NCPA - National Center for Policy Analysis


November 17, 2009

The House-approved health care overhaul would raise the costs of health care by $289 billion over the next 10 years, according to an analysis by Richard S. Foster, the chief actuary at the Centers for Medicare and Medicaid Services (CMS).

Minority Leader John Boehner (R-Ohio) highlighted the CMS report on Saturday in a written statement.  "This report once again discredits Democrats' assertions that their $1.3 trillion government takeover of health care will lower costs, and it confirms that this bill violates President Obama's promise to bend the cost curve.  It's now beyond dispute that their bill will raise costs, which is exactly what the American people don't want."

According to the 31-page report, the House-passed bill would increase costs, cut Medicare and expand Medicaid:

  • For calendar years 2010 through 2019, national health expenditures would increase by $289 billion.
  • About three-fifths or more than 60 percent of the uninsured would gain coverage by an expansion in Medicaid eligibility.
  • Medicare would be cut by more than one-half trillion dollars ($571 billion), possibly jeopardizing access to care for beneficiaries, and smaller companies would be inclined to terminate their existing coverage.

The nonpartisan analysis demonstrates that the Democrats' bill "does the opposite of everything they've been wanting to do" in terms of reducing overall health costs, says House Ways and Means Committee ranking member Dave Camp (R-Mich.).

He added the CMS report shows that "this is not health care reform, this is entitlement expansion."

In an interview with The Hill on Saturday afternoon, Camp pointed out that CMS actuarial numbers were cited by Democrats back in 2003 during the Medicare prescription drug debate:

  • CMS estimated at that time that the GOP-crafted Medicare bill would cost more than $550 billion over 10 years while CBO estimated its price tag at $395 over the same period.
  • The CMS cost estimate did not emerge until after the final conference bill was approved by Congress.

Source: Molly K. Hooper, "CMS: House Health Bill Will Hike Costs $289B," The Hill, November 14, 2009; and Richard S. Foster, "Estimated Financial Effects of the "America's Affordable Health Choices Act of 2009," (H.R. 3962), as Passed by the House on November 7, 2009," Centers for Medicare & Medicaid Services, November 13, 2009.

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