CLAIM: Health Care Reform Won't Reduce The Deficit

CLAIM: Health Care Reform Will Cause “Jobs ...To Be Lost”

CLAIM: Health Care Bill “Manipulating Budget Window” By “Creating 10 Years Of Revenue Against Six Years Of Expenses”

CLAIM: Incentives For Wellness And Prevention “Was Missing From The Health Care Bill”

CLAIM: Reform Is A “Government Takeover” Of The Health Care Industry

CLAIM: Health Care Reform Won't Reduce The Deficit

Krauthammer: If Dems Say “This Is Going To Reduce The Deficit,” They're “Talking Out Of [Their] Hat.” On the January 18 edition of Fox News' The O'Reilly Factor, Fox News contributor Charles Krauthammer claimed:

KRAUTHAMMER: People are not stupid. If people say we're passing a bill that is going to expand coverage to 33 million Americans who haven't had it, and this is going to reduce the deficit, they know you're talking out of your hat. Or that you've jiggled the numbers in such a way as to make it look like that.

The argument against this deficit reduction is so clear, it's so obvious, so easy to make; if Republicans can't make it, they don't deserve to be the opposition. [Fox News' The O'Reilly Factor, 1/18/11]

Johnson: “A Lot Of People Are Saying ... 'I Believe The Deficit Will Go Up.' ” As part of his list of objections to the bill that “a lot of people are saying,” Fox News legal analyst Peter Johnson Jr. included, “I believe the deficit will go up.” [Fox News' Fox & Friends, 1/19/11]

FACT: CBO Estimated That Health Reform Bills Would Reduce Deficits Over Next 10 Years And Beyond

CBO, JCT Found Health Care Reform Legislation Would Reduce The Deficit By $143 Billion Through 2019. From a March 20, 2010, CBO cost estimate of the Senate health reform bill and the health care and education reconciliation bill:

CBO and JCT [Joint Committee on Taxation] estimate that enacting both pieces of legislation--H.R. 3590 and the reconciliation proposal--would produce a net reduction in federal deficits of $143 billion over the 2010-2019 period as result of changes in direct spending and revenues (see Table 1). That figure comprises $124 billion in net reductions deriving from the health care and revenue provisions and $19 billion in net reductions deriving from the education provisions. [Congressional Budget Office, 3/20/10]

Estimate Also Found Reform Legislation Would Continue To Reduce Deficit In Second Decade. CBO further stated:

Reflecting the changes made by the reconciliation proposal, the combined effect of enacting H.R. 3590 and the reconciliation proposal would also be to reduce federal budget deficits over the ensuing decade relative to those projected under current law--with a total effect during that decade in a broad range around one-half percent of GDP. [Congressional Budget Office, 3/20/10]

CLAIM: Health Care Reform Will Cause “Jobs ...To Be Lost”

Johnson: “A Lot Of People Are Saying ... 'I Believe The Jobs Are Going To Be Lost.' ” On Fox & Friends, Johnson claimed, “A lot of people are saying ... I believe jobs are going to be lost.” [Fox & Friends, 1/19/11]

FACT: Health Care Reform Will Kill Jobs Is A “Myth ... Deliberately Confusing The Public”

AP Calls GOP Job Loss Estimate “Shaky,” Claims Statistics “Used And Abused.” In a January 18 article, The Associated Press wrote that “the widely cited estimate” of job losses “by House GOP leaders is shaky.” The article further noted that the report “cites the 650,000 lost jobs as Exhibit A, and the nonpartisan Congressional Budget Office as the source of the original analysis behind that estimate. But the budget office, which referees the costs and consequences of legislation, never produced the number.” The article continued:

What CBO actually said is that the impact of the health care law on supply and demand for labor would be small. Most of it would come from people who no longer have to work, or can downshift to less demanding employment, because insurance will be available outside the job.

