Financial Tricks, the Deficit and the Health Care Bill

President Obama made one unshakable pledge about the health care bill. As the debate began, he said last fall, "I will not sign a plan that adds one dime to our deficits -- either now or in the future. I will not sign it if it adds one dime to the deficit, now or in the future, period.

But it took some financial tricks to keep that pledge.

For instance, the bill originally included money to prevent Medicare doctors from suffering a scheduled 21 percent cut in fees. But it cost too much -- $275 billion.

So John Graham of the Pacific Research Institute says "the way they solved that is that they simply pulled out the deficit increase in the bill, which was the so called Medicare doc fix.

And former Director of the Congressional Budget Office, Doug Holtz Eakin, adds "It turns out it's very very expensive. That's a pretty hefty price tag and not shockingly, they kept it completely out of health care reform, choosing to ignore this big bill."

Congress won't ever let the fee cut take effect because seniors would be outraged.

And the cost of the $275 billion "doc fix" eclipses the projected savings in the law-- about $140 billion -- meaning the that alone would push the cost of the health care law $135 billion dollars into the red, breaking the President's pledge.

But that wasn't the only financial shortcut. The law added dozens of other things, but Congress did not appropriate a single dollar to pay for them.

For instance, the IRS will have massive new responsibilities. "It's going to have to hire many many thousands of bureaucrats in the Internal Revenue Service, says John Graham, to determine whether you should be fined because you don't have appropriate health coverage."

The IRS would also have to determine who qualifies for subsidies and how much, which is all based on one's income.

The Congressional Budget Office says paying for all the things Congress passed but didn't fund would add as much as another $115 billion to the deficit-- driving the total red ink up to $250 billion over the first 10 years.

"They say very clearly that the bill did not change the basic growth rate of national health care expenditure," says Holtz Eakin. "So we've got one of the key principles of health care reform, which is that it should provide same care at lower cost nowhere in sight."

But Jim Kessler of the moderate democratic think tank "Third Way" says we do get something for all that

" You have to remember there are 30 million more people who are insured at that point."

And that drives up national health expenditures, according to government officials. In fact, total National Health Care Expenditures will actually increase by $310 billion by 2019.

Another factor is that the baby boomers are getting older and using more health care.

So more people will get more coverage but that too threatens to add to the deficit.

"The cost per capita of health care coverage in the United States will drop, but more will be covered by Washington than in the past," says Jim Kessler, "because we're insuring people that in the past just didn't pay their bills."

And the non-partisan Congressional Budget Office says all that will increase increase federal spending in the next 10 years and for most of the following decade.

Lawmakers are still arguing over whether the health care law will improve health care or make it worse. But it seems clear it will not reduce spending --either for the nation or the federal government.