Myth: Health reform will reduce health care costs.
Fact: Left unchecked, the country's health bill will jump from $2.5 trillion in 2009 to over $4.3 trillion in 2018. The Baucus bill will add at least another $774 billion to health costs over the decade. 

AEI scholar Joseph Antos, a co-author of the Brookings report Bending the Curve: Effective Steps to Address Long-Term Health Care Spending Growth, explains that:

• According to the Congressional Budget Office calculations, the House bill will increase the federal deficit by $239 billion over the first 10 years, and even more after that.
  

• The Senate Finance version advanced by Chairman Baucus and endorsed by President Obama does better than the House bill, but only because it includes unrealistic provisions that Congress will override in future years.
  

• The Baucus bill includes automatic cuts in Medicare payments to hospitals and other health care providers worth $227 billion, but Congress is sure to override the cuts in later years. 
  

• Similar cuts to physicians have been "deferred" in each of the past 5 years, and the Baucus bill once again provides a one-year fix.  Raising payments one year at a time means over $200 billion in additional spending through 2019 that is not counted in the bill.   
  

• Antos warns that it is likely that the Baucus bill will add at least $270 billion to the federal deficit.
  

"In its haste to expand health insurance coverage, Congress has not focused on the larger challenge of making health insurance affordable.  True affordability means spending less on health care, not more on subsidies."  Instead of relying on imaginary cuts in Medicare payments to providers, Antos recommends a market-based agenda which would:

• Promote effective competition among insurers and between providers. 
  

• Promote informed consumer choice and responsibility.

• Cap the tax benefits given to employees for health insurance bought on the job.
  

• Replace Medicare administered pricing with competitive bidding methods that work.
  

• Hold Medicare and Medicaid accountable for billions of dollars lost to fraud, waste, and abuse.
  

• Institute real reforms in the medical liability system, including caps on awards and specialized health courts that can provide appropriate compensation to injured patients.
  

"Congress has promised more than it can deliver," warns Antos, "and the middle class will pay for it in higher taxes, higher premiums, and higher out-of-pocket costs.  A more responsible approach would replace government controls with clear financial incentives, better information, and purchasing power in the hands of consumers."

Joseph Antos is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at AEI. He is also a commissioner of the Maryland Health Services Cost Review Commission, and a health adviser to the Congressional Budget Office. Before joining AEI, Mr. Antos was Assistant Director for Health and Human Resources at the Congressional Budget Office.

Mr. Antos is available for interviews and can be reached at jantos@aei.org  or through his research assistant wistar.wilson@aei.org or 202.862.4876.