Thread: Report: Health overhaul will increase nation's tab

Originally Posted by Greenbeard

This is a question of rhetoric, not of the actual quantitative analysis.

hummmm, analysis. Well, Obama claimed that to fund the myriad of new gov. orgs. and supply dollars for care of the new 30 million entitlees, he will not fund medicare to the tune of 500 billion, there by not incurring any NEW cost for the entitlement. This is what he said and I believe is common knowledge, lord knows we have heard it enough, its was one of the major cost savings he trumpeted. That money will be sued for the new entitlement.



He claims that this 500 billion, taken from the medicare system, used in the new prgm. is a savings, this accounting is not accurate, the CBO added an addendum saying same to their report. ( see below)

If you spend the 500 billion, there is NO savings, he can blow it on several new air force ones or on F-22's, at the end of the day, the treasury has spent 500 billion dollars...one way or another. hers the usual gov. speak bloodless quantitative analysis I think will help;


The key point is that the savings to the HI trust fund under the PPACA would be received by the government only once, so they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs.

Trust fund accounting shows the magnitude of the savings within the trust fund, and those savings indeed improve the solvency of that fund; however, that accounting ignores the burden that would be faced by the rest of the government later in redeeming the bonds held by the trust fund. Unified budget accounting shows that the majority of the HI trust fund savings would be used to pay for other spending under the PPACA and would not enhance the ability of the government to redeem the bonds credited to the trust fund to pay for future Medicare benefits.

To describe the full amount of HI trust fund savings as both improving the government’s ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings and thus overstate the improvement in the government’s fiscal position.

http://sayanythingblog.com/images/Tr...Accounting.pdf

He claims that this 500 billion, taken from the medicare system, used in the new prgm. is a savings, this accounting is not accurate, the CBO added an addendum saying same to their report.

As I said, this is a rhetorical criticism ("he claims..."). The double counting accusation applies to rhetorical claims made by Democrats. It doesn't imply, as you said in your earlier post, that the "true" 10-year cost of this legislation is the CBO estimate of $940 billion + $500 billion. That's simply not what this means. The numbers stand.

Originally Posted by Greenbeard

As I said, this is a rhetorical criticism ("he claims..."). The double counting accusation applies to rhetorical claims made by Democrats. It doesn't imply, as you said in your earlier post, that the "true" 10-year cost of this legislation is the CBO estimate of $940 billion + $500 billion. That's simply not what this means. The numbers stand.

so what does it mean?

if the 500 billion is pulled from medicare the plan comes to 940 billion. If it is spent on the new entitlement, is it not 940 billion is it?

and the 220 some odd Billion for the medicare doctor fix? is that a rhetorical claim as well?

Let's run though the costs of the bill, as estimated by the CBO:

• Medicaid & CHIP outlays: $434 billion. As I'm sure you know, the bill simplifies and standardizes state Medicaid eligibility standards such that anyone with income below 133% of the federal poverty line is eligible for it. The federal government takes on the entirety of the costs for newly eligible beneficiaries (100% FMAP) for a few years and continues to bear 90%+ of the costs indefinitely. In addition, Medicaid reimbursement rates are increased to Medicare rates for 2 years. The lifetime of CHIP is also extended. So there's this cost.
• Exchange subsidies and related spending: $466 billion. The bill creates state-administered (unless states choose to let the feds run them) exchanges for private insurers. Citizens between 133% and 400% of the poverty line are eligible for sliding scale subsidies pegged to the second cheapest silver(actuarial value) plan in an area. In effect, this achieves some parity between the individual and group markets, as the group markets have been subsidized for over six decades.
• Small employer tax credits: $40 billion. Employers with 25 or fewer employees are eligible for tax credits to help them pay for insurance coverage for their employees.

That's why the law costs $940 billion over ten years. The costs of Medicare over that time period are not a result of this new law and thus don't figure into the estimates of how much it costs. You're looking at the other side of the equation, the revenues and savings used to pay for that $940 billion (and then some). However, that doesn't affect the actual price tag of the bill, which is dependent on the three outlays I posted above. We don't suddenly have to pay for $500 billion more additional outlays for some reason. You can question whether the spending and saving provisions will cover the costs of the $940 but that reflects the impact on the deficit, not the net cost of the provisions in the bill. People like Paul Ryan do a disservice to the public by presenting their arguments in such a muddled way as to lead to those kinds of erroneous conclusions.

