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Jim Lentini: Dissecting federal health care reform

Business Commentary

Posted: May 17, 2010 3:31 p.m.
Updated: May 18, 2010 4:55 a.m.
 
Fourth in a series

After three weeks of reporting the details of the health care plan signed into law by the president on March 23, we are now getting reports by the experts on the problems that will have to be dealt with by those implementing the plan - we the people, who will have to be covered according to the plan, and must pay for the program, both by premiums and taxation.

As I wrote last week, if you missed the column in The Signal by Deroy Murdock ("Barely on runway, Obamacare poised to crash," May 1), a columnist with Scripps Howard News Service, following are some excerpts of his column.

Murdock wrote that five weeks after the president signed the bill into law, it already resembled an overweight airplane lumbering down the tarmac, poised to crash and burn soon after takeoff.

This opinion is similar to my analogy that, "if your home represented the budget deficit of this country, and the kitchen was on fire, would you double the size of your home before you put out the fire?" If you didn't know it, our federal government borrowed 45 percent of the budget deficit last year. What private business could survive with that type of spending and financing?

Murdock quoted the president speaking to joint session of Congress last Sept. 9: "This bill will slow the growth of health care costs for our families, our businesses and our government."

But according to Medicare's Office of the Actuary, in a devastating, independent 38-page analysis released the end of April, Chief Actuary Richard Foster forecast: "The growth rate reductions from productivity adjustments are unlikely to be sustainable on a permanent annual basis. We show a negligible financial impact over the next 10 years for the other provisions intended to help control future health care cost growth."

As noted in last week's report, the senior benefit change occurring this year is that seniors will see a rebate of $250 this year for "the donut hole" expenses for the Part D coverage, then next year will begin 50 percent discount for prescriptions in the "donut hole."

To me, this offers a small benefit to seniors, yet the government is pulling about $450 billion from Medicare benefits. What's going to happen when the Baby Boomers hit Medicare by the time most of this bill's benefit restrictions and benefits affect Americans in 2014?

What this means - now that we are getting experts evaluating and reporting on the health care bill - is that the costs are going to be prohibitive and won't reduce health care costs to Americans, both in their premiums or as taxpayers. But it will sure create many more government jobs.

It was reported at the workshop I attended by the Foundation for Health Coverage Education (FHCE), that the IRS will hire 16,000 new agents to audit this new system. (I guess not just adding a new line to the 1040 form to report your insurance and premium you pay annually isn't enough).

Of course, if you are a member of the right union or Congress you can have a "Cadillac Plan" and won't be penalized.

Murdock's column quoted Grace-Marie Turner of the Galen Institute, commenting about the article by Medicare's Office of the Actuary: "This is an objective report by administration actuaries that shows this sweeping legislation has serious problems."

Foster calculated: "Obamacare will boost U.S. health spending by $311 billion through 2019, while federal medical outlays will grow by a net total of $251 billion". Murdock reported that Foster's study delineated the canyon between Obama's warm words and the chilly disappointment that awaits those who expect Obamacare to do well.

Foster also reported that Obamacare's first 10 years of operations would cost $2.5 trillion. Americans for Tax Reform noted Obama's remarks as he introduced his deficit commission on May 1: "It's important that we not restrict the review or the recommendations that this commission comes up with in any way. Everything has to be on the table." (I don't think the president is including his health care bill).

In closing the column, Murdock reported that after all this hassle, double talk and expense, Foster concluded an estimated 23 million people would remain uninsured in 2019.

Remember what was reported in a previous column by the FHCE: Here in California, 80 percent of the uninsured qualify for existing public programs already in place. And these public programs are available in most states, since they are federally funded.

It's obvious to me that those who initiated this new national health plan had a different agenda. Make sure to express your opinions to your legislators.

Jim Lentini, CLU, ChFC, IAR is president of Lentini Insurance & Investments Inc. His column reflects his own views and not necessarily those of The Signal.

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