“The legislation, on net, will reduce the amount of labor used in the economy by a small amount -roughly half a percent- primarily by reducing the amount of labor that workers choose to supply,” budget office number crunchers said in a report from last year.

That's not how it got translated in the new report from Speaker John Boehner, R-Ohio, and other top Republicans.

[...]

The Republican translation doesn't track, said economist Paul Fronstin of the nonpartisan Employee Benefit Research Institute.

“CBO isn't saying that there is job loss as much as they are saying that fewer people will be working,” explained Fronstin. “There is a difference. People voluntarily working less isn't the same as employers cutting jobs.”

For example, the budget office said some people might decide to retire earlier because it would be easier to get health care, instead of waiting until they become eligible for Medicare at age 65.

The law “reduces the amount of labor supplied, but it's not reducing the ability of people to find jobs, which is what the job-killing slogan is intended to convey,” said economist Paul Van de Water of the Center on Budget and Policy Priorities. The center advocates for low-income people, and supports the health care law. [The Associated Press, 1/18/11]

Economist Van de Water: Claim That Reform Kills Jobs Is “Perpetuating Myths And Deliberately Confusing The Public.” In a January 18 interview with Paul Van de Water, senior fellow at the Center on Budget and Policy Priorities, Van de Water called the claim that health care reform will cause the economy to lose jobs “perpetuating myths and deliberately confusing the public.” From the interview:

House Republican leaders say that the Affordable Care Act will destroy jobs by making it more expensive for employers to provide insurance for their employees. Is there any truth to this?

No, it's completely wrong. CBO also looked at this issue and they found that health reform is unlikely to raise most businesses' health insurance premiums -- in fact for most firms, premiums are likely to go down.

What CBO did say is that some people who are currently working primarily because they need their health insurance might choose to retire early or work a little less.

But that has nothing to do with firms hiring fewer people. Opponents of reform who claim that will happen are not only wrong but are misleading the public.

Paul, what's the bottom line?

Two key points. First, in attacking the CBO estimate of health reform's costs and making false claims about the law's impact on jobs, opponents of reform are perpetuating myths and deliberately confusing the public. Health reform will reduce the deficit and will not kill jobs.

Second, at a time when the nation faces serious long-term fiscal challenges, it's extremely troubling to see Congressional leaders rejecting CBO analyses they find politically inconvenient and promoting their own partisan estimates. [Center on Budget and Policy Priorities, 1/18/11]

CLAIM: Health Care Bill “Manipulating Budget Window” By “Creating 10 Years Of Revenue Against Six Years Of Expenses”

Carlson Calls GOP Lawmaker's Claim That The Bill “Creates 10 Years Of Revenue Against Six Years Of Expenses” A “Great” Argument. On Fox & Friends, co-host Gretchen Carlson allowed Rep. John Fleming (R-LA) to cast doubt on the reform bill's deficit reduction by claiming that Democrats “do something really strange” in calculating the deficit reduction qualities of the bill by “manipulating the budget window by creating 10 years of revenue against six years of expenses.” Carlson said in response, “You're doing a great job proving your point.” [Fox & Friends, 1/19/11]

FACT: CBO Found That Health Care Reform Would Continue To Reduce The Deficit Beyond 2019

Krugman: Claim That The Bill “Front-Loads Revenues And Back-Loads Spending” Is A “Lie.” In a March 27, 2010, New York Times blog post, Paul Krugman responded to former CBO director Douglas Holtz-Eakin's claim that health care reform legislation is filled with “gimmicks” designed to make the legislation appear to reduce the deficit. Krugman wrote:

OK, I finally got around to reading Douglas Holtz-Eakin's op-ed on health care reform. It's much worse than I thought; time to scratch Holtz-Eakin off my shrinking list of reasonable, reasonably honest conservatives.

How bad is it? Holtz-Eakin declares that

Gimmick No. 1 is the way the bill front-loads revenues and backloads spending. That is, the taxes and fees it calls for are set to begin immediately, but its new subsidies would be deferred so that the first 10 years of revenue would be used to pay for only 6 years of spending.