Originally Posted by Greenbeard

Let's run though the costs of the bill, as estimated by the CBO:

• Medicaid & CHIP outlays: $434 billion. As I'm sure you know, the bill simplifies and standardizes state Medicaid eligibility standards such that anyone with income below 133% of the federal poverty line is eligible for it. The federal government takes on the entirety of the costs for newly eligible beneficiaries (100% FMAP) for a few years and continues to bear 90%+ of the costs indefinitely. In addition, Medicaid reimbursement rates are increased to Medicare rates for 2 years. The lifetime of CHIP is also extended. So there's this cost.
• Exchange subsidies and related spending: $466 billion. The bill creates state-administered (unless states choose to let the feds run them) exchanges for private insurers. Citizens between 133% and 400% of the poverty line are eligible for sliding scale subsidies pegged to the second cheapest silver(actuarial value) plan in an area. In effect, this achieves some parity between the individual and group markets, as the group markets have been subsidized for over six decades.
• Small employer tax credits: $40 billion. Employers with 25 or fewer employees are eligible for tax credits to help them pay for insurance coverage for their employees.

That's why the law costs $940 billion over ten years. The costs of Medicare over that time period are not a result of this new law and thus don't figure into the estimates of how much it costs. You're looking at the other side of the equation, the revenues and savings used to pay for that $940 billion (and then some). However, that doesn't affect the actual price tag of the bill, which is dependent on the three outlays I posted above. We don't suddenly have to pay for $500 billion more additional outlays for some reason. You can question whether the spending and saving provisions will cover the costs of the $940 but that reflects the impact on the deficit, not the net cost of the provisions in the bill. People like Paul Ryan do a disservice to the public by presenting their arguments in such a muddled way as to lead to those kinds of erroneous conclusions.

Ah okay, I see your point.

So the double counting the CBO refers to is not actually a billable expense or part and parcel of the bill, in situ, as far as the health care bill is concerned but, lets use the CBO language, this 500 billion; overstate[s] the improvement in the government’s fiscal position, by virtue of passing the bill....

So, at the end of the day, we will if all goes according to plan spend 940 billion yet this lauded savings probably won't materialize and/or is overstated(?).

Ryan may have misstated as well, but in the and I think, hes closer to talking in real terms as to over all health care cost in that 10 years than as you stated the rhetorical flourishes Obama and dems employed, leading many to believe that there was savings or net gain ahead of costs, of 500 billion.

The double counting argument simply means that if someone states or implies that the savings from Medicare are used to improve the health of that program in addition to paying for the exchange subsidies or Medicaid expansions (which apparently some have suggested), they're wrong. It's purely a criticism of how the finances are being described, it has no effect on the actual numbers (the quantitative analysis).

The projected savings (primarily from the reductions in payments to Medicare Advantage plans, reductions in the rate of increase of non-physician reimbursement rates, and reductions in DSH payments to hospitals) is still in the neighborhood of $500 billion. The criticism is merely that some of the rhetoric apparently implies that $500 billion is effectively being saved in two different places, which of course it isn't. This reaction seems blown out of proportion to the actual underlying issue here (e.g. an errant speech here or there).

Originally Posted by Greenbeard

The double counting argument simply means that if someone states or implies that the savings from Medicare are used to improve the health of that program in addition to paying for the exchange subsidies or Medicaid expansions (which apparently some have suggested), they're wrong. It's purely a criticism of how the finances are being described, it has no effect on the actual numbers (the quantitative analysis).

The projected savings (primarily from the reductions in payments to Medicare Advantage plans, reductions in the rate of increase of non-physician reimbursement rates, and reductions in DSH payments to hospitals) is still in the neighborhood of $500 billion. The criticism is merely that some of the rhetoric apparently implies that $500 billion is effectively being saved in two different places, which of course it isn't. This reaction seems blown out of proportion to the actual underlying issue here (e.g. an errant speech here or there).

well, obama and congress created this issue.

If I want to buy a new $5000 car , but decide not to, I tell my wife we just saved money by NOT buying it.

I then go out and put braces on my kids teeth that costs $5000, then, at the end of the day, I tell my wife, hey, we're 'deficit neutral' honey, because after all, I just saved the $5000 from the car purchase I didn't make, which will 'offset' the cost of Sissys braces.....

They, Congress asked the CBO if they could count same $500 billion twice, once to extend the life of Medicare and yet again, to pay for the cost of funding the bill, their answer?


CBO has been asked for additional information about the projected effects of the Patient Protection and Affordable Care Act (PPACA), the pending health care reform legislation, on the federal budget and on the balance in the Hospital Insurance (HI) trust fund, from which Medicare Part A benefits are paid. Specifically, CBO has been asked whether the reductions in projected Part A outlays and increases in projected HI revenues under the legislation can provide additional resources to pay future Medicare benefits while simultaneously providing resources to pay for new programs outside of Medicare. Our answer is basically no.

