Conservative Principles Now

Analysis –

With the first half of the health care bill now passed out of the House the Speaker now pivots to the second half of the health care bill commonly referred to as the “doc fix.” The “doc fix” refers to the undoing of the flawed Medicare payment update formula, which Congress created but has routinely stopped from being enforced. Under current law, that formula would result in a 20 percent reduction in doctors’ pay under the Medicare program. This bill would cost another $210 billion, with long term implications in the trillions. This bill is attempting to fix a budget gimmick with yet another budget gimmick.

Major Floor Action –

• H.R. 3961 Medicare Physician Payment Reform Act of 2009 (Doc Fix)

Major Committee Action –

• The House Armed Services Committee will hold two significant hearings next week. On Tuesday they will discuss the “U.S. Strategy in Iraq and Afghanistan” and on Wednesday they will discuss the “Long Term Defense Budget Trends.”
• The House Foreign Affairs Committee will also hold several hearings next week on “Lifting Travel Ban on Cuba” and “Foreign Assistance and the Struggle Against Terrorism.”
• The House Homeland Security Committee will hold a hearing on “The Threat of al Qaeda.”
• The House Financial Services Committee is tentatively scheduled to continue mark up of legislation concerning the financial regulatory system.

House Speaker Nancy Pelosi and the House Democratic leadership are frantically trying to find enough votes to pass their giant 2,032 page health care legislation this weekend. But before Speaker Pelosi and liberals in Congress pass their big bill, the American taxpayers should be fully aware of the full price tag of this monster.

As Heritage analysts noted earlier in the week, the Congressional Budget Office released its preliminary score of the bill (H.R. 3962) but too many in the media have not been reporting its true cost. The true cost is not the net spending on only the coverage related provisions ($897 billion) but rather the total gross spending for the coverage provisions ($1.05 trillion) as well as any additional spending in the bill (approximately $217 billion). That would raise the plan’s price tag to about $1.5 trillion when including the roughly $210 billion cost of the “doc fix” is included. The “doc fix” refers to the undoing of the flawed Medicare payment update formula, which Congress created but has routinely stopped from being enforced. Under current law, that formula would result in a 20 percent reduction in doctors’ pay under the Medicare program.

The real story about the true cost is even more dramatic. The bill is front loaded with taxes, and back-loaded with spending in the first ten years. Since most of the spending in the House bill does not fully go into effect until 2014, the 10-year cost estimates based on the preliminary CBO score (for years 2010 through 2019) only account for six years of new spending under the plan. Once it is implemented (over a full 10-year window from years 2014 to 2023), the giant House health bill carries a price tag of $2.4 trillion, or as much as $2.6 trillion with the “doc fix.”