Cochran, Wicker Request Analysis of Long-Term Costs of Senate Health Reform Plan

New Report Says House Reform Bill Could Jeopardize Medicare Coverage for Seniors

November 17, 2009

WASHINGTON – U.S. Senators Thad Cochran and Roger Wicker today announced that they have asked Senate Majority Leader Harry Reid to allow his health reform package to be submitted for a more thorough analysis to determine its long-term costs to the nation.

The Mississippi Senators are among 25 Senators who have requested that Reid send his health care legislation to the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) for analysis before the legislation is brought to the Senate floor for debate.  The CMS analysis would be in addition to a Congressional Budget Office (CBO) cost estimate review of the legislation.

“Senators should have the necessary information and time required to make a careful and educated judgment on legislation intended to significantly alter American health care.  Because health care represents such a major part of our economy, a thorough assessment of the long-term costs of reform would be useful to all Senators before this legislation is presented for debate,” Cochran said.

“After studying the recently passed House health care bill, CMS found it would lead to higher costs, cut Medicare by half a trillion dollars, and jeopardize seniors’ access to care.  That is not the kind of reform Americans deserve.  Before Majority Leader Reid asks the Senate to consider his health care proposal, Senators and the American public need to know whether it would have the same negative impact as the House bill,” Wicker said.

“One of the most important issues facing us as we review this legislation is its effect on overall health care spending,” the letter to Reid stressed.  “The President has repeatedly stated that he believes health care reform should control health care costs.  Achieving that objective, as you know, means more than simply employing draconian cuts in Medicare spending and creating numerous new taxes to minimize the effect of creating a vast new health care entitlement on the federal deficit.  Bending the cost curve means curbing the rate of all health spending.”

The letter, spearheaded by U.S. Senator Mike Johanns (R-Neb.), requests the CMS analysis because CBO cost assessments have not included the projected long-term cost impacts of House and Senate health reform measures beyond 10 years.  CMS has provided an assessment on the House health reform legislation, but it was not until after that legislation (HR.3962) narrowly passed on Nov. 7.

The 31-page CMS report on HR.3962 released Friday found that the House bill will create a $289 billion increase in health care spending by 2019 and cut Medicare by $571 billion.  It said some aspects of the Medicare cuts “may be unrealistic” and could “jeopardize access to care” for seniors.

“Over time, a sustained reduction in payment updates, based on productivity expectations that are difficult to attain, would cause Medicare payment rates to grow more slowly than, and in a way that was unrelated to, the providers’ cost of furnishing services to beneficiaries.  Thus, providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and might end their participation in the program (possibly jeopardizing access to care for beneficiaries),” the CMS report states.

The CMS report also states that the House-passed reform bill could prompt small business owners to terminate health care coverage for employees so that those workers could instead qualify for subsidized coverage through an expanded Medicaid program.