Cochran & Wicker: Report Raises Serious Concerns About Costs & Impact Of Senate Health Reform Bill

New Report Says Senate Reform Measure Would Increase Costs, Imperil Coverage

December 14, 2009

WASHINGTON, D.C. – U.S. Senators Thad Cochran and Roger Wicker today said serious concerns are raised about the Senate health care reform bill in a new independent analysis that indicates the legislation would fail to contain health care costs and could result in health care shortages for many Americans.

The Centers for Medicare and Medicaid Services (CMS) Office of the Actuary on Friday issued a 34-page analysis of the health care reform bill crafted by Majority Leader Harry Reid.  The Senate has been debating the Patient Protection and Affordable Care Act (HR.3590) for the past two weeks.

The report raises serious concerns about the Senate health care reform plan, indicating that major provisions in the 2,074-page measure could increase national health care expenditures by more than $234 billion, jeopardize access to Medicare coverage for seniors and lead small business employers to drop health insurance coverage for their workers.

“This new report affirms a lot of the concerns that have been raised about the health reform bill before the Senate.  The analysis raises brings to light significant questions about the affordability and consequences of the legislation.  I believe it is another indication that the Senate should not rush to pass this bill, but rather step back and look at a more workable and affordable reform plan,” Cochran said.

“This nonpartisan report confirms that this massive $2.5 trillion dollar bill will actually increase health care costs, not lower them.  The bill would also jeopardize seniors’ access to health care by slashing Medicare by nearly half a trillion dollars.  That is not the kind of reform Americans deserve,” Wicker said.   

Before the Senate began its debate of the Reid heath care bill, Cochran and Wicker signed a letter asking Reid to submit his plan to the CMS Office of the Actuary for analysis.  The letter asserted that all Senators should have the CMS analysis, in addition to a Congressional Budget Office (CBO) cost estimate review, before considering the Reid plan.

The CMS report on HR.3590 released Friday states the projected savings from Medicare cuts in the Reid plan are “unrealistic” and “unrelated to the providers’ costs of furnishing services to beneficiaries.”  It also warns that health care shortages are probable because “providers might tend to accept more patients who have private insurance (with relatively attractive payment rates) and fewer Medicare and Medicaid patients, exacerbating existing access problems for the latter group.”

In terms of costs, the CMS report says that under HR.3590, national health expenditures would increase by $234 billion and eventually amount to about 20.9 percent—more than 1 out of every 5 dollars—of the Gross Domestic Product.  The nation currently spends about $2.5 trillion a year on health care, or about 16 percent of the GDP.

 The CMS report also states that the Senate reform bill could result in an estimated 17 million workers losing employer-sponsored insurance coverage so that their employees could qualify for the subsidized coverage offered through the bill’s insurance exchange program.