See below for a fact check on comments on the Senate bill’s Medicaid burden placed on states and increase in premiums, taxes and overall spending made just now in a press conference held by Senate Minority Leader Mitch McConnell:


SRHETORIC: McConnell Claimed Medicaid Costs Would Impose Massive Burdens on States: McConnell said, “Medicaid. This is particularly interesting. The bill imposes massive burdens on states that are already struggling under the weight of the cost of Medicaid.” [McConnell Press Conference, 12/19/09]

REALITY: HEALTH INSURANCE REFORM WOULD COVER LARGE PORTION OF MEDICAID EXPENDITURES FOR STATES

Senate Bill Includes Provision To Help States Affected By Disasters To Cover Half Of Increased Medicaid Spending. Politico Live Pulse reported that, “it’s no surprise that the health bill includes a 50 percent boost in federal Medicaid money for states that have been declared disaster areas in the past seven years. Hurricane Katrina, of course, hit the Pelican State in 2005. You can find the provision on page 432 of the bill…Turns out, the provision is a bit more nuanced than I first reported. Essentially, it provides federal money to help the state shoulder its share of increased Medicaid spending. For instance, if Louisiana’s share of Medicaid spending is increased by more than 3 percent, the federal government would pick up half of that tab in the first year. Bottom line, CBO estimates the provision would cost the federal government about $100 million.” [Politico Live Pulse, 11/18/09]

CBO On Senate Bill: Federal Government Would Cover On Average 90% Of Additional Medicaid Costs, Up From 57% Currently; Federal Money Would Cover Higher Proportion Of CHIP Costs, Increasing From An Average Of 70 Percent To 93 Percent. The CBO concluded that the Senate reform legislation affected Medicaid in the following way: “Starting in 2014, most nonelderly people with income below 133 percent of the FPL would be made eligible for Medicaid. The federal government would pay all of the costs of covering newly eligible enrollees through 2016; in subsequent years, the share of federal spending would vary somewhat from year to year but ultimately would average about 90 percent. (Under current rules, the federal government usually pays about 57 percent, on average, of the costs of Medicaid benefits.)…Beginning in 2014, states would receive higher federal reimbursement for CHIP beneficiaries, increasing from an average of 70 percent to 93 percent. CBO estimates that state spending on Medicaid would increase by about $25 billion.” [Congressional Budget Office, 11/18/09]

CBO: Federal Government Would Pay All of the Costs of Covering Newly Eligible Enrollees Through 2016, After That the Federal Government Would Pay an Average of 90 Percent for New Medicaid Enrollees. “The federal government would pay all of the costs of covering newly eligible enrollees through 2016; in subsequent years, the share of federal spending would vary somewhat from year to year but ultimately would average about 90 percent. (Under current rules, the federal government usually pays about 57 percent, on average, of the costs of Medicaid benefits.)” [Congressional Budget Office Letter to Senator Reid, 11/18/09]

CBO: Starting in 2014, States Would Receive Higher Reimbursement for CHIP Beneficiaries Increasing from 70 Percent to 93 Percent. Beginning in 2014, states would receive higher federal reimbursement for CHIP beneficiaries, increasing from an average of 70 percent to 93 percent.” [Congressional Budget Office Letter to Senator Reid, 11/18/09]

“Senate Staff Members Say The Governors Are Being Heard, And That Measures To Cut Other Health Care Costs In The Legislation Will Eventually Alleviate Their Concerns” On Added Medicaid Burden. The New York Times reported on nervousness from state governors based on concerns that some of the costs of Medicaid expansion would be shouldered by beleaguered states: “Senate staff members say the governors are being heard, and that measures to cut other health care costs in the legislation will eventually alleviate their concerns.” [New York Times, 8/7/09]

