BostonHerald.com
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Real health reform beckons new start

By June O’Neill
Saturday, December 26, 2009

To ease concern over costs of health care reform, politicians point to Congressional Budget Office reports that label the legislation as deficit-reducing. But the cost estimates presented by CBO camouflage the true costs. While revenues in the Senate bill begin in the first year, costs do not kick in until 2014, resulting in 10 years of revenues and six years of costs.

Once you look past this accounting gimmick, the gross cost of the Senate bill over a full 10 years of implementation is in excess of $2 trillion, more than twice the current estimate. And even those costs are low-balled.

And while Congress has specified deep cuts in Medicare reimbursements for medical service providers, if implemented as intended the cuts in physician payments will induce more doctors to treat fewer Medicare patients. Conversely, if the cuts in doctor pay are rescinded, the new law will provide another huge addition to the national debt.

And many of the proposed new tax increases may also prove politically infeasible.

It is undeniable that health reform is needed. The funding of Medicare and Medicaid is near crisis levels and the programs in their current form are unsustainable. But the proposed Senate and House bills make no structural changes that would right either of these programs.

A more sensible way to increase the efficiency of Medicare resources would be to convert Medicare into a defined contribution plan, providing vouchers to beneficiaries to buy approved private plans similar to the popular Medicare Advantage plans that also face the chopping block.

More . . .

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