Report questions health reform law savings

By Billy House

April 23, 2010

An administration report out Friday says the new healthcare law will increase costs to the federal government by $311 billion over the next decade, a finding that appears to undercut the views of President Obama and congressional Democrats that the measure would cut the nation's skyrocketing health costs.

Richard Foster, chief actuary for the Centers for Medicare and Medicaid Services, said in the report that while the law does contain provisions to trim the growth of healthcare costs, "their impact would be more than offset through 2020 by the higher expenditures."

The $311 billion figure he cited represents an increase of 0.9 percent from 2010-2020.

Costs could eventually be reduced by some of the cost-control measures in the bill -- Medicare cuts, a tax on high-cost insurance and a commission to seek ongoing Medicare savings -- but likely not during the first decade.

Foster also warned costs could increase even more because there is a question whether Medicare cuts written into the law "are realistic and sustainable."

Foster includes a caveat, saying that while he believes the report fairly addresses the future impact of the bill, there is uncertainty in such complicated projections.

Republicans, who disputed claims that the law would cut costs, said the report validated their suspicions.

"The Democrats' plan rests on the ridiculous notion that skyrocketing healthcare costs will be reined in if Washington just increases spending by trillions of dollars," said House Republican Study Committee Chairman Rep. Tom Price of Georgia. "As the ... report illustrates, that is completely absurd. This government takeover of health care does not control costs; it actually increases the amount we spend on health care nationally."


By Billy House

April 23, 2010

http://www.govexec.com/oversight/2010/04/report-questions-health-reform-law-savings/31356/