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Reality Check: CMS Report Confirms Reform Will Benefit Seniors, Slow Cost Growth

Linda Douglass, with the White House Office of Health Reform, debunks the distortion of a new report from the Actuary of the Centers for Medicare and Medicaid Services coming from opponents of reform.
Reality Check

Opponents of reform continue to prove they are willing to say or do anything to defend the status quo.  Today, they're out of the gate with a predictable distortion of a new report from the Actuary of the Centers for Medicare and Medicaid Services.  The alarmist headline of their press release screams that the Senate health reform bill "makes health care more expensive than doing nothing at all."

But here's what a more thorough reading reveals: the report confirms that the bill adds years to the life of Medicare, lowers costs for seniors, and slows the rate of health care cost growth.

Since the report comes from the folks who report to the Medicare trustees, it makes sense to start by looking at what it says about the cost of Medicare.

On that front, the report finds that the Senate health reform bill will extend the life of the Medicare trust fund by nine years.  It also provides real savings for seniors.  By 2019, the CMS reports, the bill 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.

More broadly, the report finds that reform will have a "a significant downward impact on future health care cost growth rates."  As savings from reform kick in, national health expenditures are projected to increase at a slower annual rate under the Senate bill than under the status quo.

And those results come even as the CMS takes a more conservative approach to measuring savings than many other independent experts have taken – meaning they may well underestimate the full effects of reform.  The CBO and other independent experts cite savings from additional critical cost-control provisions such as:

  • Injecting accountability, competition, and choice into the system through the new insurance exchange.
  • Giving providers incentives to coordinate care.
  • Transforming Medicare payment policies – which in turn influence the private sector – to reward quality of care.

So how did reform's opponents manage to use this report to claim that costs will increase?  They cherry-picked total expenditures at a singular, fixed point in time – ignoring the overall rate of cost growth, the impact on Medicare and America’s seniors, and the fact that millions of more Americans will be covered.

It’s the kind of claim folks here in Washington love. It might be technically "true" but it hardly explains the truth.

Linda Douglass is with the White House Office of Health Reform