Report: House Health Care Bill INCREASES Costs By $289 Billion

by Andrew Moylan

The Politico ran a story this weekend pointing out a very inconvenient truth for proponents of the House version of big government health reform legislation: contrary to its goal of “bending the cost curve downward” over time, the bill would actually INCREASE health care costs by $289 billion.

The report issued by the Center for Medicare and Medicaid Services estimated that the “Affordable Health Care for America Act” would increase health care costs from the current level of 20.8 percent of GDP up to 21.1 percent a decade from now. It also adds yet another voice to the chorus now showing that preventive care and wellness programs do NOT decrease long-term costs.

In a fascinating development, the White House has now actually admitted, apparently for the first time, that the House bill would increase health care burdens despite President Obama’s repeated assertion that he seeks a health care bill that would reduce costs. In response to the CMS study, Obama aide Nancy-Ann DeParle said, “the good news was that, despite extending coverage to 36 million people, health care spending would rise by only by 0.8 percent.”

The CMS findings could make it very difficult for Congressional Democrats and other proponents to follow through on what might be the central argument for their plan of massive tax hikes, subsidies, and regulations: that it would reduce crippling health care costs.  Several Members, particularly those facing tough re-election fights, have committed themselves to only voting for a plan that would cut long-term health care costs.

Perhaps more importantly, this report adds yet more evidence to the case that the House health care bill does little, if anything, to address the fundamental problems in health care and is actually counterproductive in many respects. Our employer-based health care system creates problems with transitional lack of insurance due to job changes or layoffs and hides the cost of health care services behind massive walls of bureaucracy. Instead of addressing these issues or injecting real competition by allowing for insurance purchases across state lines, the Democrats’ bill resorts to a predictable package of over $700 billion in tax hikes, coupled with huge new government subsidies and strict regulations.

In addition, it adds a so-called “public option” government insurance program, ostensibly to provide “competition” to major health insurance companies. But the logic of creating a government-run plan for insurance is tenuous at best, as the National Taxpayers Union pointed out in a recent letter to MoveOn.org, asking “Why not a public option in everything?”

The onus is now on the Senate, where debate on their version of a health care bill is expected in the next few weeks. The sharp divisions witnessed in the House are sure to be even sharper in the Senate in light of recent developments.

The full report from CMS’ auditors is below.


OACT_Memorandum_on_Financial_Impact_of_H_R__3962__11-13-09_ –


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Posted Nov 16th 2009 at 11:13 am in Congress, Healthcare, News, Obama, Politics | 40 Comments