China questions costs of U.S. healthcare reform

November 16, 2009

Guess what? It turns out the Chinese are kind of curious about how President Barack Obama’s healthcare reform plans would impact America’s huge fiscal deficit. Government officials are using his Asian trip as an opportunity to ask the White House questions. Detailed questions.

Boilerplate assurances that America won’t default on its debt or inflate the shortfall away are apparently not cutting it. Nor should they, when one owns nearly $2 trillion in assets denominated in the currency of a country about to double its national debt over the next decade.

Nothing happening in Washington today should give Beijing any comfort or confidence about what may happen tomorrow. Healthcare reform was originally promoted as a way to “bend the curve” on escalating entitlement costs, the major part of which is financing Medicare and Medicaid. That is looking more and more like an overpromised deliverable.

For instance, a new study from the U.S. government’s Centers for Medicare and Medicaid Services finds that the healthcare reform bill recently passed in the House of Representatives would increase healthcare spending to 21.3 percent of GDP by 2019 compared with 20.8 percent under current law. That’s bending the curve the wrong way. The study also questions the “long-term viability” of the $500 billion in Medicare cuts meant to help pay for expanded insurance coverage.

In addition, the CMS study gives a clearer cost estimate than the one provided by the Congressional Budget Office. According to the CBO, the 10-year cost of PelosiCare is $894 billion. But that analysis includes early years with little government spending, According to the CMS, the House approach would cost $1 trillion from 2013-2019, or some $140 billion a year when fully put into effect.

Few realists in Washington think any of the current reform plans make a significant dent in the long-term healthcare cost to government. Indeed, the Senate Budget Committee recently held hearing about creating a bipartisan commission to find solutions to America’s entitlements problems.

If healthcare reform really bent the curve, there would be a no need for such a commission to do Healthcare Reform 2.0.

The Chinese might want to keep up the questioning.


We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see

Right on Chinese! You can ask. The Dems in congress are just drrnking cool-aid and voting yes. No questions asked, not even contemplated. The US Press also is so awed by the Chairman from Hawaii or Kenia that they are blind and grin dumb all day long. Watch the marionettes on CNN and one’s stomach turns.

Posted by John J Feller | Report as abusive

Obama’s collecting email adresses, better watch out what you say!

Posted by kevtop351 | Report as abusive

how priceless that the chinese are not satisified with obama’s magical charm and reassurances — regarding his obamacare monstrosity — when a good chunk of americans are perfectly satisfied with obama & co’s gibberish! i just love it. does this wake up any lefties and liberals out there? no effing way.i’ll bet obama is stunned that the chinese are pressing him for real explanations. after all, these guys crafted maoism that obama surely worships on the level of a religion and they’re basically saying to obama, “WTF, dude?!”it’s pure poetry. too bad we’re all screwed…

Posted by HOWARD | Report as abusive

I am so tired of reading posts from liberals that call the American public that doesn’t support this administration’s version of Healthcare reform idiots. You really have to grasp a better understanding of what the current Bill proposed is NOT going to fix! The reality is that most people want healthcare reform. However, what those of you that will support whatever nonsense that comes out of Washington just because you believe whatever nonsense the media and the government tell you about anything fail to understand is that this bill is not reforming the very things that need reforming. This bill is not approaching the very things that are causing our healthcare insurance (by the way insurance is NOT healthcare, it is a vehicle of obtaining healthcare at reduced costs) to go up. This is what we need Healthcare reform to look like and it IS NOT what Washington is giving us at this time: Special insurance plans subsidized by the government for individuals that are considered uninsurable (pre-ex conditions such as cancer, diabetes and other costly conditions); government subsidized insurance plans for low income individuals and families that cannot afford insurance (Medicaid); a revision of our State Insurance Laws (government written by the way!) that are the obstacles to allowing insurance to become competitive over State lines and within the State – lack of competition causes too few carriers to share the burden of loss in most areas, thereby increasing the cost of premiums; Tort Reform (without this, costs will continue to rise because malpractice insurance rates are outrageous due to not having tort reform…the average anesthesiologist pays over $1M per YEAR in premiums!!!); and, lastly we need to keep the private companies – the professionals that already run one of the World’s greatest healthcare systems in place rather than having any government administered system. The currently proposed Healthcare reform is not true healthcare reform at all and does NOT approach the very things that matter most for all of us. What our government is trying to pass is one of the biggest bureaucratic systems of Government RUN healthcare that most people will not want or like. Most people enjoy picking their doctors, making their own appointments, having consultations to discuss treatment options, etc… HMO’s are not well liked in this Country – the Government run debacle will be worse than any HMO any of us have ever heard about.People…insist on REAL Healthcare INSURANCE Reform…not Healthcare SYSTEM reform…there is a huge difference.