  • Barbour Said He Was “Encouraged” By The Senate Finance’s Health Care Bill That Would Increased Medicaid Funding For States. “States may receive more money from the U.S. government for the Medicaid program for the poor under the Senate Finance Committee chairman’s healthcare reform proposal released on [September 16, 2009]. The $856 billion legislation, which may form the basis of compromise in the U.S. Congress on giving all Americans health coverage, would ‘increase federal Medicaid funding for states that cover recommended preventive services and immunizations at no extra cost,’ according to a summary from Senator Max Baucus, a Democrat from Montana …While a key Republican governor, Haley Barbour of Mississippi, was encouraged by the call, he said he was still worried about other provisions in the committee’s proposal. ‘It is clear the Senators are trying to reduce or eliminate the unfunded mandate, and I appreciate their effort,’ said Barbour, who chairs the Republican Governors Association, in a statement. ‘Nevertheless, Mississippi’s small businesses and our Medicare beneficiaries have too much at risk.’” [Reuters, ]

REALITY: COST OF FAILURE IS JUST TOO GREAT FOR STATES

Study: If Reform Fails, “All States Would See Their Medicaid/CHIP Costs Rise By More Than 75 Percent From 2009 To 2019. Half The States Would Face Cost Increases Of More Than 100 Percent.” The Robert-Wood Johnson Foundation and the Urban Institute completed a study on the potential costs to states if health reform failed. The main findings for health care spending were: “In the worst case, all states would see their Medicaid/CHIP costs rise by more than 75 percent from 2009 to 2019. Half the states would face cost increases of more than 100 percent. Even in the best case, 13 states would experience Medicaid/CHIP cost growth of more than 65 percent. In the worst case, uncompensated care costs would more than double from 2009 to 2019 in 45 states. Even in the best case, uncompensated care would increase by more than 50 percent in 48 states.” [RWJF: The Cost Of Failure, 9/28/09]

RHETORIC: McConnell Claimed Health Reform Bill Would Increase Premiums, Taxes and Overall Spending: McConnell said, “The history that’s being made is that a bill that was sold as helping a major problem in our nation actually makes a problem worse, because independent, non-partisan scorekeepers tell us that premiums, taxes and overall health care spending will actually go up under this bill.” [McConnell Press Conference, 12/19/09]

REALITY: PREMIUMS WILL DECREASE UNDER REFORM

Study: “House And Senate Bills Would …Lower Premiums By Nearly $2,000 Per Family.” The Commonwealth Fund released a report titled, “Why Health Reform Will Bend The Cost Curve.” It wrote: “The health reform bills passed by the U.S. House of Representatives and under consideration in the Senate introduce a range of payment and delivery system changes designed to achieve a significant slowing of health care cost growth. Most assessments of health reform legislation have focused only on the federal budgetary impact. This study projects the effect of national reform on total national health expenditures and the insurance premiums that American families would likely pay. We estimate that the combination of provisions in the House and Senate bills would save $683 billion or more in national health spending over the 10-year period 2010–2019 and lower premiums by nearly $2,000 per family. Moreover, the annual growth rate in national health expenditures could be slowed from 6.4 percent to 6.0 percent.” [Commonwealth Fund, 12/7/09]

CMS Report: Senate Health Care Bill Saves Seniors Nearly $700 Per Couple Per Year While Reducing Premiums More Than $300 Per Year And Out Of Pocket Costs By Another $370 Per Year. According to a recently released CMS report, the Patient Protection and Affordable Care act saves seniors nearly $700 per couple per year, reducing premiums by more than $300 per year and out of pocket costs by another $370 per year in 2019.  [CMS Actuary analysis, 12/10/09]

NYT: “Nonpartisan Congressional Budget Office Persuasively Contradicted” Insurance Industry Claim That Reform Legislation Would Drive Up Insurance Premiums; “Tens Of Millions Of Uninsured Americans Can Be Covered Without Driving Up Costs For Everyone Else.” The New York Times editorial board wrote: “The health insurance industry frightened Americans — and gave Republicans a shrill talking point — when it declared in October that proposed reform legislation would drive up insurance costs for virtually everyone by as much as thousands of dollars a year. The nonpartisan Congressional Budget Office persuasively contradicted that claim this week. Undaunted, the industry issued a rebuttal report, claiming again that premiums would soar. We find this second industry report no more persuasive than the first…And we have far more confidence in the C.B.O.’s expertise in evaluating a wide array of databases and in its objectivity. The chief message Americans should derive from the C.B.O.’s analysis is that tens of millions of uninsured Americans can be covered without driving up costs for everyone else.” [New York Times Editorial, 12/4/09]