I think that's what is technically known as a “lie”. Holtz-Eakin, of all people, knows how to read a CBO report. So he's perfectly capable of looking at the actual report (pdf) and seeing that the revenues, like the costs, are minimal for the first four years. Here's the chart:

[...]

His implication that there's funny business going on is totally false, and he knows it.

Wait, it gets worse: Holtz-Eakin implies that there are hidden, delayed costs:

Consider, too, the fate of the $70 billion in premiums expected to be raised in the first 10 years for the legislation's new long-term health care insurance program. This money is counted as deficit reduction, but the benefits it is intended to finance are assumed not to materialize in the first 10 years, so they appear nowhere in the cost of the legislation.

Claims that the plan is window-dressed to look good in its first decade only to go sour later might sound plausible -- except for the fact that the CBO projects bigger deficit-reduction in the second decade of the reform than in the first decade, something that wouldn't happen if lots of costs were being hidden by being pushed off into the future.

That said, we do learn something important from Holtz-Eakin's article. If this is the best critique a conservative budget wonk can come up with -- if deliberately misrepresenting how the legislation works is the only way to make it seem irresponsible -- then the bill must be pretty sound in fiscal terms. [The New York Times, 3/27/10]

CBO Director Tells Deficit Commission That Health Care Reform Slightly Improves Budget Outlook. As The Washington Post noted on July 1, 2010, CBO director Doug Elmendorf said during a June 30 presentation that the health care reform bill “did not substantially diminish” the long-term deficit problem, but that it “made a dent”:

“Growth in spending on health-care programs remains the central fiscal challenge,” CBO Director Douglas W. Elmendorf said in a presentation to Obama's bipartisan deficit commission. “In CBO's judgment, the health-care legislation enacted earlier this year made a dent in the problem, but did not substantially diminish that challenge.”

Although more starkly stated, CBO's position has not changed since the health-care legislation was approved. The new forecast simply incorporates CBO's cost estimates from that time, which predicted that the plan to expand coverage, raise taxes and cut Medicare spending would reduce deficits by about $140 billion over the next decade and by more than $1 trillion in the decade after.

“Slowing the rate of health care cost growth is the single most important action we can take to reduce our long-term fiscal shortfall,” White House budget director Peter Orszag said in a statement. “The report confirms that the enactment and successful implementation of the Affordable Care Act is a key step toward a healthier fiscal future.” [The Washington Post, 7/1/10]

CBO Budget Outlook Says Health Care Reform Law Will “Reduce Budget Deficits Over The 2010-2019 Period And In Subsequent Years.” CBO's June 30, 2010, long-term budget outlook states that the health care reform law “is expected to increase federal spending in the next 10 years and for most of the following decade. By 2030, however, that legislation will slightly reduce federal spending for health care if all of its provisions are fully implemented, CBO projects.” CBO noted in a footnote that although the law -- which will reduce the number of uninsured by 32 million by 2019 -- will increase federal spending on health care in the next two decades, it will still reduce budget deficits:

If all of its provisions are carried out, the legislation will also increase federal revenues and reduce budget deficits over the 2010-2019 period and in subsequent years, according to estimates by CBO and the staff of the Joint Committee on Taxation. [Congressional Budget Office, 6/30/10]

CBO: In Long-Term, Health Care Reform “Slow[s] The Accumulation Of Debt Considerably.” While cautioning that long-term estimates of health care spending are uncertain, the CBO budget outlook stated that if the health care reform bill is implemented as written, it “increase[s] projected revenues, particularly in the 2030s and beyond, thus slowing the accumulation of debt considerably.” [Congressional Budget Office, 6/30/10]

CLAIM: Incentives For Wellness And Prevention “Was Missing From The Health Care Bill”

