Utah Republican Party

Reid Bill Will Boost Health Costs by $234 Billion over 10 Years

Legislation Also Reduces Access and Benefits for Nation’s Elderly, Hatch Warns

WASHINGTON – Sen. Orrin Hatch, R-Utah, said the Obama administration’s own numbers on the Reid bill add up a huge cost increase for health care over the next decade, as well as a reduction in access and benefits for the nation’s senior citizens.

Speaking on the Senate floor Saturday, Hatch told colleagues that the Department of Health and Human Services health analysis “proves what we have been saying all along:  You cannot reform a $2.2 trillion health care system simply by spending another $2.5 trillion of hard-earned taxpayer money. So despite all the rhetoric from the other side about this historic legislation, the only thing this bill accomplishes after imposing half a trillion dollars in new taxes and half a trillion dollars in Medicare cuts is to simply bend our nation’s cost curve upwards.”

Sen. Hatch’s complete remarks on the Senate floor follow:

Mr. President. Yesterday the Administration’s own Department of Health and Human Services Health analysis warned Americans about the impact of this bill. According to the official scorekeepers at CMS (Centers for Medicare and Medicaid Services), the Reid health care bill will actually not only increase our national health care costs by $234 billion over the next ten years, but will also reduce access and cut benefits for our seniors.

This nonbiased report simply proves what we have been saying all along – you cannot reform a $2.2 trillion health care system simply by spending another $2.5 trillion of hard-earned tax payer money. So despite all the rhetoric from the other side about this historic legislation, the only thing this bill accomplishes after imposing half a trillion dollars in new taxes and half a trillion dollars in Medicare cuts is to simply bend our nation’s cost curve upwards.

As a long time supporter of the Medicare Advantage program, I offered an amendment on the Senate floor to strip nearly $120 billion in cuts to the program that provides comprehensive health care benefits, including vision, dental and reduced cost-sharing for almost 11 million seniors.

Unfortunately, despite statements from the Congressional Budget Office that these cuts would result in reduced benefits for seniors enrolled in Medicare Advantage, Democrats in the Senate voted to keep the cuts in the package to finance more federal spending.  Well, this report is another reminder on why it was a mistake to not adopt my amendment. The CMS Actuary found that the cuts to the Medicare Advantage program in the Reid bill would not only result in “less generous benefit packages” for our seniors but more importantly it would decrease enrollment in Medicare Advantage plans by 33 percent.

Clearly, health care spending continues to grow too fast.  This year will mark the biggest-ever one-year jump in health care’s share of our GDP - a full percentage point to 17.6 percent. You can think of this as a horse race between costs and the resources to cover those costs.  The sad reality is that costs win year after year. 

Growing health care costs translate directly into higher coverage costs.  Since the last decade, the cost of health coverage has increased by 120 percent: three times the growth of inflation and four times the growth of wages.  Rising costs is the primary driver behind why we continue to see a rising number of uninsured in our country and why increasing number of businesses find it hard to compete in a global market. Without addressing this central problem we cannot have a real and sustainable healthcare reform bill.

So what does this $2.5 trillion tax-and-spend bill to address health care costs? Absolutely nothing. According to the Congressional Budget Office, the premiums for Americans who buy insurance on their own will actually increase by 10-13 percent while premiums for small and large groups will largely remain unchanged and continue to rise between 5-6 percent a year.

Let me make this point as clearly as I can:  This bill does not address the underlying problem of slowing down the growth of health care costs. It simply spends hundreds of billions in new subsidies to buy out the cost of these increases for families making up to $88,000 a year. So instead of fixing the real problem, this bill simply tries to spend its way out of it.

We have been hearing a lot recently about how the Democrats are throwing the government-run plan out of their bill to quickly jam this bill through the Senate before Christmas. American people need to be very careful about believing this propaganda.

The Democratic solution to the government plan is a Ponzi scheme that would embarrass Bernie Madoff himself.

Now let me be fair here. I have to rely on news reports to discuss these provisions. You heard me right – news reports. Why? Because no one knows what is actually in the bill. Despite the continuous claims of transparency, the real bill continues to change on a daily basis behind the closed doors of the Majority Leader’s office.

I am just glad to know that it is not just the Republicans who are in the dark about what is actually in the bill. Democratic members of this body are also in the same boat. It really is unbelievable. We are being asked to move forward on a legislation that will reform one-sixth of our economy and impact every American life and business, without knowing what’s actually in it. We have to rely on news reports. I have never seen anything like this in my 33 years of Senate service. 

One proposal that has come to the forefront in recent days is the idea of expanding Medicare to include coverage for Americans 55 and over. Currently Medicare is for Americans 65 and older. It is a bankrupt program that can barely pay for the benefits of 40 million seniors in it today.

Medicare is on a path to fiscal meltdown, with Part A facing bankruptcy by 2017. It underpays doctors by 20 percent and hospitals by 30 percent compared to the private sector forcing increasing number of providers to simply stop seeing our nation’s seniors. According to the June 2008 MedPAC report, 9 out of 10 Medicare beneficiaries have to get additional benefits beyond their Medicare coverage.

So what is Washington’s solution to address this program in crisis? Take up to 500 billion dollars out of this bankrupt program and at the same time push millions of more Americans into it.

The CMS report states in clear terms that the Medicare cuts in this bill could jeopardize our seniors’ access to care. The cuts will result in nearly 20 percent of all Part A providers like hospitals and nursing homes would operate in red within the next 10 years as a result of these cuts. 20 percent – that is a big number.

It should come as no surprise that this proposal faces strong opposition from a wide variety of provider groups – from doctors to hospitals – who are already under tremendous financial pressure due to underpayments from Medicare. Adding more lives to this insolvent program will only further limit their ability to see all Medicare patients, not just the new ones.

Even more troubling is the impact of this expansion on the premiums of our Medicare seniors from this ill-conceived policy. This expansion will encourage an influx of sick Americans from private coverage into Medicare that will simply raise premiums for seniors already enrolled in Medicare. 

So why are Democrats pushing this idea? Congressman Anthony Weiner said it best: "Extending this successful program to those between 55 and 64, a plan I proposed in July, would be the largest expansion of Medicare in 44 years and would perhaps get us on the path to a single payer model.”

The Democratic endgame on health care reform is crystal clear – make as many Americans as possible dependent on big government programs. Democrats believe that by making millions of Americans dependent on big government programs on the backs of their grandchildren’s future, they are taking a huge leap towards creating a permanent majority for themselves. Well let me tell you this – America is built on the spirit of self-reliance, not government handouts.

Poll after poll, especially the CNN poll which said that 61 percent of Americans were now opposed to this bill, and study after study are warning us that this is the wrong solution for our nation. This unknown bill which continues to change by the day behind closed doors is a direct violation of the president’s own pledge to only support reform that would reduce costs, protect benefits and not raise taxes. 

I sincerely hope that Democrats will step away from their arrogance of power and listen to the will of the American people. It is not too late for us to push the reset button and work on health care reform in a truly bipartisan manner. We are eager and willing, as we have been all year, to work on a responsible solution that every American can be proud of.