Healthcare Reform Update

  • ObamaCare Chooses Pharma Over Seniors. During last week’s negotiations, Senator Bill Nelson (D-Fla.) proposed an amendment to ObamaCare which would have closed Medicare’s so-called ‘doughnut hole,’ saving 3 million ‘in-the-gap’ seniors thousands of dollars and saving taxpayers a CBO-estimated $50 billion over 10 years. Nelson’s proposal, however, would have violated the $80 billion agreement which President Obama and Senate Finance Chairman Max Baucus cut with the pharmaceutical industry. Said Baucus during the meeting, “Although the goal is good, [breaking the deal with the drug industry is] inappropriate…The White House did reach an agreement.” (http://swampland.blogs.time.com/2009/09/24/finance-committee-democrats-buck-the-white-house/)
  • ObamaCare Targets Medicare Recipients. ObamaCare as expressed in the Baucus Bill cuts $123 billion from Medicare Advantage (MA), and, as the Congressional Budget Office (CBO) Director testified, half of the benefits currently provided to seniors under Medicare Advantage would disappear under the Baucus Bill. These proposed cuts come in spite of a report from the Government Accountability Office (GAO) stating that MA beneficiaries saved an average of $804 per year in reduced cost-sharing and premiums.
  • Congressional Democrat Squares with the American Public. Representative Michael Michaud (D-Me.) said of ObamaCare, “I know [the Democrat leaders] say seniors aren’t going to lose their benefits, but quite frankly, I think that’s a little disingenuous.”

The Baucus Solution to Health Care Cost: Stick States with the Tab. Quietly sitting in the Senate Finance Committee today is a Baucus Bill proposal that would dramatically expand Medicaid at no cost to the federal government. How? It requires states to pay for legislation drafted, amended and passed by federal legislators.

The CBO estimates that the Baucus Bill’s proposed Medicaid expansion would impose a $37 billion unfunded federal mandate on state governments. This proposal would add cost at a time when states can scarcely afford it. Currently, 48 states have a total shortfall of $168 billion in their 2010 budgets and shortfalls are expected to increase to $180 billion in 2011 budgets.

As this recent Wall Street Journal article makes clear, Medicaid is the main culprit behind run-away state spending. According to the National Association of State Budget Offices, Medicaid is the second largest segment of most state budgets (21%) even before the Baucus Bill. For some states, Medicaid’s imposition is as high as 39% (Ohio). As the article asserts, these unfunded mandates will crowd out other budgetary priorities or result in a wave of tax increases-or both.

With ObamaCare in the Senate Finance Committee, Congressional Democrats are not only setting their budgetary priorities, but their political priorities as well. Unfortunately, seniors needing care, taxpayers hoping for relief and state leaders struggling with ballooning budgets simply aren’t very high priorities to most Senate Democrats.

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