will be required to refund all enrollees the amount by which premium revenue expended for non-claims costs exceeds 20% for group policies and 25% for individual policies.

http://www.medicaltourismcity.com/pr...-limitation-on

Profit is a non-claim cost along with lobbying, salaries, advertising and junkets to your local hooters restaurant.

[shk75]

The link provided quoted chapter and verse where the cap is located in the healthcare reform package..

Profit is a non-claim cost along with lobbying, salaries, advertising and junkets to your local hooters restaurant.

Yes but you see that cost is EXACTLY the cost I detailed earlier. It is the non medical loss cost which I stated earlier was 20%.

[JMS]

I don't think that had anything to do with the reform. The combination of low inflation increases, the recession (your link talks about people skipping doctors visits), and the slower rate of the TOTAL prescription drugs (which has been happening for several years (http://www.nytimes.com/2007/09/21/business/worldbusiness/21iht-drug.1.7593122.html)) is a much better explanation.

Yes pete, I take your point. But you will note I was responding to someone who stated that healthcare costs were soaring because of Obama care. By noting that actual increases in medical spending were down signficantly to a 50 year low.

Perhaps you are correct that the low expenditures are unrleated to Obamacare which only slightly were in effect in 2010. But certainly we can agree that the reduced increase in medical costs show that the healthcare costs did not dramatically increase in 2010 because of Obamacare.

---------- Post added January-7th-2011 at 02:58 PM ----------

Yes but you see that cost is EXACTLY the cost I detailed earlier. It is the non medical loss cost which I stated earlier was 20%.

To recap....

Yes I did not know the percentage or when it kicked in.

You knew the percentage but weren't sure of a source, what was covered, or when it kicked in.

I subsiquently found a link which confirmed and clarified your number. ( 20% for groups, 25% for individual policies ). The new link also agreed with me that all non claim costs were capped; including profits, employee salaries, office space, travel costs, lobying, and executive golden parachutes. It also said the cap took effect last september.

I don't understand your argument. The links you have provided me do not in any way support your claim that there is a cap placed on profits. The fact is there is no such cap. What is true is that they are lowering the amount companies are allowed to spend on overhead and administrative costs and are also limiting selective practices. These two combined are aimed at making insurance more fair for participants and may in turn limit profits of these companies.

So we agree then that you were in error saying my quote didn't prove support my statement that all non claims expenses were caped, including profits.

which is really significant and something that I was unaware of during the healthcare debate. That's some teeth right there. I mean when you consider that in 2009 there were what 8 registared healthcare lobbiests for every membor of the congress.

http://thecommonprogressive.blogspot.com/2010/02/health-care-eight-lobbyists-per-every.html

[Destino]

I don't care if it did improve the deficit situation. It would have to be a massive improvement of historic levels for me to even consider a move back to the failed BS we called a health care system we had prior to reform. The GOP had a long long long time to do something about the utter failure that was the health care system in America but instead chose to ignore it. The democrats didn't, and the GOP has no chance in hell of repealing it.

If they had a different plan they should have spent more time on it and less time cramming deregulation down everyone's throats. A word they won't even say publicly now.

[JMS]

I don't care if it did improve the deficit situation. It would have to be a massive improvement of historic levels for me to even consider a move back to the failed BS we called a health care system we had prior to reform. The GOP had a long long long time to do something about the utter failure that was the health care system in America but instead chose to ignore it. The democrats didn't, and the GOP has no chance in hell of repealing it.

If they had a different plan they should have spent more time on it and less time cramming deregulation down everyone's throats. A word they won't even say publicly now.

Actually the repeal of healthcare would increase deficite spending by 100's of billions of dollars over 10 years according the the CBO. Also the Republicans wrote into their new spending rules an exception that any increase in spending releated to repeal of Obama care did not need to be balanced by matching spending cuts. Thus acknowledging the CBO's numberrs could even be overly conservative.

[shk75]

---------- Post added January-7th-2011 at 02:58 PM ----------

To recap....

Yes I did not know the percentage or when it kicked in.

You knew the percentage but weren't sure of a source, what was covered, or when it kicked in.

I subsiquently found a link which confirmed and clarified your number. ( 20% for groups, 25% for individual policies ). The new link also agreed with me that all non claim costs were capped; including profits, employee salaries, office space, travel costs, lobying, and executive golden parachutes. It also said the cap took effect last september.