Bloomberg News: 134 Million Americans Insured Through Large Employers Will See No Rise In Premiums And May Pay 3 Percent Less…Subsidies Also Will Lower Costs As Much As 59 Percent For 18 Million People Buying Their Own Insurance.” Bloomberg News reported on CBO estimates of the Senate health insurance reform bill’s impact on insurance premiums: “On average, 134 million Americans insured through large employers will see no rise in premiums and may pay 3 percent less than they would if Congress failed to pass a health-care overhaul plan, the nonpartisan Congressional Budget Office said yesterday. Subsidies also will lower costs as much as 59 percent for 18 million people buying their own insurance.” [Bloomberg, 12/1/09]

WP: In “First Objective Analysis Of The Effect On Premiums,” CBO Found That Senate Bill “Would Leave Premiums Unchanged Or Slightly Lower For The Vast Majority Of Americans,” Contradicting Insurance Industry Claims. The Washington Post reported that, “[a]s the Senate opened debate Monday on a landmark plan to overhaul the nation’s health-care system, congressional budget analysts said the measure would leave premiums unchanged or slightly lower for the vast majority of Americans, contradicting assertions by the insurance industry that the average family’s coverage would rise by thousands of dollars if the proposal became law… Monday’s CBO report offers the first objective analysis of the effect on premiums. An earlier study commissioned by America’s Health Insurance Plans, an industry trade group, warned that the Senate bill would dramatically increase insurance premiums, but the study’s authors at PricewaterhouseCoopers later acknowledged that they had ignored major pieces of the legislation in their calculations.” [Washington Post, 12/1/09]

NYT: CBO Estimate Showed That Senate Bill “Could Significantly Reduce Costs For Many People Who Buy Health Insurance On Their Own, And That It Would Not Substantially Change Premiums For The Vast Numbers Of Americans Who Receive Coverage From Large Employers.” The New York Times reported that, “[t]he Congressional Budget Office said Monday that the Senate health bill could significantly reduce costs for many people who buy health insurance on their own, and that it would not substantially change premiums for the vast numbers of Americans who receive coverage from large employers…Before taking account of federal subsidies to help people buy insurance on their own, the budget office said the bill would tend to drive up premiums. But as a result of the subsidies, it said, most people in the individual insurance market would see their costs decline, compared with the costs expected under current law. The subsidies, a main feature of the bill, would cost the government nearly $450 billion in the next 10 years and would cover nearly two-thirds of premiums for people who receive them.” [New York Times, 12/1/09]

REALITY: REFORM WILL PROVIDE TAX CUTS

JCT: Senate Bill Will Provide Nearly $450 Billion In Individual Income Tax Cuts. Jason Furman wrote on the White House Blog: “First, the health insurance reform bill being considered in the Senate does not raise taxes on families making less than $250,000 – in fact it is a substantial net tax cut for American families. The bill being considered represents a substantial net tax cut for middle income families. According to the independent Joint Committee on Taxation, the bill will provide nearly $450 billion in individual income tax cuts over the next 10 years.” [White House, 12/16/09]

IRS $5 – 10 Billion Expansion Would Be To Determine Who Gets A Credit To Buy Insurance. Costs to the Internal Revenue Service of implementing the eligibility determination, documentation, and verification processes for premium and cost sharing credits. Those costs would probably be between $5 billion and $10 billion over 10 years.” [CBO Estimate, 11/18/09]

Based On CBO Estimates, Under Senate Bill, Individuals Would Save From $200 To $2,500; Families Would Save $500 To $7,500 – “In Addition To The More Generous Benefits That These Groups Will Receive Through The [Health Insurance] Exchange.” Jonathan Gruber, MIT professor of economics and a health economics specialist wrote on the updated CBO estimates of the Senate health reform legislation: “I find that the savings are large for both singles and families, and that they are particularly large for the lowest income families that qualify for premium credits under the Senate Bill but would be left to face the full high non-group premium without legislation. In particular, I find that the single individual would save over $2,500 at low incomes (175% of poverty), and would save $200 even at higher incomes (425% of poverty or higher). For families, the savings are much larger, ranging from nearly $7,500 for low income families (at 175% of poverty) to $500 for higher incomes (425% of poverty of higher). It is worth noting that these savings are all in addition to the more generous benefits that these groups will receive through the exchange compared to the non-group market.” [Gruber, 11/27/09]

