Fuzzy Math on Health Care Reform
When a government report found that President Barack Obama's health overhaul would modestly raise the nation's total health care tab, the White House responded with a statistic suggesting costs would go down...It turns out that may be fuzzy math.
The head of the nonpartisan economic unit at Medicare that produced the original cost report says the White House number "does not provide a meaningful or accurate indication" of the effect of the health care law.
"The amounts quoted in the White House blog are not meaningful and cannot be used to calculate the change in health expenditures per insured person," Richard Foster, Medicare's chief actuary, told The Associated Press.
If you divide total national health care spending by a bigger number of insured people, you get a smaller per-person result. It's an interesting statistic, but it doesn't mean the problem of rising costs is solved.
"It's not that it's false, it's just that it will be a little misleading," John Allen Paulos, a mathematics professor at Temple University in Philadelphia, said of the White House number, calling it an "apples-to-oranges miscomparison."
about the potential effects of H.R. 3590, the Patient Protection and Affordable Care Act
(PPACA, Public Law 111-148)
* The Obama Administration’s own Medicare actuaries released their analysis of the Democrats’ health overhaul warning that 16 million Americans will lose employer-provided health insurance.
* The non-partisan Congressional Budget Office estimate predicts that 9 million Americans will lose employer-provided health insurance because of the significant changes the Democrats made to America’s health care system.
How can this be true? As Fortune.com points out, because of the way the Democrats wrote the health law, it is much cheaper for many employers to pay the tax penalty than it is to offer health insurance to their employees. For example:
* An AT&T report notes that they spent $4.7 billion on medical costs but would have been taxed a much lower amount ($600 million) for not offering their 1.2 million employees, retirees, and their dependents’ health care benefits – a savings of $4.1 billion for the company.
* Fortune estimates Caterpillar could reduce its expenses by 70% if they eliminate health benefits and instead pay the tax.
So far, some of America’s biggest companies have begun warning that the tax changes in the Democrats’ health care bill will reduce their earnings, threatening their ability to hire new workers and retain existing ones. Here is a quick look at just some of those companies, the number of workers they employ, and the added charges to earnings they will bear as a result of the Democrats’ health care bill:
Number of Employees
In Health Care Costs
| 3M || 74,835 || $90 million |
| AT&T || 281,000 || $1 billion |
| Caterpillar || 93,813 || $100 million |
| John Deere || 51,300 || $150 million |
| Medtronic || 41,000 || $150-200 million |
| Prudential || 41,943 || $100 million |
| Valero || 20,920 || $15-20 million |
FACT # 2:
FACT # 4:
Again, it is no wonder NFIB said, “the small business tax credit will do little to nothing to make purchasing insurance affordable for more small firms.”
The Democrats’ health care overhaul created a new Medicare tax. Since the majority of small businesses pay taxes at the individual level, this tax will hit the income of many small business owners. According to NFIB, “The businesses most likely to see the tax increase are those that employ between 20 to 200 workers. These businesses account for more than one-quarter of the American workforce.” This is the last thing that the 1 in 10 Americans currently out-of-work need. Congress should be looking to help employers create jobs, not adopting policies that further threaten job creation and job growth.