Posted by Elizabeth Parrillo | Report as abusive

btw – i noticed all of the “greedy corporations” comments posted all over this thread. i love big, greedy corporations. i’ve worked in them my entire career starting out as a co-op student for gm back in ’82. i’ve experienced nothing less than a steady climb in income and satisfying career leaps ever since; year after year, decade after decade. capitalism birthed big, greedy corporations and i think it’s great. but now, after years of leftie-liberal tinkering with the big corporate capitalist machine, it’s finally been bastardized and weakened and slips to it’s knees, and those who intentionally weakened it, now jump up and exclaim, “capitalism has failed!”.let’s heal capitalism — and the big greedy corporations will begin gushing prosperity to people like me again — by limiting government regulation and taxation and putting commerce above the false-religion of environmentalism!screw socialism. to hell with communism. down with expanding governments and regulations that will literally tax us to death. hell, even the damn chinese red menace know this is the solution.

Posted by HOWARD | Report as abusive

carl and allencorrections corporation of america did have a contract with bay county – but CCA exercised their option to terminate the agreement as they were oerating at a loss because they had to fund the operation of the exisitng ja=ial an dpay for the costruction of the new one. CCA runs jails all over the country – the situation in Bay county is one anecdotal episode and does not reflect the industry nationwide

Posted by carol | Report as abusive

Elizabeth Parrillo – the lefties know that this healthcare crap, and all of obama’s other initiatives, have and will bring about a calamity. it’s what they want, what they yearn for. they have an inexplicable fantasy-based hatred of the US and everything GOOD it has accomplished! they hate it and want to see ANYTHING tear it down and they believe that somehow, magically, some utopia will spring forth from the bloodiest death of a nation the world will ever see. they really believe, save your breath in asking the left to understand how the reality of obamacare will be catastrophic… they know.

Posted by HOWARD | Report as abusive

I agree with the opinion of imgibson, and that is exactly the truthful and realistic assessment I share. Some of you curelessly blame the government, and forgetting the government is partly the embodiment of us the people and the exercise of our civil liberties in place. The government is also not a competing business or enterprise engaging in profits. Instead a regulatory constituted establishment of the people. Our government is also not the dictatorial system but a democratically elected. Lack of knowledge is sadly enabling some of the knowledgeable to brainwash, indoctrinate and spread falsehood to haunt and placate fear mongering in the past 8 years and continuing. Some of the elected greedy legislators have corrupted the loopholes of the failed system deliberately and fiercely defending the failed status quo that has sent this country into its current struggling status. They are to blame but yet some of us are confused and not learning, but allowing their weaknesses to be further brainwashed. They hate the new form of prescriptions because we the ailing public appear to be immune with the side effects of the failed prescriptions. The change is here.

Posted by Nana Egyir | Report as abusive

nana – “enabling some of the knowledgeable to brainwash, indoctrinate and spread falsehood to haunt and placate fear mongering”yes, that would be people like you…

Posted by HOWARD | Report as abusive

In case you didn’t know:China has been and continues to be “asked” to help pay for the debt incurred by the United States. Since China and United States do so much business, China has given a lot of their money to the United States only to see later that the US government, with it’s current policies, is headed towards inflation. Thus the US dollar because less worthy and the Chinese end up losing big because of the debt they paid to the US. The current Chinese government is not stupid. However I’d say they made a mistake for loaning the money to the US without first seeing how the new government under Obama is doing.

Posted by marina falls | Report as abusive

Boy is it interesting that the U.S. Government is willing to answer the Chinese government more readily and more candidly than it is willing to answer the American people. Healthcare needs serious reform — but this bill is the absolutely wrong answer… I don’t know about anyone else, but I do not want Lawyers or the government anywhere near the delivery of my healthcare unless I have been mistreated.This bill puts the government in charge — which means that if anything does go wrong I will have no where else to turn. This is a hugely BAD idea.

