Affordable Health Insurance Funding in Spending Bill, But What About Deficits?
Posted: Tuesday, December 15, 2009
by Yamileth Medina
VitalOne Health
While the healthcare reform bill is getting most of the attention, a massive general spending bill that was recently passed by Congress deserves some as well. The budget legislation includes defense appropriations, funding for jobs, and other elements. It also increased funding in several health-related areas. These funds may indirectly result in more affordable health insurance.
- The Veteran's Health Administration, which provides affordable health insurance and medical care to armed forces veterans, had its budget increased by $4.1 billion for the 2010 budget year, to just over $45 billion.
- Medicare and Medicaid, among other federal benefit programs, received $650 billion in mandatory payments within the bill. This does not include any possible costs that would result from allowing individuals between the ages of 55 and 64 to buy into the former. The expenses of the government-run affordable health insurance option for seniors could potentially explode if millions more Americans were added to the rolls, even though the extension of benefits would not be a pure entitlement. Despite the healthcare reform compromise proposal requiring that middle-aged individuals in that age range pay health insurance premiums into the system, detractors still predict that the cost of covering their medical expenses will outweigh their premium payments. There are already fears of looming bankruptcy ahead for Medicare, and that wouldn't help. As for Medicaid, the affordable health insurance program for the poor will probably see its usage decrease if healthcare reform passes and the included subsidies assist individuals and families on the higher end of the Medicaid eligibility scale in buying health insurance. However, any such changes would not take effect for several years.
- The annual budget of the National Institute of Health--one of the U.S.'s premier medical research centers--was increased by about $700 million. Its budget now stands at $31 billion. On the one hand, more funding for the NIH will result in medical innovations that are effective and can save time and money for insurers, doctors, hospitals, and patients; that would make affordable health insurance more widely available. Unfortunately, some discoveries will be amazingly beneficial but expensive: health insurance premiums will then be more expensive for the plans which choose to cover them.
- Various federal programs, including those relating to health, under direct congressional control will have their budgets increased by 10% in the recently passed bill. One of the affordable health insurance programs impacted may be the State Children's Health Insurance Plan (SCHIP). The plan is generally popular with legislators, as well as the public; it is far less controversial than the healthcare reform bills meant to cover adults.
The price tag of this congressional spending bill is daunting. The version passed by the Senate for the 2010 budget year--which began on October 1st--costs $1.1 trillion. Even scarier to deficit hawks is the provision in the bill that would allow the federal government to, in effect, increase its credit limit. The maximum national debt the government is legally allowed to borrow will rise to $14 trillion from the current $12.1 trillion; and to think, on the eve of a new decade, that we entered this one with a national budget surplus! Such a change is being pushed for by Democrats, although politicians from both parties are understandably wary of adding nearly $1 trillion of healthcare reform legislation on top of that. Predictably, most Democrats voted in favor of the budget appropriations bill, while the majority of Republicans voted against it. Some members of President Obama's own party, however, are urging a so-called "pay-as-you-go" law that would prevent new federal spending allocations or tax cuts to go forward unless plans are presented that would pay for them and ensure that they do not add to the national deficit. With many legislators loathe to approve tax increases on any population or category on spending, such a rule would put the Democrats' attempt at providing affordable health insurance to more of the American population in peril. In addition, there has been bipartisan support for the formation of a deficit reduction task force.
Yamileth Medina is an up and coming expert on Health Insurance and Healthcare Reform. She aims to help people realize that they can find affordable health insurance right now while waiting for a public option, if it ever gets passed. Yamileth lives in Miami, FL.
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