Director's Blog Blog Archive Effects of the Patient Protection and Affordable Care Act on the Federal Budget and the Balance in the Hospital Insurance Trust Fund


The impression is, that there is a savings. Obama has said it, Pelosi has said, and Obama continues to say same.

House Democrats Say CBO Projects $500 Billion in Gross Savings From Medicare

The link above is the original sin. And the use of such has not abated. They are the ones whom touted and continue to, that Obamacare will cut $500 billion out of Medicare. This will extend the 'life' of Medicare for 10 years until 2027.

Part A outlays and increases in projected HI revenues under the legislation can provide additional resources to pay future Medicare benefits while simultaneously providing resources to pay for new programs outside of Medicare. Our answer is basically no.

so they are not going to pay liabilities/layouts, that 500 billion in money coming from payroll taxes etc. that goes into and right out of the trust fund, that is/was until now, being spent on Medicare etc., will that money be kept?

How will it be accounted for? They cannot say hey, I have that money we were going to spend right here, then wait I will use it to fund say the $466 Billion for the exchanges? Where is the 466 billion coming from? How is there a savings? There isn't. They are using it for the new entitlement. Thats my point on the savings issue.




Now, you're right, I agree at this point or moment, there is no additional outlay above the $940, my cynicism got ahead of me.........there fore, I await the non-payments to fund part A etc. of medicare.

My contention is; when it gets to nut cutting time, it won't happen and we will then be sending that 500 billion to medicare, there fore the price of the bill will be, 940+500.....there will be NO deficit neutrality.

Originally Posted by Imperator

My contention is; when it gets to nut cutting time, it won't happen and we will then be sending that 500 billion to medicare, there fore the price of the bill will be, 940+500.....there will be NO deficit neutrality.

Considering our beloved congress history in this sort of thing, personally I think we'll be lucky if it's only 940+500.

Remember, remember on the 2nd of November
The health care treason and plot
I can think of no reason, that the health care treason,
Should ever be forgot...

Originally Posted by Imperator

If I want to buy a new $5000 car , but decide not to, I tell my wife we just saved money by NOT buying it.

The examples you choose to use indicate you don't really understand this issue. A better example would be this: imagine you've leased a car and have been paying some monthly rate for some time (and are going to be paying that rate for some time). Now a new expense--your child's braces--comes up and as part of the way to finance it you decide to cut back on existing expenses. So you trade in your car for one with a lower monthly payment. Thus you're now paying less every month for your car and can spend the money that would've been going toward your car payment on the braces.

That money actually is saved. It's not some trick or money conjured out of somebody's imagination, as you seem to be indicating with your example. Double-counting would just be if you tell your wife that you've paid for the braces and you're still driving the more expensive car.

The impression is, that there is a savings. Obama has said it, Pelosi has said, and Obama continues to say same.

There is a savings. The issue is where the savings is being applied (spent). Again, I blame Ryan for spreading these sorts of misconceptions.

How will it be accounted for? They cannot say hey, I have that money we were going to spend right here, then wait I will use it to fund say the $466 Billion for the exchanges? Where is the 466 billion coming from? How is there a savings? There isn't. They are using it for the new entitlement. Thats my point on the savings issue.

Your problem is and always has been semantic. It's not "savings" if you trim money in one area and immediately put it to use it another. I understand that you think that. It's not savings if the money I save, er, keep from clipping coupons for groceries just goes to fund my next night out at the bar. Sure, fine. Some people use "savings" to mean money you tuck under your bed or into an interest-bearing account and don't use, some use "savings" to mean money that you were spending on something but are now no longer spending on said expense. You're obviously very committed to the former. But this focus on diction isn't interesting to me.

But, in fact, the latest CBO projections confirm — again — that the President’s health plan would pile more another unfinanced entitlement program on top of the unaffordable ones already on the federal books.

According to CBO, the new entitlement spending in the plan would cost $216 billion by 2019, and then increase by 8 percent every year thereafter. In other words, the President’s plan would stand up another health entitlement program that will grow much faster than the nation’s economy or revenue base. The changes the Democrats would make to the Senate-passed bill would make the entitlement program even more expensive.

Over a full ten years of implementation, the cost of the new entitlement spending would reach $2.5 trillion, at least, not $1 trillion as advertised by the White House.

The President and his congressional allies have suggested that the offsets they are pushing will more than cover this massive spending increase. But even a modest amount of scrutiny reveals these supposed offsets are nothing more than gimmicks and implausible assumptions.