Posted by kevin | Report as abusive

Hey imgibson. Are you a total idiot? Insurance companies make between 2 and 6% profit, not exactly what O’Bummer lies and tells you and you believe. Why in the world would you want Nancy Pelosi and other GREEDY politicians telling you what you can and can’t have medically? O’Bummer’s only concern is keeping the SEIU union people happy, 2.2 million out of 300 million Americans. Wake up and smell the coffee.

Posted by Regor | Report as abusive

Hey Nana Egyir. Your post is pathetically incoherent. You write, “Some of you curelessly blame the government, and forgetting the government is partly the embodiment of us the people and the exercise of our civil liberties in place.”What the hell does that sentence mean? You are one confused person. Many politicians, starting with Broke O’Bummer are in it for the power and the control over WE the people. They don’t have our best interests at heart, only getting re-elected so they can continue to expand their power and influence as we go into the toilet of Socialism.

Posted by Regor | Report as abusive

As an American citizen and patriot , I just want to tell you chinese I default on my portion of the debt. I expec t you to immediately remove all the Walmarts from my vicinity and get all the fat and unhealthy people who intentionally ate and consumed every possible copmbination of unhealthy and poisonous foods and vapors and please take them all back to china with you so I dont have to look or feed or take care of them. As I said I default, I will never ever pay you chinese one single penny for stolen money and so called debt for this stolen government that directly contradicts my wishes, views, morals, and does not represent me in any way.

Posted by howardhofelich | Report as abusive

Regor,Remember we exercised our civil liberty to elect our government every 4 years. You need to learn and study government.

Posted by Nana Egyir | Report as abusive

You want good medical care? Let me go to medical school… without blocking me because I am a middle class white male. Thats right, the reason medical care is so costly is that my government intentionally prevented me from going to medical school because they used the race and sex card to keep me out. Anybody can be a good doctor now aday with a laptop and common sense. But my country decided to change the demographics and unfairly alter the distribution of wealth and ambition and forced women and blacks and mexicans into the demographics so we all go down the debt drain equally incompetent and broke. Let the white maqle rule supreme and we will not have ANY problems, we got you ehre over 400 years of proven scientitifcd achievement , now my governemtn is stolen and takes my freedom and my good life away by its unfair capricious actions and enriches chinese simian barbarians.

Posted by howardhofelich | Report as abusive

145 years ago we called one segment of society forced to labor for the benefit of another segment of society,…here it comes….SLAVERY. The tax paying segment of this country are being forced to labor to support the non-paying segment. This abomination that passed the House will make every working American a slave to the ever expanding federal gubmint.There are other ways to solve the inadequacies of our health care without turning it upside down and enslaving the producers.

Posted by Dale in NJ | Report as abusive

Instead of using free enterprise and common sense modifications to the current system, let’s come up with something new that Uncle Sam can run. Now, who can we trust in Washington that only has our best interest in mind and won’t be swayed by politics. Any ideas?

Posted by Sam H | Report as abusive

I hope the next government gives me remedy, make it stand out in the history books..make the left cower and destroy it

Posted by howardhofelich | Report as abusive

The most wasteful part of the US government is the military. It pays $400 per gallon for gasoline in Afghanistan and each soldier there costs $1 million per year. We all remember their $400 toilet seats and $500 hammers. The military spends as much in every year as providing universal healthcare for all Americans would cost for 10 years.OTOH, Medicare and Medicaid have an overhead of something like 2% while private insurers do a lousy job and still get over 30% overhead.As inept and inefficient as our civilian government is, private industry is usually 100 times worse. At least graft, corruption and many bad practices are illegal in the government while in major corporations it’s the norm.

Posted by TomDC | Report as abusive

What sam said^, but kennedy is dead so i guess we are out of luck.

Posted by Fred H | Report as abusive

Madoff was caught because he could not get the money to run his ponzi scheme. The US was almost caught but unlike Madoff, the US can print money. So the Chinese is very suspicious that we are running a ponzi scheme here.

