Committee for a Responsible Federal Budget

Health Bills Don't Go Far Enough to Cut Costs

Nov 4, 2009 | Health Care

In today's Washington Post, Ceci Connelly has an article titled, "Health Bills are too Timid on Cutting Costs, Experts Say." In it she discusses how the health care reform bills in Congress are "shying away" from incorporating some of the most "aggressive techniques" for slowing the rise of health care costs, even in spite of the Administration's stated dedication to reining in costs. She mentions concerns that constraining costs could result in some "half-tepid" measures being discussed on Capitol Hill, citing, for example, the fact that the Senate plan to tax high-price insurance plans will save far less money than eliminating the tax exemption for employer-sponsored coverage would. She additionally mentions the following concerns:

  • Proposals on comparative-effectiveness research and a new Medicare cost-cutting commission have been watered down.
  • An array of Medicare pilot projects aimed at paying doctors and hospitals for quality rather than quantity would take years to be implemented nationally -- if they ever were.
  • None of the bills addresses medical liability, even though the Congressional Budget Office has concluded that tort reform could save $54 billion over the next decade.

In a somewhat recent press release, CRFB outlined a similar list of options absent from the Senate Finance bill that could help to both slow health care cost growth and achieve significant savings over the next ten years. These were:

  • Replacing the excise tax with a cap on employer-sponsored insurance tax exclusion at the 75th percentile of premium costs - $160 billion.
  • Increasing cost-consciousness in Medicare through a unified deductible, uniform coinsurance, and catastrophic limit - $26 billion.
  • Restricting Medigap coverage of Medicare’s cost-sharing - $41 billion.
  • Reducing Medicare payment rates in high-spending areas - $51 billion.
  • Enacting medical malpractice liability reform - $54 billion.

Ceci Connelly will be moderating Friday's US Budget Watch event, titled "Will Health Care Reform Heal the Federal Budget?" At this event, a panel of health care experts will discuss the bills being considered in Congress, whether and how they will be paid for, whether gimmicks are being used to mask the true costs, and whether any of the bills will bend down cost curves. To see event details and to RSVP, please click here.