How Health Care Reduces the Deficit

Republicans have been living by the Congressional Budget Office’s numbers and some say the GOP now must die by those numbers.Not so fast. Above the fold on page one of the Wall Street Journal today is this article that “New Math Boosts Health Plan.” What new math?The CBO has released numbers on the Senate’s health care plan — never mind that the legislation remains mostly in vapors and key details will not be released until it is too late for a new CBO score. In any event, the CBO projects the Senate health care plan will cost more, but will lower the deficit.How can a plan go from $774 billion over ten years to $829 billion over ten years and lower the deficit? Exactly in ways Barack Obama said would not happen.

The nonpartisan Congressional Budget Office found the sweeping measure will cover 94% of nonelderly legal U.S. residents, up from about 83% currently. The bill will cut the deficit by $81 billion over the 10-year period, owing to trims in Medicare spending and new taxes.

What? They’re going to cut Medicare and raise taxes? How can that be?According to Barack Obama in his speech to Congress last month, “The middle class will realize greater security, not higher taxes. And if we are able to slow the growth of health care costs by just one-tenth of 1 percent each year — one-tenth of 1 percent — it will actually reduce the deficit by $4 trillion over the long term.” But the Wall Street Journal tells us

Most of the bill’s funding comes from $404 billion in cuts to Medicare and other government insurance programs that Democrats say will reduce waste but won’t hurt recipients’ benefits. An additional $201 billion comes from a 40% excise tax on particularly generous health-insurance plans levied on insurers. The rest comes from annual fees on insurers, medical-device makers and pharmaceutical companies, as well as a series of other changes to the tax treatment of health expenses.

Those fees are actually taxes — like a tax on breast pumps for nursing moms, etc.Then there is the “waste, fraud, and abuse” in Medicare. One must first wonder why the Democrats are waiting until now to take care of it. One must then wonder if Nancy Ann DeParle, the women charged with rooting out the waste, fraud, and abuse will be up to the job, considering she has failed every time she tried and then lined her pocket in the private sector by capitalizing on her failure.