Health care politics run into economic reality.

[Soul Crusher]

Health care politics run into economic reality

 Susan Walsh / AP

President Barack Obama is reflected in a mirror at a news conference in the East Room of the White House on Friday.
 By CALVIN WOODWARD, ERICA WERNER

________________________ ________________


 An occasional look at assertions by public officials and how well they adhere to the facts.

WASHINGTON — President Barack Obama told voters repeatedly during the health care debate that the overhaul legislation would bring down fast-rising health care costs and save them money. Now, he's hemming and hawing on that.

So far, the law he signed earlier this year hasn't had the desired effect. An analysis from Medicare's Office of the Actuary this week said that the nation's health care tab will go up — not down — through 2019 as a result of Obama's sweeping law, though the increase is modest.

Obama offered some caveats when asked in his news conference Friday about the apparent discrepancy between what he promised and what's actually happening so far. On several other topics, too, his rhetoric fell short of a full accounting.

A look at some of the claims at his news conference and how they compare with the facts:

More Politics news Obama laments 'painfully slow' recovery

In a White House news conference, President Obamainsisted that recovery from the deepest recession in decades is happening but conceded the "progress has been painfully slow." Full story


..OBAMA: Said he never expected to extend insurance coverage to an additional 31 million people "for free." He added that "we've made huge progress" if medical inflation could be brought down to the level of overall inflation, or somewhere slightly above that.

THE FACTS: Those claims may be supported in the fine print of the plan he pitched to Congress and a skeptical public months ago. But they were rarely heard back then. "My proposal would bring down the cost of health care for millions — families, businesses and the federal government," he declared in March.

Last August he predicted: "The American people are going to be glad that we acted to change an unsustainable system so that more people have coverage, we're bending the cost curve, and we're getting insurance reforms."


.On Friday, he conceded: "Bending the cost curve on health care is hard to do." The goal: "Slowly bring down those costs."

The White House contends that although health care costs will rise when most of the changes take hold in 2014 and coverage is extended to the uninsured, costs will go down over the longer term as controls kick in.

Read the live blog of Obama's press conference

OBAMA: "We took every idea out there about how to reduce or at least slow the costs of health care over time."

THE FACTS: One idea that most experts believe would do the most to control health costs — directly taxing health benefits — was missing in Obama's plan. Opposition from unions and others was too great, and Obama himself had campaigned against the idea.

Some of the major cost controllers that did make it into the law — including a tax on high-value insurance plans — don't start until 2018. That tax was watered down and delayed, and other cost-control approaches also softened after opposition from hospitals and other interest groups.

Health spending already accounts for about 17 percent of the economy and is projected to grow to nearly 20 percent in 2019.

Video: Obama takes on the GOP (on this page)

OBAMA: "So these policies of cutting taxes for the wealthiest Americans, of stripping away regulations that protect consumers, running up a record surplus to a record deficit — those policies finally culminated in the worst financial crisis we've had since the Great Depression."

THE FACTS: The president probably meant the broader economic crisis and not the meltdown of the financial industry when he talked about the "financial crisis." True enough, George W. Bush entered office with a $236 billion budget surplus in 2001, and in January 2009, before Obama was sworn into office, the Congressional Budget Office projected the deficit for the fiscal year 2009 to be $1.2 trillion.

But the surpluses the government foresaw in 2001 were based on a bubble economy that was bound to burst. And the deficit Obama inherited was only partly from Bush's fiscal policies.

Mostly it was a result of a recession that sapped tax revenues, increased the costs of safety net programs and demanded more government spending to stimulate the economy. As recently as 2007, the budget deficit was just $161.5 billion. The current annual deficit is now an estimated $1.5 trillion.

Read the live blog of Obama's press conference

OBAMA: Asked how he can lecture Afghan President Hamid Karzai about corruption when it's fueled in part by U.S. aid dollars, Obama said: "I've said to my national security team ... Let's be consistent in terms of how we operate across agencies. Let's make sure that our efforts there are not seen as somehow giving a wink and a nod to corruption."

THE FACTS: While acknowledging the situation is messy, Obama seemed to minimize it.

."Are there going to be occasions where we look and see that some of our folks on the ground have made compromises with people who are known to have engaged in corruption?" he asked. "You know, we're reviewing all that constantly and there may be occasions where that happens."

