NCPA - National Center for Policy Analysis


April 23, 2010

ObamaCare is getting a mixed verdict in the first comprehensive look by neutral experts: More Americans will be covered, but costs are also going up. 

Economic experts at the Health and Human Services Department concluded in a report issued Thursday that the health care remake will achieve President Obama's aim of expanding health insurance -- adding 34 million to the coverage rolls. 

But the analysis also found that the law falls short of the president's twin goal of controlling runaway costs, raising projected spending by about 1 percent over 10 years.  That increase could get bigger, since Medicare cuts in the law may be unrealistic and unsustainable, the report warned: 

  • The report projected that Medicare cuts could drive about 15 percent of hospitals and other institutional providers into the red, "possibly jeopardizing access" to care for seniors.
  • The report acknowledged that 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 -- could help reduce the rate of cost increases beyond 2020.
  • But it held out little hope for progress in the first decade. 

The report's most sober assessments concerned Medicare: 

  • In addition to flagging provider cuts as potentially unsustainable, the report projected that reductions in payments to private Medicare Advantage plans would trigger an exodus from the popular alternative; enrollment would plummet by about 50 percent.
  • Seniors leaving the private plans would still have health insurance under traditional Medicare, but many might face higher out-of-pocket costs.  

In another flashing yellow light, the report warned that a new voluntary long-term care insurance program created under the law faces "a very serious risk" of insolvency. 

Source: Ricardo Alonso-Zaldivar, "Report says health care will cover more, cost more," Associated Press/Yahoo News, April 23, 2010. 


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