The Unaffordable Care Act

The Unaffordable Care Act
April 11, 2013

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)

From the beginning, the Obama administration claimed that the president's health care law would result in deficit savings. But the implementation of it has turned into a massive problem, and HHS Sec. Kathleen Sebelius is going to have to continue to find new ways of getting new funding for it by robbing from other parts of the program.

Consider the rising costs of exchange implementation:

Setting up the central piece of President Obama's healthcare law has cost the administration more than twice as much as originally intended.

The Health and Human Services Department (HHS) said in budget documents Wednesday that it expects to spend $4.4 billion by the end of this year on grants to help states set up new insurance exchanges. HHS had estimated last year that the grants would cost $2 billion.

The department also is asking Congress for another $1.5 billion to help set up federally run exchanges in states that do not establish their own.

The request for extra money comes at a critical time — exchanges are supposed to be up and running in every state by October. But it is also sure to meet hostility in Congress, which just last month denied HHS's last request for additional funds.

So Sebelius will turn to other aspects of the program to fill the two billion dollar gap:

To pay for the $1.5 billion HHS expects to spend on the law this year, Murray said it will exhaust the approximately $235 million left in the law’s original implementation fund. Sebelius can  draw down or shift money around from certain accounts, and Murray said HHS would get about $564 million that way, mostly from something called the Non-Reoccurring Expense Fund.

And to fund the race down the home stretch, the agency is dipping into what Republicans have criticized as a “slush fund” in the health care law itself, the Prevention and Public Health Fund. Obama health officials did not specify Wednesday how much they were taking from that fund. It originally included $15 billion over 10 years, but it was cut by $5 billion in a deal to extend the payroll tax holiday last year.

Sen. Tom Harkin (D-Iowa), the prevention fund’s chief defender, blasted the move in a statement Wednesday.

“Robbing prevention when we know these efforts can reduce chronic disease and lower health care costs goes against the very mission of health care reform,” said Harkin, who accused the Obama administration of breaking its promise not to raid the fund.

But the real problem isn't just the costs borne by taxpayers -- it's the costs born by individuals and small businesses, who will continue to see the costs of their premiums rise:

Plans to bend the health care cost curve are pretty plentiful in the nation’s capital. Lots of think tanks and coalitions have plans to cut billions (even trillions) in health care spending.

The Partnership for Sustainable Health Care argues it’s something different. The new alliance, which includes health plans, a hospital and consumer advocates, isn’t looking to bring fresh ideas to the debate. It recognizes this city has no shortage of think tank proposals.

Instead, the Partnership wants to start putting political muscle behind the ideas that already exist — and, after it does that pass legislation that would control health care costs in a way the Affordable Care Act doesn’t...

The group has met for just over a year now and includes some of the exact same interests that supported the Affordable Care Act like America’s Health Insurance Plans, Families USA and Ascension Health, the largest Catholic hospital system in the country.

While all support the Affordable Care Act, they tend to agree that additional legislation will be necessary to control health care costs.

“The Affordable Care Act takes some significant steps with respect to cost,” Pollack says. “None of us are fooling ourselves that the enormous contribution of the health law is on coverage.”

The group released Thursday morning a five-pronged proposal that it will now begin reaching out to other health care stakeholders. Much of it does indeed look familiar to those who have followed the health care debate. It proposes tethering doctors’ payments to value, factoring cost-effectiveness into what treatments plans cover and setting better quality metrics to measure what counts as top-notch health care.

No wonder Senators who supported the law are worried about the implementation of it. They understand what's at risk if Obamacare fails to deliver on its many promised benefits.

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)