Posted by Tim | Report as abusive

The most wasteful part of the US government is the military. It pays $400 per gallon for gasoline in Afghanistan and each soldier there costs $1 million per year. We all remember their $400 toilet seats and $500 hammers. The military spends as much in every year as providing universal healthcare for all Americans would cost for 10 years.===Recite old tired stories all you want. Social Security and Medicare are twice the annual military budget. The $400 toilet seat, wasn’t. Your numbers are bullshit.  /learn/budget/federal-budget-pie-charts ===OTOH, Medicare and Medicaid have an overhead of something like 2% while private insurers do a lousy job and still get over 30% overhead.===Again, BS. The true overhead of Medicare and Medicaid does not INCLUDE administration costs. If you added the bloated government bureaucracy required to run them, they would far exceed the cost of private-run overhead.===As inept and inefficient as our civilian government is, private industry is usually 100 times worse. At least graft, corruption and many bad practices are illegal in the government while in major corporations it’s the norm.===And 47% of all statistics like the above are made up on the spot.Silver Sumo

Posted by Silver Sumo | Report as abusive

China vs Health reform $$$$ down

Posted by | Report as abusive

Read China Drudge

Posted by herbert | Report as abusive

It seems that China and the oligarchy that rule the US do not think the poor citizens of the US are worthy of healthcare. What a surprise.

Posted by ereilad | Report as abusive

The CCA was suppose to maintain and provide facilities necessary to operate a jail and house prisioners. They failed to maintain the facilities and after a state inspection the counry was ordered to bring the facilities back to the standards required by state law. CCA refused to do this and gave the jail back to the county. The sheriff did in fact operate the jail for less costs than CCA as I stated in my first comment.China and our debt holders should be afraid that the USA and our currency could flounder in coming years. China is reported to hold 1.2 trillion of their reserves in US Dollars and an additional 800 billion in US Government Securties (us debt bonds). If the dollar does lose value the Chinese will also lose in the value of their holdings and this could be in the billions. They do have a vested interests in what we (as their debtor) with our spending.I will make a challange to any readers whether EGGHEAD, WINGNUT or in the middle read this and give me you feedback.Are You Ready for the Next Crisis? 009/11/are-you-ready-for-next-crisis.htm lI did not write it but find it important enough to post it on my blog.

it’s amazing that after reading more than 300 comments, but not one of them questions about the source of this article.Yes, James Pethokoukis make a good argument that China may worry the US debt. However, there is not any information about China is questioning US healthcare reform. Where???? Where is the source????We really should identify the differences between commentary and new reporting.

Posted by Simon | Report as abusive

Perhaps I’m older than many screaming about health care and I don’t disagree that change is needed. I just think we’re going about it the wrong way.I remember when insurance covered emergency rooms and hospital stays and later added prescription coverage. Doctors often dispensed prescriptions directly from their office and there were no “latest drug” samples handed out.Doctors didn’t hire employees just to file insurance forms by the thousands and insurance companies didn’t dictate the medical treatment of patients.Now, many useful drugs easily available in other countries are prescription only in the US – driving up the cost and necessitating doctor visits for simple infections and minor complaints.The insurance industry is full of middle men dicating medications, setting co-pays, generating more and more paperwork. Pharmaceutical companies charge prices that have no relationship to the cost of producing many medications. The patient is at the bottom of the heap, doctors incomes are crippled by liability insurance because our society must have someone to blame for every death or error and money must be awarded.Yes, we need change but we don’t need more levels of middle men and government added – we need to get back to the basics of health care instead of trying to provide for every single medical need of everyone.

The Chinese are not stupid. They know that no government program ever costs what the politicians tell us it will. If we are being told 1.5 trillion over 10 years, then you can pretty much count on the true cost being 3-4 trillion MINIMUM. That means that the funding methods being proposed will NOT cover it and the shortfall will have to come from somewhere, which means higher taxes, and not just on the rich, OR the government will have to print more money. The two major impacts on China are that if taxes go up, Americans have less money to spend on Chinese goods so their exports fall. Also, if the government has to print money every year to cover the shortfall not raised by taxes, the Chinese debt will be repaid in inflated dollars so the Chinese will get their money back with interest but the money won’t be worth as much as the money they lent us so they could end up losing if inflation runs higher than the interest rate on the bonds.To the person below who asks why should we trust corporations with our healthcare, I ask this. Why should we trust the government? Government healthcare hasn’t worked in any country where it’s been tried so far. Try asking a native American about government healthcare sometime. The money always seems to run out about 4 months short of the end of the calendar year, so they all hope that nobody gets sick or injured during those months because they know they won’t get care until next years funding comes in. They are also proposing cuts to Medicare at a time when we are about to have a boom in the number of Medicare recipients. I hope you can live with yourself knowing that your government healthcare is being given to you at the expense of the most vulnerable in our society, the disabled and the elderly. You might be able to live with that, but I can’t and neither can anyone with a conscience.Government healthcare is nothing but a tax and a scam. When you are born, the government places a value on your life. If you need a little healthcare now and then while you are still young and healthy they give it to you because it costs them little compared to what they collect from you in taxes but over time the value of your life diminishes and the government becomes more and more reluctant to pay. That’s how it works in socialist countries. When the cost of your treatment or medication exceeds the value the government places on your future contributions to society, they allow you to linger in pain or die. At least with an insurance company, if they refuse to cover something or drop your policy you can sue them and maybe win and get your condition covered. With the government plan, you won’t be able to sue anybody to get something covered once you’ve been refused.

