Sunday, March 20, 2011

The Obama Administration, the Health Care Law, and Double Counting, Again?

Back in November of 2010 noted that Donald Berwick refused to comment when confronted during a Senate hearing about the administration's claim that the Patient Protection and Affordable Care Act extends the Medicare Trust Fund.  It seems that Donald Berwick is standing by the Obama administrations double counting of savings in the new health care law.


For those in need of a refresher, here’s Medicare’s actuary:
In practice the improved (Medicare hospital insurance) financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions.
To describe the full amount of HI trust fund savings as both improving the government’s ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings.

Now you see that both the CBO and Medicare actuary's analysis of savings from the health care law differ from that of the Obama administration.  So, basically, both the CBO and medicare actuary findings conclude that the Obama administration's wrong. Maybe, that's why Berwick refused to answer the question?

Recently, Rep. John Shimkus pointedly forced Health and Human Services Secretary Sebelius to admit to the fact that the Obama administration is double counting the savings from the health care law.  The Obama administration is using trickery to give the appearance that there can be savings in the budget while using that same savings to fund another program - "the $500 billion cut in Medicare that supposedly goes for both cost control and to fund other parts of the program."   


In her first appearance before the House Energy and Commerce Health Subcommittee since the health-care law passed, Kathleen Sebelius responded to a line of questioning by Republican Rep. John Shimkus of Illinois about whether $500 billion in Medicare cuts were used to sustain the program or pay for the law.
“There is an issue here on the budget because your own actuary has said you can’t double-count,” said Shimkus. “You can’t count — they’re attacking Medicare on the CR when their bill, your law, cut $500 billion from Medicare.”
He continued: “Then you’re also using the same $500 billion to what? Say your funding health care. Your own actuary says you can’t do both. […] What’s the $500 billion in cuts for? Preserving Medicare or funding the health-care law?
Sebelius’ reply? “Both.”
In other words, money can only be used once. Since the Medicare savings is being spent elsewhere on expanded health care coverage, it is not really being employed to extend Medicare solvency. To claim an improvement in Medicare financing is to mislead about the effects of recent legislation.

A couple days ago I received an email from my Congressman, Rep. Tim Murphy, that reveals more double counting in the health care law -  an $86 billion Ponzi scheme in the health care law.

"Efforts to calculate the true cost of the healthcare law continued at the Energy and Commerce Committee on Thursday, where a hearing explored the financial integrity of a new long-term insurance “benefit” called the Community Living Assistance Services & Supports (CLASS) program. Intended to provide spending cash to workers who become disabled, CLASS has been characterized by accountants, and even the Administration’s own Secretary of Health and Human Services Kathleen Sebelius, as “totally unsustainable.”

"The CLASS program is a new government entitlement established by the healthcare law that would be funded with premiums deducted directly from workers’ paychecks. If a worker became disabled and had paid into the program, they would collect $50 a day from the government. But the Congressional Budget Office has suggested that the CLASS program will attract the sickest and most at-risk beneficiaries, therefore requiring massive taxpayer subsidies to keep CLASS afloat beyond ten years.

"During questioning by Rep. Murphy at Thursday’s hearing, a senior Administration official admitted that instead of using premiums paid into CLASS to pay benefits, the government was using the premiums to pay for the healthcare law.

“If any insurance company began collecting premiums and then tried to spend $86 billion before paying out a single penny in benefits, it would rightly be prosecuted,” said Murphy. “Last time I checked, such Ponzi schemes are illegal in this country, and this is just the newest in a long string of programs that will have to be de-funded or repealed outright.”  

1 comment:

Woodsterman (Odie) said...

What they're trying to say is federal bean counters can't count.