Prepare to hear a lot of spin and talking points over the coming week regarding the magic Health Care Bill From the Senate which both expands health care coverage for 30 million and will generate $138 billion in savings over 10 years.
Do you note that the deal struck by Senator Ben Nelson relieved his state from increased Medicare expenses that fall upon the state? Why would this be a concern in a bill that "saves $138 billion"? Therein resides the truth.
As I watch television and type Senator Kent Conrad keep referencing the Congressional Budget Office's findings as his cover. They make the case that it "moves the cost curve". Conrad even said that Medicare is slated to go broke in 8 years if we stay the course. He is correct on this one point.
However the reason why they claim that there is $138 billion in savings over 10 years is as follows:
- The Tax Collections for these reforms start next year. The benefits distribution doesn't start until 2014. Thus they have years to build up the money pool but get to distribute it over 6 years and call it "savings".
- There will be more people paying into health care via mandated coverage thus more money and more people paying into the pot means more money to claim.
- Taxes are increased by $520 Billion Over 10 Years (Note - I am not sure if the mandated health care participation are considered "premiums" or if they are taxes. It is possible that both streams of money are used to fund this legislation)
- The States Will Have To Pay More For Health Care - Medicare - Thus while it might be true that the federal government as better funded health care program also means that your state taxes will likely go up to cover these increased state burden