Fact-checking Obama on Healthcare Tuesday, August 11, 2009 8:21 PM
By: David A. Patten
Several statements that President Barack Obama made at his town hall meeting at Portsmouth High School in New Hampshire on Tuesday merit closer inspection. Among them:
Nobody will lose their current plan: “Now, the way we have approached it, is that if you’ve got healthcare under a private plan, if your employer provides you healthcare or you buy your own healthcare and you’re happy with it, you won’t have to change.”
Fact: A nonprofit healthcare research organization, the Lewin Group, concluded in a study commissioned by the Heritage Foundation that more than 88 million Americans would lose their current insurance under the 1,018-page plan originally submitted to Congress. “It is hard to argue against the facts,” Nina Owcharenko, deputy director of the Center for Health Policy Studies for the Heritage Foundation, tells Newsmax. “The Lewin Group estimates more than 88 million could lose their current employer-based coverage under the House bill. Other estimates, by the Congressional Budget Office and Urban Institute, although lower than Lewin, still find millions of Americans could lose their current coverage.”
Obama objects to special interests: “But let’s face it, now is the hard part – because the history is clear – every time we come close to passing health insurance reform, the special interests fight back with everything they’ve got.”
Fact: Actually, pharmaceutical companies and health insurance firms have tried hard to work with the administration to shape the proposals coming out of Congress. “In stark contrast to the healthcare reform debate in the 1990s,” reports The Hill, “the health insurance industry has refrained from launching attacks on Obama or the plans working their way through Congress. Insurance lobbyists have been very active on both ends of Pennsylvania Avenue trying to shape the legislations, but so far the industry has not used its considerable resources to stop the process, despite numerous Democratic proposals it opposes.” Robert Zirkelbach, communications director for the America’s Health Insurance Plans trade organization, tells Newsmax: “The inconvenient fact is that our industry strongly supports healthcare reform and we actually proposed last year the insurance market reforms and consumer protections that people are talking about today.”
Obama on prescription drugs: “Now, in terms of savings for you as a Medicare recipient, the biggest one is on prescription drugs, because the prescription drug companies have already said that they would be willing to put up $80 billion in rebates for prescription drugs as part of a healthcare reform package. Now, we may be able to get even more than that.”
Fact: The White House admitted last week that a New York Times report that the administration had cut a backroom deal with the pharmaceutical companies was accurate. The administration desperately wanted to show that private companies were supporting its healthcare initiatives, so it offered the drug companies a deal: If they would sign onto the plan and agree to $80 billion in cuts, the administration would guarantee it would not allow Congress to go back to them for further reductions in drug prices. Former Clinton administration Labor Secretary Robert Reich wrote in a Salon.com column that he was “appalled” that Obama – who promised a new type of government independent of lobbyists – had cut a secret deal with Big Pharma. “We’re on a precarious road – and wherever it leads, it’s not toward democracy,” Reich wrote. Footnote: Obama’s secret deal with the drug companies was exposed after the companies sought assurances, due to suggestions that they might be asked to make even deeper cuts despite the White House agreement. Obama’s statement that “we may be able to get even more than that” will resonate in corporate boardrooms, as CEOs evaluate whether they can trust the White House to live up to its end of any bargains.
Obama spins ‘public option’: “Now, the only thing that I have said is that having a public option in that menu would provide competition for insurance companies to keep them honest.”
Fact: Obama’s effort to distance himself from the increasingly unpopular public option plan – which originally meant a publicly subsidized and operated healthcare insurance option – is complicated by his prior statements. Before he began his presidential run in earnest, Obama favored universal, single-payer (government) health insurance. In a June letter to Sen. Ted Kennedy, D-Mass., posted on Obama’s Organizing for America Web site, Obama stated: “I strongly believe that Americans should have the choice of a public health insurance option operating alongside private plans. This will give them a better range of choices, make the healthcare market more competitive, and keep insurance companies honest.” In July, when his chief of staff suggested the public option might be jettisoned, Obama released a statement reaffirming his commitment to the proposals then on the table for government-subsidized healthcare, saying it was “one of the best ways to bring down costs, provide more choices and assure quality is a public option that will force the insurance companies to compete and keep them honest.”
Preventive care saves money: “And finally – this is important – we will require insurance companies to cover routine checkups and preventive care, like mammograms and colonoscopies – (applause) – because there’s no reason we shouldn’t be catching diseases like breast cancer and prostate cancer on the front end. That makes sense, it saves lives; it also saves money – and we need to save money in this healthcare system.”
Fact: No one can dispute that catching diseases as early as possible is a laudable goal. But the president’s assertion that preventative healthcare will generate savings and reduce healthcare costs – as logical as it may sounds – is a myth. Douglas W. Elmendorf, director of the Congressional Budget Office, recently addressed this point in a seven-page letter posted on CBO.gov. “Although different types of preventive care have different effects on spending, the evidence suggests that for most preventive services, expanded utilization leads to higher, not lower, medical spending overall.” While that finding may seem counterintuitive, Elmendorf explains: “To avert one case of acute illness, it is usually necessary to provide preventive care to many patients, most of whom would not have suffered that illness anyway. Even when the unit cost of a particular preventive service is low, costs can accumulate quickly when a large number of patients are treated preventively.” Again, that’s not to suggest that preventative care isn’t a good idea. But the unfortunate reality is it will drive healthcare costs up, not down.
Obama promises reform won’t increase the deficit: “First of all, I said I won’t sign a bill that adds to the deficit or the national debt. OK? So this will have to be paid for.”
Fact: The Congressional Budget Office has estimated the cost of healthcare at more than $1 trillion over 10 years. The proposals made to reduce that cost – such as raising taxes on those earning more than $250,000 per year – have yet to make the bill deficit-neutral. The CBO estimates it will increase the deficit by $239 billion over the next decade. But even if Obama and congressional Democrats find a way to bridge that gap, the real cost of the current proposals comes after year 10. Based on CBO estimates that the net new costs of the program will increase by 8 percent per year, The Wall Street Journal estimates that by 2020, red ink generated by current proposals will tally over $188 billion – per year. The Journal adds, “As for the spending, when has a new entitlement ever come in under budget?”
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