So we agree then that you were in error saying my quote didn't prove support my statement that all non claims expenses were caped, including profits.

which is really significant and something that I was unaware of during the healthcare debate. That's some teeth right there. I mean when you consider that in 2009 there were what 8 registared healthcare lobbiests for every membor of the congress.

http://thecommonprogressive.blogspot.com/2010/02/health-care-eight-lobbyists-per-every.html

OK here are sources for you I did not have time earlier

20% is average medical loss for health insurance companies - UnitedHealth Slashes Forecast, Wall Street Journal, April 23, 2008, p. B4; PULSE (newsletter), September 2005, p. 1

"And the law requires insurers to keep their administrative costs down to 20 percent of premium income for most plans. Thats a significant change. But it means the U.S. insurers can still have paperwork costs four times as high as the German, French, Swiss,and Japanese health insurance companies." The Healing of America

"This was the so-called individual mandate for every American to buy insurance, with government help to make it affordableobviously a profit-generating dream for private insurers" Health Care Reform and American Politics

"As for businesses in the U.S. economy's vast health care sector, they are going to win, on balance, enjoying more customers and opportunities for growth and profits" Health Care Reform and American Politics

"Insurance companies also have to change their business practices to make sure that 80–85% of their premiums are spent on the true costs of medical care rather than administration or profits" Health Care Reform and American Politics

I have a plethora of other sources if you would like and you could read my 200 page thesis if you are bored too lol.

[Thiebear]

BREAKING: CBO Says Repealing ObamaCare Would Reduce Net Spending by $540 Billion

I'm guessing net is the key word.

[Veretax]

I don't care about the debt or deficit with relation to OBamacare the bill is flawed, and already has pieces declared unconstitutional. Time to scrap it and start over with a truly OPEN and transparent process if they want real reform. I agree with some, prices are going to go up regardless, and it may not be because of health care expenditures, but due to the Dollar's weakening. How do we fix that? Anyone got any suggestions?

[Hubbs]

I don't care if it did improve the deficit situation. It would have to be a massive improvement of historic levels for me to even consider a move back to the failed BS we called a health care system we had prior to reform.

You can tell a difference already?

[Destino]

You can tell a difference already?

Preexisting conditions kicks in down the road. THAT ALONE puts things miles ahead of where they were. I don't like the idea that if I get into a long fight with cancer I will be locked into a insurer that will jack up my rates bankrupting me or I can choose to just die. The entire reason we have insurance is for the times we can't afford the treatments. I don't need the *******s for my checkups and frankly I've had insurance for 13 years as an adult and have never used it for anything I couldn't afford out of pocket. Odds are good that will continue... I'd like to think that when I do need them they aren't going through my original application looking for a reason to let me die or trying to bankrupt me.

[Veretax]

You can tell a difference already?

Is that a silly question, I have friends who's businesses dropped coverage because they couldn't afford the increases caused by the bill. I've seen seniors getting booted out of long term care because of changes to medicaid right here in my town of residence. Yeah that's Change I can believe in.

[Destino]

Is that a silly question, I have friends who's businesses dropped coverage because they couldn't afford the increases caused by the bill. I've seen seniors getting booted out of long term care because of changes to medicaid right here in my town of residence. Yeah that's Change I can believe in.

Businesses were dropping coverage before this bill. Ten years ago companies were dropping "family" coverage for their employees and reducing the benefit to paying a "portion" of their employees health care. Dropped coverages my have been sped up in SOME cases due to the bill but it was already happening and unavoidable and all of us in this threat know it.

Now I have a question: republicans have wanted to disconnect health care from employer for some time. Shouldn't this be celebrated then?

[BRAVEONAWARPATH]

Is that a silly question, I have friends who's businesses dropped coverage because they couldn't afford the increases caused by the bill. I've seen seniors getting booted out of long term care because of changes to medicaid right here in my town of residence. Yeah that's Change I can believe in.

http://blogs.forbes.com/rickungar/2011/01/06/more-small-businesses-offering-health-care-to-employees-thanks-to-obamacare/

http://www.latimes.com/health/healthcare/la-fi-health-coverage-20101227,0,5024491.story?page=2

[Larry]

Is that a silly question, I have friends who's businesses dropped coverage because they couldn't afford the increases caused by the bill.

