Friends,
On Sunday, after a year of deliberation, Congress will complete consideration of comprehensive health care reform legislation.
I cannot overstate the urgency of health care reform. Every day, 123 Americans die because they don't have access to health insurance. And every day, small businesses call my office with stories of doubled premiums, sick workers they cannot afford to insure, or the downright collapse of their business because of a shocking increase in health insurance premiums. And now, opponents of reform are taking advantage of the complexity of this legislation to mislead and scare us.
These opponents argue one of the imperfections in this bill is its cost. My colleague, Representative Paul Ryan, a Republican from Wisconsin, has recently accused supporters of this bill of hiding its true cost by covering only six years of costs with ten years of revenue. This criticism fails to account for the fact that several of the bill's most important cost saving benefits - the creation of consumer-friendly exchanges, for example - will take several years and sizable up-front investments before they're up and running, while many other insurance reforms - like the bans on pre-existing condition exclusions and lifetime premium caps - will take effect much sooner.
You don't have to take my word for it. The nonpartisan Congressional Budget Office yesterday estimated that this health care proposal will reduce the deficit by $138 billion over the 2010-2019 period and, more importantly, in the ensuing decade, will reduce the deficit by $1.3 trillion. If the anti-reform criticisms were true, we would expect less savings and more debt in the longer term. The CBO's analysis clearly debunks these claims.
In fact, many of the official estimates under-predict the actual savings that will result from reform. The CBO is not permitted to take into account future savings that will be realized as a result of changing incentives and expected efficiences in the coming years. Because of this policy, nearly $600 billion in savings over the next decade, as estaimated by leading Harvard economist David Culter in the Wall Street Journal, doesn't show up in the budget scores. We know - and economists agree - that these cost savings exist.
Nearly every tested idea for reforming Medicare payments is contained in this bill. All of these programs have been proven to lower costs, and the Medicare savings they produce will put significant downward pressure on private insurance premiums as well. These reforms include a pilot program to increase payments for doctors who deliver high-quality care at lower cost, one to deliver bonuses to hospitals that improve patient results after heart bypasses and other major procedures, and another that would give clinicians an incentive to work together to smooth care and reduce complications.
The true cost here is inaction. Health care costs are a clear and present danger to our country. Today, medical care consumes eighteen cents of every dollar we earn. Between 1999 and 2009, the average annual premium for employer-sponsored family insurance coverage rose from $5,800 to $13,400, and the average cost per Medicare beneficiary went from $5,500 to $11,900.
If we do nothing, the annual cost of insurance for the average family insurance will go from $15,000 today to over $27,000 in the next ten years, devouring over a fifth of every dollar you earn. Businesses will see their health insurance expenses rise from 10% of total labor costs to 17%; health-related spending will essentially absorb all future wage increases and economic growth; and just as the last Baby Boomers leave the workforce, our national treasury will buckle under $40 trillion in unfunded Medicare costs.
This bill isn't perfect, but its imperfections have little to do with its costs. Over time, this bill will wring billions of dollars in inefficiency and waste from our system, re-center Medicare on quality over quantity of care, shrink the federal deficit, and open the door for 30 million Americans whom our current system has failed to cover.
Jim
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