Posted: Feb 10, 2011 4:52 PM
Washington, D.C. - U.S. Representative Charles W. Boustany, Jr., (R-Southwest Louisiana), today raised serious questions to Dr. Donald Berwick, Administrator at the Centers for Medicare and Medicaid Services (CMS) and Richard Foster, Chief Actuary for the Centers for CMS, concerning the health-care law's impact on seniors and federal entitlement programs at a Ways and Means hearing.
Boustany challenged Berwick on problems the new health law will cause for patients who cannot find a doctor. He also questioned Berwick's written plans to limit seniors' access to new treatments by blocking new technology. Boustany cited a recent study by the non-partisan Center for Retirement Research discussing design flaws in the new program.
In his questioning of Foster, Medicare's chief actuary, Boustany sought a clarification on whether a new disability entitlement program, the CLASS program, will prove to be unsustainable. "Insurance experts outside government conclude CLASS is likely to suffer from severe adverse selection, attracting less healthy enrollees which will drive up premiums," Boustany said. Foster agreed, repeating his April 2010 warnings to Congress that CLASS premiums could rise so fast that the program enters an "insurance death spiral."
Boustany has concerns that adding a new unfunded entitlement program like CLASS to the federal budget will require a taxpayer bailout of the program. It could consume funds which could be used to address Medicare's long-term fiscal challenges. Before passage of the new health law, the non-partisan Congressional Budget Office (CBO) warned "the CLASS program would inevitably add to future deficits (on a cash basis) by more than it reduces deficits in the near term, even though the premiums would be set to ensure solvency of the program." CBO said these deficit increases would surpass "the order of tens of billions of dollars for each 10-year period after 2029."
CLASS also faces bipartisan opposition in the Senate. Senate Budget Committee Chairman Kent Conrad (D-N.D.) called the program "a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of." An amendment to strike CLASS from the new health-care law received 51 votes in the Senate, with the support of 12 Democratic Senators.
According to CBO, the health-care law enacted last year cuts Medicare by over one-half trillion dollars from 2010 to 2019. Additionally, the CMS itself predicts that national health care spending will increase by a total of $311 billion over that same period.
The health-care law has a large impact on Medicare beneficiaries, as an estimated 1.2 million seniors will be forced out of their MA plan or prescription drug plan next year alone from the Democrats' law. In Louisiana, there are more than 659,000 Medicare beneficiaries, with more than 99,000 in District 7.