Funny, I've never seen a single person who can point at a single increase that was caused by the bill. Could you explain it to us?

Not some link to some op-ed piece where a GOP spinmeister announces that the proce of insurance just went up 10%, for the tenth year in a row, and announces that 100% of this year's annual increase is obviously due to Obama, somehow.

Something that actually points to the actual law, with actual costs associated with it.

I've seen seniors getting booted out of long term care because of changes to medicaid right here in my town of residence.

And could you point me towards some place where Medicaid has been changed, by Congress, lately?

I know that they proposed creating a mechanism for making future changes. But it didn't pass. (Something about "death panels" and a filibuster.)

[Hubbs]

Preexisting conditions kicks in down the road. THAT ALONE puts things miles ahead of where they were. I don't like the idea that if I get into a long fight with cancer I will be locked into a insurer that will jack up my rates bankrupting me or I can choose to just die. The entire reason we have insurance is for the times we can't afford the treatments. I don't need the *******s for my checkups and frankly I've had insurance for 13 years as an adult and have never used it for anything I couldn't afford out of pocket. Odds are good that will continue... I'd like to think that when I do need them they aren't going through my original application looking for a reason to let me die or trying to bankrupt me.

...that's probably why I used the word "already". (I was probably trying to be a bit too literal for the discussion. I really was talking about only the changes that have already happened.)

Is that a silly question, I have friends who's businesses dropped coverage because they couldn't afford the increases caused by the bill. I've seen seniors getting booted out of long term care because of changes to medicaid right here in my town of residence. Yeah that's Change I can believe in.

Yeah, I think this has been sufficiently dealt with.

[shk75]

I don't care about the debt or deficit with relation to OBamacare the bill is flawed, and already has pieces declared unconstitutional. Time to scrap it and start over with a truly OPEN and transparent process if they want real reform. I agree with some, prices are going to go up regardless, and it may not be because of health care expenditures, but due to the Dollar's weakening. How do we fix that? Anyone got any suggestions?

Ok here are the drivers of increasing health care costs. First and foremost our prices are higher for everything (procedures, drugs, doctors salaries, technology, everything you name it). Second we have 4 or 5 times the administrative costs as any other system in a OECD nation. Third we have the worst preventative care rates of any OECD nation which in turn drives up health care costs. These are the three main drivers that make us unique to all other nations. Also it should be noted that ALL nations are struggling with rising health care costs it is just that the US costs are rising faster than other nations and our results are much worse. This reform aims to increase preventative care by ensuring that all have access to insurance and increasing the number of primary care doctors. It aims to control administrative costs by capping the amount that insurance companies are allowed to spend on overhead and and other administrative costs. What it does not do is create a national fee schedule that must be followed by all providers. This is why costs are projected to be less than if the reform did not exist but they will still rise.

[PeterMP]

Ok here are the drivers of increasing health care costs. First and foremost our prices are higher for everything (procedures, drugs, doctors salaries, technology, everything you name it). Second we have 4 or 5 times the administrative costs as any other system in a OECD nation. Third we have the worst preventative care rates of any OECD nation which in turn drives up health care costs. These are the three main drivers that make us unique to all other nations. Also it should be noted that ALL nations are struggling with rising health care costs it is just that the US costs are rising faster than other nations and our results are much worse. This reform aims to increase preventative care by ensuring that all have access to insurance and increasing the number of primary care doctors. It aims to control administrative costs by capping the amount that insurance companies are allowed to spend on overhead and and other administrative costs. What it does not do is create a national fee schedule that must be followed by all providers. This is why costs are projected to be less than if the reform did not exist but they will still rise.

Preventative care savings, as preventative care is normally practiced, is largely a myth.

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/31/AR2009083103854.html

As somebody claiming to be an expert on the topic, I'm surprised that you don't know this. It has been the subject of several different peer reviewed studies, covered in the popular press (as demonstrated by the above link), and part of the CBO estimates.

Doctor salaries are related to costs though. I know in France medical school is free (paid by the government out of education funds so it doesn't show up in medical expenses).