More Politics news Obama laments 'painfully slow' recovery

In a White House news conference, President Obamainsisted that recovery from the deepest recession in decades is happening but conceded the "progress has been painfully slow." Full story



..The United States spends more than $100 billion annually in Afghanistan, the world's second-poorest nation and one of the most corrupt. U.S. officials acknowledge that a significant percentage of the U.S. bankroll enriches shady characters even as it may finance worthy projects, or is stolen outright.

The CIA has paid Afghan warlords and power brokers for years, relying on them as informants and as leverage in the country's internal ethnic and tribal squabbles. Intelligence officials say payouts are cheap insurance, but development officials and diplomats say the money supports a culture of bribery.

Obama pledged to keep up pressure on Karzai. The Afghan leader recently intervened to free a presidential aide arrested on suspicion of soliciting a bribe. U.S. investigators played a central role in fingering the aide.

Associated Press writers Jim Kuhnhenn and Anne Gearan contributed to this report.

[Soul Crusher]

September 10, 2010
FACT CHECK: Obama's tone shifts on health care
Erica Werner And Calvin Woodward

President Barack Obama told voters repeatedly during the health care debate that the overhaul legislation would bring down fast-rising health care costs and save them money. Now, he's hemming and hawing on that.

So far, the law he signed earlier this year hasn't had the desired effect. An analysis from Medicare's Office of the Actuary this week said that the nation's health care tab will go up — not down — through 2019 as a result of Obama's sweeping law, though the increase is modest.

Obama offered some caveats when asked in his news conference Friday about the apparent discrepancy between what he promised and what's actually happening so far. On several other topics, too, his rhetoric fell short of a full accounting.

___

EDITOR'S NOTE — An occasional look at assertions by public officials and how well they adhere to the facts

___

A look at some of the claims at his news conference and how they compare with the facts:

OBAMA: Said he never expected to extend insurance coverage to an additional 31 million people "for free." He added that "we've made huge progress" if medical inflation could be brought down to the level of overall inflation, or somewhere slightly above that.

THE FACTS: Those claims may be supported in the fine print of the plan he pitched to Congress and a skeptical public months ago. But they were rarely heard back then. "My proposal would bring down the cost of health care for millions — families, businesses and the federal government," he declared in March.

Last August he predicted: "The American people are going to be glad that we acted to change an unsustainable system so that more people have coverage, we're bending the cost curve, and we're getting insurance reforms."

On Friday, he conceded: "Bending the cost curve on health care is hard to do." The goal: "Slowly bring down those costs."

The White House contends that although health care costs will rise when most of the changes take hold in 2014 and coverage is extended to the uninsured, costs will go down over the longer term as controls kick in.

___

OBAMA: "We took every idea out there about how to reduce or at least slow the costs of health care over time."

THE FACTS: One idea that most experts believe would do the most to control health costs — directly taxing health benefits — was missing in Obama's plan. Opposition from unions and others was too great, and Obama himself had campaigned against the idea.

Some of the major cost controllers that did make it into the law — including a tax on high-value insurance plans — don't start until 2018. That tax was watered down and delayed, and other cost-control approaches also softened after opposition from hospitals and other interest groups.

Health spending already accounts for about 17 percent of the economy and is projected to grow to nearly 20 percent in 2019.

___

OBAMA: "So these policies of cutting taxes for the wealthiest Americans, of stripping away regulations that protect consumers, running up a record surplus to a record deficit — those policies finally culminated in the worst financial crisis we've had since the Great Depression."

THE FACTS: The president probably meant the broader economic crisis and not the meltdown of the financial industry when he talked about the "financial crisis." True enough, George W. Bush entered office with a $236 billion budget surplus in 2001, and in January 2009, before Obama was sworn into office, the Congressional Budget Office projected the deficit for the fiscal year 2009 to be $1.2 trillion.

But the surpluses the government foresaw in 2001 were based on a bubble economy that was bound to burst. And the deficit Obama inherited was only partly from Bush's fiscal policies.

Mostly it was a result of a recession that sapped tax revenues, increased the costs of safety net programs and demanded more government spending to stimulate the economy. As recently as 2007, the budget deficit was just $161.5 billion. The current annual deficit is now an estimated $1.5 trillion.

___

OBAMA: Asked how he can lecture Afghan President Hamid Karzai about corruption when it's fueled in part by U.S. aid dollars, Obama said: "I've said to my national security team ... Let's be consistent in terms of how we operate across agencies. Let's make sure that our efforts there are not seen as somehow giving a wink and a nod to corruption."

THE FACTS: While acknowledging the situation is messy, Obama seemed to minimize it.

