Baucus, The New BS?

The shenanigans used to create the illusion of a fiscally sound health care bill are coming unraveled. No wonder Democrats want to pass this before anybody gets a chance to read it.

[A]nalysts point out that much of the program — and the spending associated with it — does not really begin until the 2013. A 10-year cost beginning that year would be significantly higher, argue analysts, and would be closer to $1.3 trillion.

Critics say the bill masks other big costs, such as the adjustments to Medicare payments for doctors that Congress routinely
makes.

The bill makes the assumption that Congress will suddenly begin allowing scheduled payment cuts, even though lawmakers have always blocked those cuts from happening, in part because many believe doctors are already underpaid by Medicare.

“That means Baucus will come up at least $200 billion short on the revenue side, making his bill a budget buster,” said Michael Cannon, director of health policy studies at the Cato Institute, a libertarian think tank.

Update here.

The CBO estimates that the bill will reduce the deficit by $81 billion over the next decade, and even more beyond that. But that's assuming Congress will make good on its threat to cut Medicare by hundreds of billions of dollars.

Even the CBO does not believe that.

A careful reading of the evidence suggests that the Baucus bill will add as much as $376 billion to the federal deficit through 2019. And that figure understates the full impact of the bill on the budget. If the big-spending parts of the proposal started next year rather than in 2014, the fiscal damage would be much greater.

At face value, the Baucus bill seems to be close to what the president ordered. According to the CBO, the bill gives coverage to 29 million uninsured Americans for less than $900 billion while simultaneously reducing the deficit. The problem is that the bill counts as savings large cuts to Medicare providers that will almost certainly never happen.

The most blatant example is the annual cut in fees paid by Medicare to physicians. The cuts started out small, about 5% a year, but even that was unsustainable. To "solve" the political problem without having to admit to a big increase in the deficit, Congress has given doctors a series of one-year fixes. The foregone payment reductions add up, and next year Medicare is supposed to slash doctor's fees 21%.

Clearly, that will not happen.