I was going to ask this in your other thread, but since I am writing in this thread, do you worry about governmental control of costs of technology/drugs hurting advancement. As more countries have gone to more governmental control there has been a decrease in technological advances recently, which can been seen as a decrease in the number of things actually used that are covered by patents (it is a unidirectional relationship (an increase in government control and a decrease in advancement) so isn't the strongest relationship (vs. a case where over time the two have gone up and down)).

[chipwhich]

Preventative care savings, as preventative care is normally practiced, is largely a myth.

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/31/AR2009083103854.html

I respect you PMP, but please tell me you don't make your decisions based on a Washington Post reporters article. Please tell me you have more depth than that.

[shk75]

Preventative care savings, as preventative care is normally practiced, is largely a myth.

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/31/AR2009083103854.html

As somebody claiming to be an expert on the topic, I'm surprised that you don't know this. It has been the subject of several different peer reviewed studies, covered in the popular press (as demonstrated by the above link), and part of the CBO estimates.

Doctor salaries are related to costs though. I know in France medical school is free (paid by the government out of education funds so it doesn't show up in medical expenses).

I was going to ask this in your other thread, but since I am writing in this thread, do you worry about governmental control of costs of technology/drugs hurting advancement. As more countries have gone to more governmental control there has been a decrease in technological advances recently, which can been seen as a decrease in the number of things actually used that are covered by patents (it is a unidirectional relationship (an increase in government control and a decrease in advancement) so isn't the strongest relationship (vs. a case where over time the two have gone up and down)).

There are some serious opposing views to the article you posted and there are two schools of thought. There are those that believe that preventive care for chronic conditions will not decrease costs because at some point these patients will need highly invasive procedures and this will cost the system a lot of money. However, there is the other school of thought, which I happen to agree with, which states that since many of the uninsured are disproportionately affected by chronic conditions like diabetes and heart disease they are forced to be dependent on emergency care. Emergency wards are only allowed to treat emergencies and the most expensive care is ICU care. Therefore many feel that insuring these populations will decrease the costs of emergency care and thus decrease the percentage of health spending that is attributed to hospitals. However, you are correct in stating that many times the savings from preventive care are overstated so thank you for pointing that out.

In terms of physicians costs, it is a small percentage of our health care costs and not a real driver of it but it does play a part. In most OECD nations medical school is free or paid for by government grants and therefore doctors do not exit school with extreme debt like those going to school in the US.

There are also debates about the use of technology and if it is reduced by universal care. Britain is infamous for using low rates of technology in order to control costs but that has recently changed with them focusing more on advanced procedures. However, this is a not a rule and a good example of this is Japan. Japan is BY FAR the highest user of technology and their MRI usage rates are the highest in the world. Many feel that government control/regulation will inhibit technological advancement but in fact the opposite has been true in Japan. Developers have taken cost-effectiveness very seriously when creating new technology and as a result they have built MRI machines that cost 1/10th of what machines made in the US cost.

[PeterMP]

I respect you PMP, but please tell me you don't make your decisions based on a Washington Post reporters article. Please tell me you have more depth than that.

http://www.nejm.org/doi/full/10.1056/NEJMp0708558

http://blogs.abcnews.com/politicalpunch/2009/08/congressional-budget-expert-says-preventive-care-will-raise-not-cut-costs.html

Preventative care CAN save money, but it would mean a substantial change in how we do preventative care.

[shk75]

I respect you PMP, but please tell me you don't make your decisions based on a Washington Post reporters article. Please tell me you have more depth than that.

Chip, he makes a good point and this research quoted by the Washington Post was related to this study:

http://www.nejm.org/doi/full/10.1056/NEJMp0708558

[PeterMP]

There are some serious opposing views to the article you posted and there are two schools of thought. There are those that believe that preventive care for chronic conditions will not decrease costs because at some point these patients will need highly invasive procedures and this will cost the system a lot of money. However, there is the other school of thought, which I happen to agree with, which states that since many of the uninsured are disproportionately affected by chronic conditions like diabetes and heart disease they are forced to be dependent on emergency care. Emergency wards are only allowed to treat emergencies and the most expensive care is ICU care. Therefore many feel that insuring these populations will decrease the costs of emergency care and thus decrease the percentage of health spending that is attributed to hospitals. However, you are correct in stating that many times the savings from preventive care are overstated so thank you for pointing that out.

There's nobody in the last 5 years that has looked at the issue and determined that preventative care, as we currently practice it, would save money.

