Analysis of the Proposed Health Care Legislation Finds Financial Aspects May be Difficult to Forecast

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Eric Gurr, president and CEO of U4prez.com has done a summary analysis of the health care plan currently under consideration in Congress. After pouring through the entire document, he finds that while many of the objections to the plan are simply not true (There is no coverage for illegal aliens, and the parental education is largely voluntary, and driven at the state level not the federal level) there is still serious concern on the financial side.

Eric Gurr, president and CEO of U4prez.com has done a summary analysis of the health care plan currently under consideration in Congress. After pouring through the entire document, he finds that while many of the objections to the plan are simply not true (There is no coverage for illegal aliens, and the parental education is largely voluntary, and driven at the state level not the federal level) there is still serious concern on the financial side.

Gurr's analysis is presented from a business perspective, as opposed to government, and he finds a few glaring omissions in a plan as complex as HR 3200. The analysis offers a more holistic approach (addressing the plan in its entirety as opposed to small components which may be amended).

The most obvious of the omissions are of course a fall-back position should costs far exceed estimates and a pilot program for the entire plan. Gurr makes the case that Congress, The White House, and the CBO would all find it impossible to accurately forecast a realistic price tag without a comprehensive test. Short of more accurate financial data, a fall-back option based on specific spending bench-marks would seem to be an absolute requirement.

Gurr cites several examples from the bill which clearly indicate that not enough time has been devoted to behavioral changes which will affect cost. An excerpt is provided below.

SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES.

(1) IN GENERAL- The Secretary shall establish payment rates for the public health insurance option for services and health care providers consistent with this section and may change such payment rates in accordance with section 224.

"As you can clearly see from this small sampling, no one has any idea how much all of this is going to cost. This is addressed by giving the secretary almost unlimited power to set prices. Of course this is one of the biggest mistakes politicians make when coming up with a big spending plan. It's easy to set a price, but much more difficult to control the cost.

Having established that the cost of the care is completely unknown, we now turn to an even bigger problem; the financing of this plan has very little flexibility, and there is no accounting for the change in behavior which will take place after implementation."

The analysis also points out that the penalties and fees on businesses that do not offer insurance, may not be enough to cover the cost of employees who lose coverage, thus creating a spiral effect of ever increasing costs. Furthering the spiral an increase of these fees will put further strain on the manufacturing segment, forcing some to close the doors and aggravating the problem by lowering the tax base.

The entire brief can be viewed here; Brief summary analysis of health care reform bill.

Contact:
Eric Gurr
U4prez.com

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