U.S. Senators and physicians Tom Coburn and John Barrasso released a new oversight report on the federal health law, detailing how many of the economic and financial consequences of the new law are worse than anticipated.

Click HERE to see what others are saying about Grim Diagnosis…

Outgoing Democratic Governor of Tennessee, Phil Bredesen, provides many paralleled critiques of the new health care law in his new book, Fresh Medicine.

Summary of Governor Bredesen’s “Fresh Medicine” below:

DEMOCRATIC GOVERNOR SAYS HEALTH CARE LAW MADE PROBLEMS “WORSE”

Governor Phil Bredesen (D-TN) Offers Scathing Critique of Health Care Law

“Congress and the Obama Administration have just added over thirty million people

into an obsolete and broken system and done little to address the underlying problems;

in multiple ways, they’ve made them worse.” (introduction)

Deficits Will Soar Higher

• “We talk about ‘not increasing the deficit,’ which is Washington speak. The structural deficit is expanding and will continue to expand at a dangerous rate.” (p. 27)

• “The passage of the Affordable Care Act was made politically acceptable by setting up a straw man: would it reduce the deficit or not? When CBO announced that the legislation would indeed reduce it, the political path to passage was cleared. But if we make even the most obvious and sensible real-world adjustments to their analysis, the answer is different. Take out the CLASS Act funds—no insurance company in America would be allowed to do what the CBO rules permitted. Add an estimate of the real cost of appropriations that were made for one year but clearly intended to be continued, and include an estimate of the new administrative costs in HHS and the IRS. In May, well after Affordable Care Act’s passage, the CBO added an additional $115 billion to the cost of the legislation to reflect these. Add an estimate for the appropriations for which there were no numbers, only ‘sum sufficient’ language. These are not esoteric adjustments, just commonsense ones. But when they’re made, the legislation no longer ‘reduces the deficit,’ it adds to it. If you don’t believe the Medicare rate reductions will actually happen, it adds even more.” (p. 38)

Costs Will Continue Increasing

• “This year’s reform presented a fine opportunity to make some progress in containing the costs of our health care and we passed it up… Its attention to controlling costs is limited, in the future, and has an air of wishful thinking about it.” (p. 26)

• “We failed to use the opportunity to address the cost issue substantively. Worse yet, we also did some things likely to make our health care obligations even more expensive in the years ahead.” (p. 30)

• “Let me make a prediction here: subsidized, Individual Exchange-based health insurance is an open-ended entitlement that will ultimately, and perhaps quite quickly, create extremely large and unbudgeted costs for our federal government.” (p. 32-33)

• “Even associates of mine who strongly support the Affordable Care Act acknowledge privately that its main purpose has been expanding coverage. Their argument is that we need to do the expansions now and we’ll revisit costs once the new coverage is in place. But this is a terrible strategy.” (p. 35)

• “[W]hen you’re in a boat that is taking on water fast and may sink, you don’t try to ‘bend the curve’ of how much water is coming in; you try to plug the hole and start bailing. The cost control provisions of the Affordable Care Act don’t plug the hole we already have, punch a few new ones for good measure, and bail with a paper cup.” (p. 35)

Reform Makes Current Health Care Problems Worse

• “What a stunning disappointment. The health care “reform” we finally wrote into law isn’t transformational. It provides health insurance for a great many more people, but doesn’t directly attack any of the deep structural problems of health care.” (p.12)

• “Even seen through [a] practical filter, what we finally accomplished is still a deep disappointment.” (p.12)

• “It’s as if we had inherited a proud old house that had deteriorated over the years. Now it’s in disrepair- sagging floors, rusty pipes, and costing a fortune to maintain. Bur rather than rolling up our sleeves….we choose to tack a cobbled-together addition on the back, slap a coat of paint on everything, and pronounce it fixed.” (p. 12)

• “[T]he president left the design of his reform to the most partisan body in America. Democrats were firmly in the majority and wrote the legislation, and the dream of beginning a new post-partisan era came down to the chairman of the Senate Finance Committee trying to find a few tweaks that might dress up the final vote with a Republican senator or two.” (p. 39-40)

Employers Will Drop Coverage

• “[The discrepancy between a fine of a few thousand dollars and the much higher cost of contributions to employees’ health policies] isn’t going to be a small effect. Employers with tens of millions of employees in their organizations are going to take a hard look at this. It represents a genuine design flaw in the Exchange system—setting up the economic incentives to favor exactly what you don’t want: employers dumping into the federal system. Perhaps it’s an oversight by the designers who aren’t really attached to the world where nickels and dimes count. Or it may be just what they’re counting on, as a back-door approach to a government-run system.” (p. 32)