In terms of physicians costs, it is a small percentage of our health care costs and not a real driver of it but it does play a part. In most OECD nations medical school is free or paid for by government grants and therefore doctors do not exit school with extreme debt like those going to school in the US.

I agree, but you mentioned it.

There are also debates about the use of technology and if it is reduced by universal care. Britain is infamous for using low rates of technology in order to control costs but that has recently changed with them focusing more on advanced procedures. However, this is a not a rule and a good example of this is Japan. Japan is BY FAR the highest user of technology and their MRI usage rates are the highest in the world. Many feel that government control/regulation will inhibit technological advancement but in fact the opposite has been true in Japan. Developers have taken cost-effectiveness very seriously when creating new technology and as a result they have built MRI machines that cost 1/10th of what machines made in the US cost.

I meant with respect to developing new technology.

The Japanese FORCE companies to sell them MRI's for less money than here.

http://www.npr.org/templates/story/story.php?storyId=120545569

Are the Japanese, by forcing such a low price, negatively affecting the development of new technology?

[shk75]

There's nobody in the last 5 years that has looked at the issue and determined that preventative care, as we currently practice it, would save money.

I agree, but you mentioned it.

I meant with respect to developing new technology.

The Japanese FORCE companies to sell them MRI's for less money than here.

http://www.npr.org/templates/story/story.php?storyId=120545569

Are the Japanese, by forcing such a low price, negatively affecting the development of new technology?

With regards to your first point you are right that current preventive care methods need to be changed A study by Dr. Patricia Stone et. al. summarized it best when it stated that "One of the issues is that strategies that target preventive services at populations with high prevalence have lower cost-utility ratios than strategies applied. This is congruent with previous researchers’ findings that prevention interventions targeted at especially high-risk persons offer higher gains in life expectancy than prevention interventions for average-risk populations." One of the things that needs to occur is to have more of a focus and understanding of how to correctly carry out preventive measures and many feel that this is not going to occur under our system since preventive care has not proven to be a priority. Another study found that "Patients with diabetes or cardiovascular disease who are uninsured prior to gaining Medicare coverage need more costly and intensive care over subsequent years than if they have been previously insured" and this has been attributed to their lack of preventive care.

Doctors may be a small driver of health care costs but what I was stressing is that our prices for everything are higher and that is a serious reason that our health care costs are so high. There is a great study called "It's the Prices Sutpid" that summed up this issue best and if you would like I could email it to you.

The Japanese do not force companies to sell them the MRIs for less money. What they do is they set a price they are willing to buy them for. Then what happens is simple market economics. The MRI companies have decided to start competing for these health care dollars by creating machines that cost less. This means that they may not have all the same bells and whistles as some MRI machines you see in the US but they are effective and do the job.

[Seabee1973]

Yes pete, I take your point. But you will note I was responding to someone who stated that healthcare costs were soaring because of Obama care. By noting that actual increases in medical spending were down signficantly to a 50 year low.

Perhaps you are correct that the low expenditures are unrleated to Obamacare which only slightly were in effect in 2010. But certainly we can agree that the reduced increase in medical costs show that the healthcare costs did not dramatically increase in 2010 because of Obamacare.

---------- Post added January-7th-2011 at 02:58 PM ----------

To recap....

Yes I did not know the percentage or when it kicked in.

You knew the percentage but weren't sure of a source, what was covered, or when it kicked in.

I subsiquently found a link which confirmed and clarified your number. ( 20% for groups, 25% for individual policies ). The new link also agreed with me that all non claim costs were capped; including profits, employee salaries, office space, travel costs, lobying, and executive golden parachutes. It also said the cap took effect last september.

So we agree then that you were in error saying my quote didn't prove support my statement that all non claims expenses were caped, including profits.

which is really significant and something that I was unaware of during the healthcare debate. That's some teeth right there. I mean when you consider that in 2009 there were what 8 registared healthcare lobbiests for every membor of the congress.

http://thecommonprogressive.blogspot.com/2010/02/health-care-eight-lobbyists-per-every.html

Is the spending lower because of teh recassion? Or is it because of companies readjusting their policies to cost more but cover less like Boeing and AARP insurance did just saying it had teh lowest increase in 50 years means nothing. You have to look at the whole picture