Carlson: Incentives For Prevention And Wellness “Seems To Be One Thing That Was Missing From The Health Care Bill On Capitol Hill.” On the January 19 edition of Fox & Friends, Carlson interviewed a Michigan city administrator about a local program that incentivizes “screening and risk assessment.” Carlson reacted to the plan by claiming “the one thing that struck my mind as you're talking there is that the one word is 'incentive.' You incentivize these people with a $100 gift card to come and get checked out, and that seems to be one thing that was missing from the health care bill on Capitol Hill.” [Fox & Friends, 1/19/11]

FACT: Health Care Reform Bill Provides Numerous Incentives For Prevention And Wellness

Patient Protection and Affordable Care Act, Section 4108, Provides “Incentives For Prevention Of Chronic Disease In Medicaid.” Section 4108 of the Patient Protection and Affordable Care Act (PPAC) creates “incentives for prevention of chronic diseases in Medicaid.” From the PPAC:

SEC. 4108. INCENTIVES FOR PREVENTION OF CHRONIC DISEASES IN MEDICAID.

(a) INITIATIVES.--

(1) ESTABLISHMENT.--

(A) IN GENERAL.--The Secretary shall award grants to States to carry out initiatives to provide incentives to Medicaid beneficiaries who--

(i) successfully participate in a program described in paragraph (3); and

(ii) upon completion of such participation, demonstrate changes in health risk and outcomes, including the adoption and maintenance of healthy behaviors by meeting specific targets (as described in subsection (c)(2)).

(B) PURPOSE.--The purpose of the initiatives under this section is to test approaches that may encourage behavior modification and determine scalable solutions. [Patient Protection And Affordable Care Act of 2010, accessed 1/19/11]

Bill Provides “Grants For Small Businesses To Provide Comprehensive Workplace Wellness Programs.” Section 10408 of the PPAC provides “grants for small businesses to provide comprehensive workplace wellness programs.” From the PPAC:

SEC. 10408. GRANTS FOR SMALL BUSINESSES TO PROVIDE COMPREHENSIVE WORKPLACE WELLNESS PROGRAMS.

(a) ESTABLISHMENT.--The Secretary shall award grants to eligible employers to provide their employees with access to comprehensive workplace wellness programs (as described under subsection (c)).

[...]

(e) AUTHORIZATION OF APPROPRIATION.--For purposes of carrying out the grant program under this section, there is authorized to be appropriated $200,000,000 for the period of fiscal years 2011 through 2015. [Patient Protection And Affordable Care Act of 2010, accessed 1/19/11]

Bill Provides Grants To “Provide Physical Activity Opportunities” In Order To Reduce Chronic Disease. Section 4201 of the PPAC Creates “Community Transformation Grants” which may be used toward activities such as “creating healthier school environments, including increasing healthy food options, physical activity opportunities, promotion of healthy lifestyle, emotional wellness, and prevention curricula, and activities to prevent chronic diseases.” From the bill:

SEC. 4201. COMMUNITY TRANSFORMATION GRANTS.

(a) IN GENERAL.-The Secretary of Health and Human Services (referred to in this section as the ''Secretary''), acting through the Director of the Centers for Disease Control and Prevention (referred to in this section as the ''Director''), shall award competitive grants to State and local governmental agencies and community-based organizations for the implementation, evaluation, and dissemination of evidence-based community preventive health activities in order to reduce chronic disease rates, prevent the development of secondary conditions, address health disparities, and develop a stronger evidence-base of effective prevention programming.

[...]

