What We Learned from Yesterday’s Senate PPACA Meeting

January 23, 2013

Yesterday the Senate’s Select Committee on the Patient Protection & Affordable Care Act met, and had two presenters offer differing views of the PPACA and what Florida should do regarding implementation of the act commonly known as ObamaCare.

The first presenter was Jonathan Gruber, a PhD and Professor at MIT and key architect of MassCare (Massachusetts’ version of ObamaCare) as well as the PPACA itself.  Having been one of the proponents and creators of the plan, Professor Gruber demonstrated a clear bias in favor of full implementation of the PPACA. However he spent most of the meeting accusing the other presenter, Michael Cannon of the Cato Institute, of being the biased one.

A few times during the meeting the discussion between Cannon and Gruber got a bit heated, with Cannon challenging Gruber directly on some of his claims.  Gruber made a number of unsubstantiated comments, and according to our research blatantly mislead on some of the impacts Floridians could expect to see once the PPACA is implemented.

Here are some of the important take-aways from the meeting:

1.  Despite their differing opinions of the PPACA, both Gruber and Cannon agreed that Florida should not implement a state-based health insurance exchange.  Of course, Cannon believes that the state should neither create or partner with the Feds on an exchange and instead leave the Feds to deal with the mess they have created rather than being an administrator for them, a position we agree with.

2.  Despite the misleading name of the Act, Jonathan Gruber clearly stated more than once that the purpose of MassCare, and subsequently the Affordable Care Act, was not to provide affordable, lower costing health care but to provide more health care.  He admitted that, by requiring increased coverage, costs would of course be higher not lower as so many supporters of the PPACA would like you to believe.  He specifically pointed out that young, individual, private purchasers of insurance would see the largest insurance cost increases, and then suggested that government might want to figure out a way to help them out with the costs.

3.  Professor Gruber exposed his anti-consumer choice and anti-market opinions. His two claims that startled us: He said that having too many choices is bad because it confuses consumers, and that having too many choices can allow unfair competition.  Of course, both of these claims are counter to economic freedom and support government telling you what you need rather than allowing you to choose for yourself.  He wants us to believe that central planning and fewer choices are better for consumers and will provide more competition, but common sense and history show us otherwise.

4.  Last but certainly not least, it was again demonstrated that supporters of the PPACA want states to ignore history, expand our broken Medicaid system, and take as much Federal stimulus as possible to do it.  Why is this ignoring history and why is this a bad idea?  The Federal government has repeatedly under-estimated the actual cost of new health care programs.  A 2009 Joint Economic Committee report analyzed original estimates versus real costs and the results are scary, a few examples:

  • In 1965, Congress estimated that the hospital insurance portion of Medicare (Part A) would cost about $9 billion annually by 1990.  Actual Part A spending in 1990 was $67 billion.
  • In 1967, Congress predicted that the new Medicare program would cost about $12 billion in 1990.  Actual Medicare spending in 1990 was $110 billion.  In 2010 the cost of the Medicare program was $523 billion.

Not only does Professor Gruber want to ignore that the estimated cost of Medicaid expansion is likely far less than what it will actually cost, he also says that Floridians don’t need to worry about the federal deficit and federal spending. He prefers we just take the Federal government at their promise that they will fund 90% of Medicaid expansion in perpetuity.  We think this is a dangerous gamble that will most certainly backfire on Floridians.

The Kaiser Family Foundation and Urban Institute estimated the federal government’s share of Medicaid expansion will cost more than $800 billion over the next ten years, more than $66 billion just for Florida.  What are the chances that a couple of years in, the Feds will decide they can’t afford this massive program and tell states they have to pick up more of the tab?  Michael Cannon quoted a Cato analysis that estimates Florida’s actual cost for Medicaid expansion will be about $20 billion over ten years. Florida’s Agency for Health Care Administration estimated that if Florida expanded Medicaid and then the Feds cut back, only paying the percentage share they currently pay, it would cost us $26 billion over ten years. This gamble is something Floridians simply can’t afford.

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