For starters, the plan doesn’t count $371 billion in spending for physician fees under the Medicare program. The President and Congressional Democrats want to spend this money, for sure. They just don’t want it counted against the health bill. That’s because they want to reserve all of the Medicare cuts in the bill as offsets for another entitlement instead of using them to pay for the problem that everyone knows needs fixing. The President says he shouldn’t have to pay for the “doc fix.” But why not? Never before did congress move to add the cost of a permanent fix to the national debt. But that is exactly what the President now wants to do. When the cost of the “doc fix” is properly included in the accounting, all of the claimed deficit reduction from the President’s health plan vanishes.

Then there’s the “Cadillac” tax on high-cost insurance plans. Because of union pressure, the President pushed the tax back to 2018, well passed the point when he will have left office. But once in place, he now would allow the threshold used to determine “high-cost” to rise only with the CPI, beginning in 2020. That means a very large segment of the middle class would get hit with the tax as the years passed. The President has shown that he is unwilling to actually collect this tax. But he wants us to believe we can count on a huge revenue jump over the long-run because his successors will have more stomach for it than he does.

Similarly, to jury-rig “long-term deficit reduction,” the latest plan would first increase the premium assistance subsidies paid to low and moderate wage families above the levels in the Senate-passed bill, but then index their value to something below the growth in premiums to give the appearance of deficit reduction in the decade after 2019.

There’s no “bending of the cost-curve” here. It’s sleight of hand that, if actually implemented, would force millions of low-income families to pay ever higher premiums every year. The Democrats don’t want to talk about that. They just want to pretend they have been serious with fiscal discipline.

The other gimmicks remain in the plan as well. The double-counting of premiums for a long-term care insurance programs an offset for the health entitlement spending. The assumption that congress will allow Medicare reimbursement rates to fall so low that one in five hospitals and nursing homes might be forced to stop taking Medicare patients. And the expectation that somehow congress can hand out generous new subsidies to those getting insurance through the exchanges, even though many tens of millions of others with the same resources would get no additional help for their job-based coverage.

Obamacare Will Break the Bank, Not Cut the Deficit | The Foundry: Conservative Policy News.

Anyone with any sense should know that if it takes 10 years of increased taxes to fund 5 years of benefits, that the bill, whatever it is will not work in the long term.

Originally Posted by tsquare

Anyone with any sense should know that if it takes 10 years of increased taxes to fund 5 years of benefits, that the bill, whatever it is will not work in the long term.

You realize that what you just posted is complaining that the excise tax won't be implemented until 2018, right?

Originally Posted by Greenbeard

The examples you choose to use indicate you don't really understand this issue. A better example would be this: imagine you've leased a car and have been paying some monthly rate for some time (and are going to be paying that rate for some time). Now a new expense--your child's braces--comes up and as part of the way to finance it you decide to cut back on existing expenses. So you trade in your car for one with a lower monthly payment. Thus you're now paying less every month for your car and can spend the money that would've been going toward your car payment on the braces.

That money actually is saved. It's not some trick or money conjured out of somebody's imagination, as you seem to be indicating with your example. Double-counting would just be if you tell your wife that you've paid for the braces and you're still driving the more expensive car.


There is a savings. The issue is where the savings is being applied (spent). Again, I blame Ryan for spreading these sorts of misconceptions.

you lower payments in one place, to spend in another, you have saved zip, you just have not spent more money,to pay for the braces, which would have resulted in a credit outlay, or pulling from the trust fund, which by the way has liabilities, in effect you have just pushed on a balloon. The CBO seems to agree as they were asked for their opinion. The gov. financial position will not be enhanced.

Your problem is and always has been semantic. It's not "savings" if you trim money in one area and immediately put it to use it another. I understand that you think that. It's not savings if the money I save, er, keep from clipping coupons for groceries just goes to fund my next night out at the bar. Sure, fine. Some people use "savings" to mean money you tuck under your bed or into an interest-bearing account and don't use, some use "savings" to mean money that you were spending on something but are now no longer spending on said expense. You're obviously very committed to the former. But this focus on diction isn't interesting to me.

First you insist that ryan is responsible for posting this misnomer misinformation etc. yes I do see where you are coming from, yet you have not acknowledged once, despite evidence provided that Obama has chosen this sloppy misleading language. I am not the one insisting that there is a savings, I am merely reacting to the props of the bill.


I am not the one engaged in semantics here my friend, your example as to getting a car with a lower lease rate doesn't do it for me, again that is not what obama et al has said.

You have traded costs, you are not ahead nor are you behind, and then claiming that this equals a savings, yet the outlay be it for braces or the nicer car are outlays, forgetting where they the money is going for the moment which in this context does not matter, at the end of the day there is no gain, you have not left money in the trust fund nor used it to say to pay down debt. or even used it to pay interest on debt. you have in effect, transferred payments.