"Are there going to be occasions where we look and see that some of our folks on the ground have made compromises with people who are known to have engaged in corruption?" he asked. "You know, we're reviewing all that constantly and there may be occasions where that happens."

The United States spends more than $100 billion annually in Afghanistan, the world's second-poorest nation and one of the most corrupt. U.S. officials acknowledge that a significant percentage of the U.S. bankroll enriches shady characters even as it may finance worthy projects, or is stolen outright.

The CIA has paid Afghan warlords and power brokers for years, relying on them as informants and as leverage in the country's internal ethnic and tribal squabbles. Intelligence officials say payouts are cheap insurance, but development officials and diplomats say the money supports a culture of bribery.

Obama pledged to keep up pressure on Karzai. The Afghan leader recently intervened to free a presidential aide arrested on suspicion of soliciting a bribe. U.S. investigators played a central role in fingering the aide.

___

Associated Press writers Jim Kuhnhenn and Anne Gearan contributed to this report.

[Soul Crusher]

Chief Medicare Actuary: White House Health Savings Estimates 'Not Meaningful,' Give Inaccurate Picture
 
RICARDO ALONSO-ZALDIVAR | 09/13/10 09:27 PM |  

 
WASHINGTON — When a government report found that President Barack Obama's health overhaul would modestly raise the nation's total health care tab, the White House responded with a statistic suggesting costs would go down. It turns out that may be fuzzy math.

Health reform director Nancy-Ann DeParle wrote on the White House blog last week that the same government report indicates spending per insured person will be more than $1,000 lower in 2019 because of the law – some 9 percent below previous projections.

___

EDITOR'S NOTE – An occasional look at assertions by public officials and how well they adhere to the facts

___

"The act will make health care more affordable for Americans," DeParle said.

But the head of the nonpartisan economic unit at Medicare that produced the original cost report says the White House number "does not provide a meaningful or accurate indication" of the effect of the health care law.

"The amounts quoted in the White House blog are not meaningful and cannot be used to calculate the change in health expenditures per insured person," Richard Foster, Medicare's chief actuary, told The Associated Press.

The Obama administration stands by its statistic.

It's a dispute about numbers and how they're bandied about by powerful people in Washington.

But you don't need an economics degree to follow this one. All you have to do is remember your fractions.

The health care law expands coverage, reducing the number of uninsured by more than 32 million, although about 24 million will remain without coverage.

Still, the share of the population with insurance will go up by nearly 10 percentage points, to about 93 percent. And that makes a difference in the numbers.

If you divide total national health care spending by a bigger number of insured people, you get a smaller per-person result.

It's an interesting statistic, but it doesn't mean the problem of rising costs is solved.

"It's not that it's false, it's just that it will be a little misleading," John Allen Paulos, a mathematics professor at Temple University in Philadelphia, said of the White House number, calling it an "apples-to-oranges miscomparison."

Consider an imaginary country with just three citizens, Peter, Paul and Mary. Peter has health coverage but Paul and Mary are uninsured. Peter spends $1,000 on health care, but Paul and Mary can only afford $500 apiece because they lack coverage. Total national spending: $2,000. National spending per insured person: $2,000.

Now suppose a law gets passed to expand coverage. Paul gets insurance, but Mary remains uninsured. Now Peter and Paul are spending $1,000 apiece. Paul spends more than when he was uninsured, so total national health spending goes up to $2,500.

But because more people are covered, spending per insured person goes down to $1,250.

It's a simplistic comparison, but would you call that a savings?

Paulos said it would make more sense to first figure out the share of total national health care spending by people with health insurance, and then divide that result by the number of insured people – before and after the health care law.

The government hasn't run that calculation.

Richard Kronick, a senior Health and Human Services official, said the Obama administration disagrees that its number is misleading.

"There are a number of ways to evaluate health care spending and the new law," said Kronick. "Examining spending on each individual with health insurance is one useful data point."

National health care spending is a kitchen-sink statistic that includes personal health costs of the insured as well as the uninsured, and such categories as research and development and medical infrastructure. In 2019, when the overhaul is fully phased in, the tab will be $4.6 trillion.

Foster says it's acceptable to divide the number by the total U.S. population. In that case, per capita spending would $13,652 as a result of the law, and $13,387 without it.

The difference: just $265 per person more.

Paulos, the mathematician, said that sounds like a bargain to him. "It's a relatively small cost given that 30 million more people will be covered," he said. "You don't really need this kind of apples to oranges miscomparison