• “[S]ubsidized Exchange health insurance is structured to be so much more attractive than other alternatives that I believe it’s likely to grow, and with it the federal entitlement subsidies, far beyond the scope that was originally anticipated. What will make it grow is a third group that can potentially enter—those who now have group insurance. There are a lot of businesses—small, medium, and large—in America that, when they do the numbers, are going to discover that dropping the health insurance coverage they now offer and moving their employees into the Individual Exchange program is better for them….” (pp. 30-31)

• “For a great many employers, when they compare the total costs of dropping coverage with those of keeping it, dropping it will make good financial sense. Even today, there’s already significant erosion of group health insurance as firms face economic pressure. Once there’s a clear path that doesn’t hurt their employees; dropping coverage will be a very attractive option.” (p. 31)

• “I’m confident that many employers are looking hard at these options now, and by 2014 there will be a mini-industry of consultants to show them how to do it and what they can save.” (p. 31)

• “If someone were starting a company in 2014, it would be a perfectly sensible business decision for them to decide right at the start to permanently stay out of the business of offering health insurance.” (p. 32)

• “As these small businesses grow, some will reach a size where fines would start to apply, but a fine of two or three thousand dollars will look very attractive as an alternative to a contribution of $15,000 or more for an employer-sponsored family policy.” (p. 32)

Taxpayers Could Face Bailout of CLASS Program

• “[T]he CLASS Act (that’s the Community Living Assistance Services and Supports program)… creates an entirely new entitlement apart from the coverage expansion for the uninsured… But its terms quite obviously open it to strong adverse selection—signing up a disproportionate number of sick people. The ink was hardly dry on the Affordable Care Act before the CMS actuary stated that the CLASS Act would be out of money by about 2025. At that point, we will have been taking our citizens’ good faith premium for ten years. We’re not going to fail to honor our obligations and we can expect to be subsidizing this entitlement in growing amounts in the years ahead.” (p. 34)

• “But [CBO] work[s] within the framework of a set of rules that sometimes conceal the underlying realities. In their ‘scoring’ of the Affordable Care Act, for example, one of the significant ways of paying for expanding health insurance coverage was the use of premiums from the new CLASS Act entitlement that was established. The legislation begins collecting premiums for this insurance in 2015, but doesn’t begin paying out benefits until 2020 (conveniently, here in 2010, just outside of the CBO ten-year time horizon). The CBO ‘scoring’ of the legislation takes those first five years of premiums and diverts them to paying for its expansion of coverage. This diversion represents $70 billion of the offsets to the cost of the legislation. It assumes that when it becomes necessary to begin paying benefits in 2020, there will be other premiums from other Americans to cover the cost. When an insurance company in Tennessee …occasionally does this—collects insurance premiums and diverts them elsewhere, planning to pay claims later with other premiums—we shut them down.” (p. 37)

State Costs Increase, In “Worse” Financial Shape

• “States are being put in a box. Most are prohibited from borrowing money to balance budgets and Medicaid increasingly shoulders aside investments in other areas such as education and infrastructure. In Tennessee, Medicaid didn’t exist in 1965, and in 1981 its budget was about half of what we spent on K-12 education, it surpassed spending on K-12 in 1992, and by 2004 it was 2.25 times our K-12 budget. With the Affordable Care Act, it will get worse.” (p. 26)

Consolidation Will Increase Costs

• “As the dominance of a few large insurers in a market diminishes, more economic power accrues to providers, and especially large providers. Their ability to dictate rates and terms grows. Forcing competition and fragmentation among those paying for care while simultaneously encouraging cooperation and consolidation among providers will cause medical costs to go up, not down. Moreover, new constraints placed on the insurance industry in the name of reform hinder the insurers’ ability and incentive to innovate.” (p. 33)

• “The Affordable Care Act pushes the consolidation of hospitals and provider groups while disarming the purchasers. As this market power disparity between purchasers and providers grows, we can expect medical costs in many markets to go up at rates in excess of even the already high rate of health care inflation. This won’t be due to health care’s usual suspects of technology or overutilization, but just because of good old-fashioned monopoly market power.” (p. 34)

Government Will Grow

• “Government loves complexity, rules, and red tape, but we may have outdone ourselves this time. Reform offered a chance to clean up the baroque system we have created over the years, reduce bureaucracy, lower administrative cost, and give clarity and focus to a major part of where we spend our taxpayer’s money. Instead, we created yet more complexity, more regulations, and the need for more bureaucracy.” (p. 35)