(B) ACTIVITIES.-Activities within the plan may focus on (but not be limited to)-

(i) creating healthier school environments, including increasing healthy food options, physical activity opportunities, promotion of healthy lifestyle, emotional wellness, and prevention curricula, and activities to prevent chronic diseases;

(ii) creating the infrastructure to support active living and access to nutritious foods in a safe environment;

(iii) developing and promoting programs targeting a variety of age levels to increase access to nutrition, physical activity and smoking cessation, improve social and emotional wellness, enhance safety in a community, or address any other chronic disease priority area identified by the grantee;

(iv) assessing and implementing worksite wellness programming and incentives;

(v) working to highlight healthy options at restaurants and other food venues;

(vi) prioritizing strategies to reduce racial and ethnic disparities, including social, economic, and geographic determinants of health; and

(vii) addressing special populations needs, including all age groups and individuals with disabilities, and individuals in both urban and rural areas. [Patient Protection And Affordable Care Act of 2010, accessed 1/19/11]

Bill Increases Amount Of Premium Discount Available To Individuals Participating In Wellness Programs. As part of Section 2705 of the PPAC, the bill rewards participating in a wellness program up to “30 percent of the cost of employee-only coverage under the plan.” The provision also allows the secretary of Health and Human Services to raise the reward “up to 50 percent of the cost of coverage if the Secretaries determine that such an increase is appropriate.” [Patient Protection And Affordable Care Act of 2010, accessed 1/19/11]

CLAIM: Reform Is A “Government Takeover” Of The Health Care Industry

Krauthammer: Health Care Reform Bill Is “Essentially A Federal Government Takeover Of A Sixth Of The U.S. Economy.” On the January 18 broadcast of The O'Reilly Factor, Krauthammer stated that health care reform is “essentially a federal government takeover of a sixth of the U.S. economy. That's a high price to pay for a couple of goodies which you can get without any of that.” [The O'Reilly Factor, 1/18/11]

FACT: “Government-Run Health Care” Is “Among The Biggest Falsehoods” Of The Health Care Debate

PolitiFact: “Government Takeover Of Health Care” Is The “Lie Of The Year.” In its article declaring “a government takeover of health care” the Lie of the Year, PolitiFact wrote:

“Government takeover” conjures a European approach where the government owns the hospitals and the doctors are public employees. But the law Congress passed, parts of which have already gone into effect, relies largely on the free market:

• Employers will continue to provide health insurance to the majority of Americans through private insurance companies.

• Contrary to the claim, more people will get private health coverage. The law sets up “exchanges” where private insurers will compete to provide coverage to people who don't have it.

• The government will not seize control of hospitals or nationalize doctors.

• The law does not include the public option, a government-run insurance plan that would have competed with private insurers.

• The law gives tax credits to people who have difficulty affording insurance, so they can buy their coverage from private providers on the exchange. But here too, the approach relies on a free market with regulations, not socialized medicine.

PolitiFact reporters have studied the 906-page bill and interviewed independent health care experts. We have concluded it is inaccurate to call the plan a government takeover because it relies largely on the existing system of health coverage provided by employers.

It's true that the law does significantly increase government regulation of health insurers. But it is, at its heart, a system that relies on private companies and the free market.

Republicans who maintain the Democratic plan is a government takeover say that characterization is justified because the plan increases federal regulation and will require Americans to buy health insurance.

But while those provisions are real, the majority of Americans will continue to get coverage from private insurers. And it will bring new business for the insurance industry: People who don“t currently have coverage will get it, for the most part, from private insurance companies. [PolitiFact, 12/16/10]

FactCheck: Claim Of “Government-Run Health Care” Among The “Biggest Falsehoods” Of Health Care Debate. On March 19, 2010, FactCheck.org included “It's government-run health care” among the “biggest falsehoods” of the health care debate, writing:

Despite the fact that the federal health insurance plan (a.k.a. the “public option”) is now gone from the bill, Republicans and conservative groups have continued to claim that the bill institutes a system like the one in the United Kingdom, or Canada, or otherwise amounts to a government takeover. It doesn't. A pure government-run system was never among the leading Democratic proposals, much to the chagrin of single-payer advocates. Instead, the bill builds on our current system of private insurance, and in fact, drums up more business for private companies by mandating that individuals buy coverage and giving many subsidies to do so. There would be increased government regulation of the insurance industry, however, to require companies to cover preexisting conditions, for example. [FactCheck.org, 3/19/10]