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HHS analysts: Health tab would keep rising

They also said proposed Medicare savings in the Senate bill might lead to service cuts.

WASHINGTON - Democrats trying to push President Obama's health-care overhaul through the Senate got a sober warning yesterday that costs would keep going up and that proposed Medicare savings might harm the program.

A new report from economic analysts at the Health and Human Services Department said the nation's $2.5 trillion annual health-care tab would not shrink under the Democratic blueprint but would grow somewhat more rapidly than if Congress did nothing.

More troubling was the report's assessment that the Democrats' plan to squeeze Medicare for $493 billion over 10 years in savings relies on specific policy changes that "may be unrealistic" and could lead to cuts in services. The Medicare savings are expected to cover about half the nearly $1 trillion, 10-year cost of expanding coverage to the uninsured.

The report also warned that a new long-term-care insurance plan in the bill could "face a significant risk of failure" because it would attract people in poor health, leading to higher and higher premiums, and eventually triggering an "insurance death spiral." Sen. Chris Dodd (D., Conn.) brushed that aside, pointing to an analysis by the Congressional Budget Office that found the program would be solvent for 75 years.

The one bright note: The report said the bill would provide coverage to 93 percent of U.S. residents, reducing the number of uninsured people by about 33 million.

The analysis from the Office of the Actuary, which does long-range cost estimates for Medicare, was prefaced by a disclaimer saying it did not represent the official position of the Obama administration. Unlike estimates from the budget office, which have mainly focused on the bill's impact on the federal deficit, the actuaries looked at total public and private costs over the next 10 years.

When previous Congresses have cut Medicare too deeply, providers have usually persuaded lawmakers in subsequent years to restore at least some of the money. That same scenario is playing out this year as doctors try to persuade Congress to permanently repeal automatic spending cuts that would cut their Medicare fees 21 percent next year.

The actuaries' analysis of the Senate bill echoes their previously released reports about the House bill. Republicans seized on the report as validation of their concerns that the overhaul bill is both unaffordable and unrealistic.

Senate Minority Leader Mitch McConnell (R., Ky.) said: "This analysis speaks for itself. This bill is a sham."

Sen. Pat Roberts (R., Kansas) said release of the report was "almost like Pearl Harbor - a day of infamy."

Democrats have sought to deflect the criticism by playing up the conclusions of the CBO, which show the bills would reduce the federal deficit and are not likely to drive up premiums for most people with job-based coverage.

White House health-care spokeswoman Linda Douglass emphasized the report's finding that "reform will have 'a significant downward impact on future health care cost growth rates.' "

Also yesterday, in a victory for people with cancer and other serious medical problems, the White House agreed to help close a loophole in the Senate allowing annual dollar limits on their care.

Tucked in a clause of the Senate bill captioned "No lifetime or annual limits" is a provision that would in fact permit such caps. As now written, it would let insurance companies place annual limits on the dollar value of medical care, as long as the limits are not "unreasonable." The bill does not define what level of limits would be allowable. Proponents said such limits were needed to prevent premiums from going up overall.

The American Cancer Society Cancer Action Network first called attention to the problem. Stephen Finan, a policy expert with the network, said White House health-reform director Nancy Ann DeParle agreed in a call yesterday afternoon with cancer society officials to work to change the Senate language.