JustCare

Tag: CBO

  • Congressional Budget Office reports benefits of Medicare for all over corporate health insurance

    Congressional Budget Office reports benefits of Medicare for all over corporate health insurance

    David Sirota writes for the Daily Poster on the latest report from the Congressional Budget Office revealing that ending corporate health insurance in favor of a publicly-administered health insurance system like traditional Medicare would help our economy, help working people and increase life expectancy.

    The CBO recounts the benefits of Medicare for all over our failing corporate health insurance system. Specifically, here’s what its report says:

    • Health care costs would fall for US households and premiums would go away entirely. Administrative costs would also fall leading to greater productivity in the US economy, better health and longer lives.
    • Working people would work less of their own volition, though they would be paid more. Reduced out-of-pocket health care costs would permit people greater freedom to engage in activities they enjoyed without compromising their living standard.
    • People would have more disposable income, which they could spend on things other than health care and could also save for the future. GDP would not be hurt. The labor force would increase, along with worker productivity across the economy and capital stock.
    • States would benefit from a budget surplus and could reduce tax rates, spend more on their needs and/or public services.

    The implication of the CBO’s findings is that employer-based health care–corporate-run health care–makes working people work harder and longer in order to pay for health insurance and medical care. With single-payer/Medicare for all, people would earn higher wages, be able to retire earlier, and would not have to work as many hours a week. Middle and lower-income households would see their wages increase the greatest percent and their out-of-pocket costs fall the greatest percent.

    The CBO looked at the effects of better coverage for home- and community-based care services. These long-term care services help people with bathing, dressing, toileting and other activities of daily living.

    But, Medicare for all in any form is going nowhere because the corporate health care stakeholders have the resources and power to control policymakers and public policy. President Biden launched his presidential campaign with the CEO of Blue Cross and promised to veto Medicare for all legislation. He favors subsidized corporate health care.

    At the state level, the situation is arguably worse. In California, a single-payer bill died in the legislature in Democratic hands. What helped kill it? Among other things, corporate political contributions, including a $1 million contribution from Blue Shield.

    Here’s more from Just Care:

  • Government agency finds Medicare for all saves money

    Government agency finds Medicare for all saves money

    Matt Bruenig writes for Jacobin about the latest Congressional Budget Office (CBO) estimate of the cost of Medicare for All. The CBO finds that, with Medicare for all, everyone in the country would be guaranteed health insurance at little or no cost and overall health care spending would fall. Medicare for all saves money!

    In arriving at its estimated cost, the CBO looked at the number of additional people who would need to be insured, administrative savings from having one system for enrolling everyone and paying providers, along with savings from negotiated rates to providers and pharmaceutical companies. The CBO considered four different options for designing Medicare for all and found savings from all of them ranging from $42 billion to $743 billion in one year. The only design that cost more paid doctors, hospitals and drug companies higher rates and included coverage for long-term services and supports–home care and nursing home care. That design was projected to cost $290 billion a year more.

    The design closest to the Medicare for all legislation in the House and Senate–which pays lower rates to providers–is projected to save $650 billion in one year. Even with coverage for long-term services and supports, it saves about $300 billion annually.The CBO finds tremendous administrative savings from moving to Medicare for all.

    The CBO determines that administrative costs would be lower than traditional Medicare’s, which are 2 percent, because the federal government would not have to spend money establishing whether people were eligible for coverage. It would also save money on the cost of collecting premiums, which it would not need to do. Consequently, administrative costs would fall to 1.5-1.8 percent, which literally translates to hundreds of billions of dollars in savings.

    In sum, the CBO concludes what myriad other single payer/Medicare for All studies conclude. If the US moved to Medicare for all, everyone would be insured and it would cost less than we spend today on healthcare. The issue is not the cost but the political challenges.

    Here’s more from Just Care:

  • Lowering drug prices will not affect innovation

    Lowering drug prices will not affect innovation

    Peter Bach, a physician at Memorial Sloan-Kettering Cancer Center, explains in Bloomberg News that lowering drug prices will not affect drug innovation in a meaningful way. We will still find cures and more people will be able to afford the medications they need.

    The Congressional Budget Office (CBO) analyzed Speaker Nancy Pelosi’s bill to lower drug prices on up to 35 brand-name drugs a year and found that new drugs will continue to be discovered at almost the same rate as today. The CBO projects only a three-five percent drop in new drug discoveries.

    Bach believes if Pelosi’s bill were enacted, pharmaceutical companies will have less incentive to develop drugs we don’t need. For example, a drug that treats Duchenne muscular dystrophy, Exondys 51, which costs almost $1 million a year here has not been found to be effective in Europe so is not available there.

    Under Pelosi’s plan, Medicare and others would pay a maximum of 1.2 times what Germans, Australians, Canadians, Japanese and French pay for a number of high-cost brand-name drugs that lack serious generic competition. Any drug not sold abroad would be priced at Medicaid rates. (Today, Americans pay four times more than the Swiss for our drugs. However, some specialty drugs, such as Kymriah, a CAR-T cell therapy, which treats leukemia, costs about the same in the UK as in the US. So, there’s still plenty of financial incentive for pharmaceutical companies to discover new drugs of this type.)