CBO On Senate Bill: $27 Billion For Small Business Tax Credit. In its estimate of the Senate reform bill, CBO wrote: “The other main element of the coverage provisions that would increase federal deficits is the tax credit for small employers who offer health insurance, which is estimated to reduce revenues by $27 billion over 10 years.” [Congressional Budget Office, 11/18/09]

CBO: $338 Billion In “Premium And Cost Sharing Subsidies” For People Purchasing Insurance Through Exchanges. [CBO Estimate, 11/18/09]

REALITY: REFORM WILL BEND THE COST CURVE AND LOWER OVERALL HEALTH SPENDING

CEA Report: Reform Will Bend Cost Curve, And Noted More Benefits: GDP Will Be 4 Percent Higher, Median Family Income $6,800 Higher, Deficit Reduction By 2 Percent, 320,000 More Jobs All By 2030. The Council of Economic Advisers released a report on the potential impact of health insurance reform on bending the cost curve, and it noted “[a] few of the many benefits of reducing the growth rate of health care costs by an average of 1.0 percentage point per year.” The list included: “GDP that is 4 percent higher by 2030…Median family income that is $6,800 higher by 2030…Federal budget deficit lowered by as much as 2 percent of GDP by 2030…An unemployment rate that is 0.16 percentage point lower and approximately 320,000 additional jobs.” [CEA Report, 12/14/09]

CMS Report: Senate Health Care Bill Will Have “A Significant Downward Impact On Future Health Care Cost Growth Rates.” According to a recently released CMS report, the Patient Protection and Affordable Care Act will have “a significant downward impact on future health care cost growth rates.”  [CMS Report, 12/10/09]

MIT Health Economist: “I’m Sort Of A Known Skeptic On This Stuff… [But The Senate Bill] Really Make[s] The Best Effort Anyone Has Ever Made [To Bend The Cost Curve]…I Can’t Think Of Anything I’d Do That They Are Not Doing In The Bill. You Couldn’t Have Done Better.” In an interview with The Atlantic, Jonathan Gruber, noted health economist and professor of economics at MIT, said: “‘I’m sort of a known skeptic on this stuff,’ Gruber told me. ‘My summary is it’s really hard to figure out how to bend the cost curve, but I can’t think of a thing to try that they didn’t try. They really make the best effort anyone has ever made. Everything is in here….I can’t think of anything I’d do that they are not doing in the bill. You couldn’t have done better than they are doing.’” [The Atlantic, 11/21/09]

MIT Health Economist: House Health Legislation “Does Real Things On Cost Control, And Then It Does Real Things To Make Cost Control More Politically Viable. It Lays The Groundwork For Doing More.” The Washington Post’s Ezra Klein interviewed MIT health economist Jonathan Gruber: “KLEIN: One of my frustrations with the cost-control discussion is that people set this up like a choice between this bill and a bill with more cost control. In reality, it seems more like a choice between this bill and nothing. And this bill does a lot more cost control than nothing. GRUBER: Here’s how I think about this: Do you know Pascal’s wager? Why not believe in God? I think of health-care reform similarly. We don’t know if we’ll really bend the cost curve. But if we do this and we don’t do anything, we still go bankrupt in 100 years. We don’t lose much. But if we do it and it works, then it’s a savior. It also moves the conversation on cost control in a way that’s impossible without this bill. It does real things on cost control, and then it does real things to make cost control more politically viable. It lays the groundwork for doing more. To kill this bill for not doing enough on cost control would be like criticizing the Yankees for not winning the Super Bowl. They won the World Series! They did what they could do!” [Washington Post – Ezra Klein, 11/12/09]

23 Of Nation’s Most Well-Respected Health Economists: “We Believe That It Is Important To Enact Health Reform…[It] Will Lower Health Care Costs And Help Reduce Deficits Over The Long Term.” In a letter to the President, 23 of the nation’s most well-respected health economists said: “As economists, we believe that it is important to enact health reform, and it is essential that health reform include these four features [deficit neutrality, excise tax on high-cost insurance plans, independent Medicare commission, delivery system reforms] that will lower health care costs and help reduce deficits over the long term.” [Letter from 23 economists, 11/17/09]