Obama administration disputes government report on reform's higher costs

Oct 23 2009

Administration officials quickly rejected a new analysis that found "the nation's medical costs will keep spiraling upward even faster than they are now under Democratic legislation pending in the House," the Associated Press reports.

The AP added: "Republicans said the report is a warning sign that health care legislation is likely to fall short of President Barack Obama's goal of 'bending the cost curve' by slowing torrid rates of medical inflation. The Obama administration immediately challenged the analysis, saying it is out of date. ... The report from the Office of the Actuary, which does long-range cost estimates for Medicare, carried an unusual disclaimer, saying that it 'does not represent an official position' of Health and Human Services or the rest of the administration" (Alonso-Zaldivar, 10/21).

"While health spending as a share of gross domestic product would grow to 20.8% under current law, the study found that the House bill would cause it to grow to 21.3% of GDP," Dow Jones Newswires/Wall Street Journal reports. Rep. Dave Camp, R-Mich., said the changes "will only make the situation worse," while Rep. Pete Stark called it "incomplete and out of date relative to what will ultimately be voted on in the House of Representatives" (Yoest and Vaughan, 10/21).

The increase in spending, "amounting to $750 billion, would largely be the result of increased demand for healthcare services because 34 million people would have health coverage," The Hill reports. The actuary's office wrote, "We estimate that the provisions of H.R. 3200 that were designed, in part, to reduce the rate of growth in health care costs would have a relatively small savings impact." There was some good news for Democrats: "according to the report, 40 percent of the 27 million people who would buy coverage through the health insurance exchange in the bill would choose the public option because its premiums would be about 11 percent lower than private insurance" (Young, 10/21).