    Medicare currently is forbidden by law to negotiate drug prices with pharmaceutical companies. It cannot negotiate prices of retail drugs we buy at the pharmacy. It must pay the price pharmaceutical companies charge for intravenous drugs administered in doctors’ offices. And, Medicare must reimburse hospitals for the cost of drugs administered in hospital no matter how high. Drug prices paid by commercial insurers are about the same as Medicare’s.

    The CBO estimates that, if Pelosi’s bill passed, the federal government would save $345 billion on Medicare between 2023 and 2029. Medicare’s Office of the Actuary projects that individuals, states and employers would save an additional $243 billion. (Note: Savings on drug costs would be far greater if we paid the average of what other wealthy countries paid for all our drugs.)

    If Pelosi’s bill passed, the savings could be used for targeted public drug innovation through the NIH. Or, savings could be used to improve Medicare benefits.

    Of course, savings are only a piece of the story. Today, Americans with health insurance are seven times less likely to take their medicines than people in other wealthy countries. They are too expensive.

    To be clear, until Democrats have control of the Senate, there’s little if any chance Pelosi’s bill will be enacted into law. But, at least now there’s compelling evidence that we can lower drug prices with little effect on innovation.

    If you support making drug prices in the U.S. affordable, please sign this petition.

    Here’s more from Just Care:

  • GOP tax bill cuts $400 billion from Medicare

    GOP tax bill cuts $400 billion from Medicare

    On Friday December 1, 51 Senate Republicans voted to slash Medicare as much as $400 billion  over the  the next ten years in order to pay for tax cuts to millionaires and billionaires. The tax bill undermines Medicare as we know it and threatens to increase costs to the nearly 60 million older adults and people with disabilities who depend on Medicare for their health security. It also destabilizes the health insurance exchanges, jeopardizes the health care of millions of younger Americans and is certain to increase the number of people who face medical bankruptcy.

    How does the tax bill threaten Medicare? The Senate tax bill would add $1.5 trillion to the deficit over ten years. A “pay-as-you-go” rule currently in place requires Congress to pay for those deficits. It triggers automatic cuts to Medicare and other mandatory spending programs, including affordable housing, nutrition programs and student loans. The pay as you go rule allows Medicare cuts to be as much as 4 percent, $25 billion, beginning this fiscal year.  Medicaid, Social Security and food stamps are exempt from the pay as you go rule.

    With a cut to Medicare this large, doctor and hospital rates would likely decrease, reducing the number of doctors willing to treat older adults and people with disabilities. The cut cannot affect either Medicare benefits or premiums and out-of-pocket costs. Congress could waive the pay as you go provision, but it would require 60 votes and, it seems unlikely it would.

    Before Congress takes its final vote on the tax bill, the Senate bill needs to be reconciled with the House bill. Americans need to pressure their members of Congress to oppose this bill.  Here are the key differences between the two bills.

    1. The House bill eliminates the tax deduction for large medical expenses, which benefits many older adults, who use a lot of health care, and 8.8 million Americans in total. The Senate bill retains this deduction.
    2. The House bill retains the individual mandate in the Affordable Care Act. Everyone would continue to need to have health insurance coverage or pay a penalty. The Senate bill repeals the mandate, which the CBO projects would leave 4 million more people uninsured in 2018 and 13 million people uninsured by 2025. It would drive up premiums and out-of-pocket costs for everyone in the state health insurance exchanges and put Obamacare at serious risk. Many people who opted out of health insurance in the exchanges, would buy skimpy, limited coverage, which might not cover their basic medical needs or pre-existing conditions.

    These dangerous threats to the nation’s health come with a multi-billion dollar cost to middle income Americans and a multi-billion dollar gain to millionaires and billionaires. A November 26, CBO report finds that people earning between $40,000 and $50,000 will pay $5.3 billion more in taxes than they currently would, while people earning $1 million or more would pay $5.8 billion less.

    Here’s more from Just Care:

  • If Trump undermines ACA, CBO says health insurance premiums will soar

    If Trump undermines ACA, CBO says health insurance premiums will soar

    President Trump has not succeeded on his promise to repeal the Affordable Care Act. Now, the Congressional Budget Office (CBO) says health insurance premiums will soar if Trump follows through on his vow to undermine the ACA. In fact, Trump’s plan to destroy the ACA would cost the U.S. almost $200 billion over the next ten years.

    According to the CBO, 2018 premiums would rise by 20 percent if Trump refuses to pay the ACA’s copay and deductible subsidies, called “cost-sharing reductions,” guaranteed to people with incomes under 250 percent of the federal poverty level. By 2025, premiums would rise by 25 percent. Insurers would need to raise premiums to make up for their lost copay and deductible revenue.

    Because the federal government helps pay the premiums of people with incomes under 400 percent of the federal poverty level who enroll in health plans through the state health insurance exchanges, a 20 percent premium increase would mean the government would have to pay an additional $194 billion in premium costs.

    The CBO further projects that some health plans would leave the ACA marketplace, reducing choice and competition. And, 5 percent of health care markets would not have a health plan in 2018. As of now, in 2018, one county in Wisconsin and one in Colorado will have no ACA plan options.

    Higher insurance premiums would mean that the federal deficit would increase $53 billion by 2026.

    Here’s more from Just Care: