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CBO: No great savings from health reform

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Don’t expect the health reform law to tame health care costs. That’s the conclusion of the director of the Congressional Budget Office, who also suggested some of the simplest ways to moderate costs would be to roll back some of its key provisions.

In a July 12 speech, Douglas Elmendorf previewed a forthcoming CBO report that studied two dozen demonstration projects aimed at reducing health care spending. And all of them have showed disappointing results, Elmendorf said, according to reports on his speech by the Financial Times and Congressional Quarterly.

“It turns out to be pretty hard to take ideas that seem to work in certain contexts and proliferate that throughout the health care system. The results are discouraging," Elmendorf said, according to Financial Times.

Among those demonstration projects were accountable care organizations, medical homes and bundled payments—all things now being expanded by the federal Medicare agency with the authority of the 2010 health reform law.

But CBO has concluded that those programs can only save a few billion dollars over the next decade. And that led Elmendorf to list—though not recommend—other actions that could mitigate federal costs over that time.

At the top of his list? Undo key parts of the health reform law.

The Patient Protection and Affordable Care Act mandates that all states expand Medicaid eligibility for all adults making as much as 133 percent of the federal poverty limit. CBO projects the expansion will add 16 million more Americans to the Medicaid rolls—with the federal government picking up the lion’s share of the tab initially.

In Indiana, adults making 25 percent or less than the federal poverty limit—which is currently $22,350 for a family of four—currently qualify for Medicaid coverage. The Medicaid expansion is expected to add more than 500,000 Hoosiers to the program.

In addition, the health reform law raises various taxes to pay for subsidies to help individuals and small-business workers afford coverage in newly created online exchanges. These subsidies are projected to average about $5,000 per family of four, according to CBO projections.

The exchanges are expected to cover 24 million Americans, including more than 1 million Hoosiers. Subsidies will be available for anyone with household income of less than 4 times the federal poverty limit, or $89,400 for a family of four.


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  • Why am I not surprised?
    Does our government know how to do anything right? How can someone in the middle class get ahead when everyone making the decisions in DC are millionaires who are not affected by the cost of anything???????
  • Not quite, Bert
    Bert, the Good Samaritan performed his services voluntarily and without coercion from the government. The story would have been meaningless otherwise. Regarding the 7 figure paychecks, while I won't defend the practice, it's a red herring in the affordability issue.
  • CBO report
    I think this is the perfect illustration of why we need single payer for all. Time to stop the 7 figure paychecks for Insurance Executives who heal no one. Medicare for all. It's the Christian thing to do. Please read the story of the Good Samaritan.

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    1. The lack of street-level retail in this part of the Block 400 development is a huge oversight and somewhat perplexing given the high quality of recent city-backed developments downtown. This portion of an otherwise stellar development is going to have an extremely negative impact on the aesthetics, urban environment, walkability, and livability of the NW quad.

      I'm not sure why One America would oppose including retail. And I find it very hard to believe that the thousands of office workers literally footsteps away wouldn't be able to support new lunchtime destinations and other businesses along Illinois and Vermont. We've got to reconnect the disjointed segments of our blossoming downtown, not create yet another lifeless dead zone that no one wants to walk through. Sadly, that is exactly what this massive ugly single-use structure will accomplish.

      Why not follow the precedent set by the proposed garage in Broad Ripple and create an attractive mixed-use structure? Why does the city get it there but not downtown?

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    3. This comes from an executive who gave his wife a Bentley as a wedding present. He is heir to billions of dollars. He should be working for a dollar a year and stock options only. Seems like a conflict of interest, time to bring in a non-relative as CEO. Haven't met him, but have heard his arrogance is legendary.

    4. If the property is improved, property taxes increase - more revenue. If AUL's employment grows, more income taxes - more revenue. If more people move and/or work downtown, it means more demand for goods and services, more employment, more taxes - more revenue, etc., etc. It's not just the city throwing money at big companies. There's much, much more. Yes, the project has private backing, but apparently not enough to make the deal work and therefore they don't have it covered. And while Marsh is a nice anchor, they are no credit tenant like a Kroger or somebody. And if the police department has a major shortfall, they need to reduce the force. This city has way too many policemen.

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