Posted by Joe | Report as abusive

Everyone reading the comments needs to look up and research the CLOWARD-PIVEN STRATEGY. After you have read up on it, ask yourself if the current leadership is creating a Healthcare Crisis where NONE exists to implement this strategy. I believe that is exactly what is happening and the whole country will follow the path of New York City in 1975!We have mortgaged our nation to the Chinese. With weakling Obambi in the White House, be prepared to cow-tow to every whim of the Communist government. If China demands payment, What are we going to do? give them California???Look it up – CLOWARD-PIVEN STRATEGY.

Posted by Darrell B | Report as abusive

I never thought I would see the United States become subserviant to the Chinese. With all the debt that China owns and more to come, they will be able to hold it over our heads to make us do what they want.The Obama administration is pushing our nation over the cliff and it’s all intentional!The radical socialists are now in control and will ruin this great nation to achieve their goals of making the U.S. a socialist nation. It is a nightmare that we will not be able to wake up from!

Posted by George Blanas | Report as abusive

As a Canadian who works within healthcare, I’m amused with the scare-mongering from seemingly rational Americans.Except for the very rich, some overpaid practitioners and medical corporations, there is no downside.Even the rich will eventually understand that a healthy and secure middle-class is very good for business. If you don’t believe this, check-out Canada’s economy. We rock!

Posted by Pierre Canuck | Report as abusive

By “idiotic American public” as you put it, you aren’t including yourself in that put down are you?Aren’t you an American and also part of the public?If you aren’t, then who the hell are you to throw stones if it does not include you?

Posted by EVAN | Report as abusive

I went most of my life without any health insurance other than accident coverage on my car. I had to be careful how I ate, how I cared for myself if i got a cold or the flu because I knew nothing else was available to me. Later after I was in my fifties I discovered some health care was available to me from the VA ( I was in the Navy during VietNam war and was was given a medel that gave me some healthcare) and so the last few years I have seen VA doctors. I sometimes wonder if tests that might be given by other doctors are not being done by the VA. I have been diagnosed as having a bad valve in my heart and have had tests to verify this problem. I am no longer insurable so if VA changes their rules I could be without any insurance and could not ever get it again except Medicare after age 65. Just curious any other folks here use VA health care and what is your experience?

Posted by goodguy222 | Report as abusive

will you please actually do some reading before you bitch about corporate profits? do you even know an inusrance companys margins? do you have any idea whats in the health care bills or know the fact that itll raise costs not lower them (from the CBO)

Posted by JD | Report as abusive

Obama and Nazi Pelosi will not listen to the American public, at least the 75% who know this cannot turn out well. The other 25% of progressive liberals don’t really matter since their living in Pelosi’s dream world and don’t know the meaning of the word defecit let alone how to spell it. Our only hope now is that the Chinese will take away their credit card and force them to start living within their means, like the rest of America has to. I wonder if Whoopy would consider what the Democrats are doing to America as “rape rape” or only just rape?

Posted by NoMarxist | Report as abusive

Chuck Colson discusses the same subject on, today. It’s ironic that a communist nation is concerned how we can afford national health care. Of course, their concern is how are we going to meet our bond obligations.I am surprised that no politician has questioned how we are going to pay for our own defense. This huge debt makes us beholden to the bond holders and most of it is held by our enemies. So, if they call in their notes how are we going to pay for weapons and munitions. These liberals pushing health care are no better than saboteurs. What our enemies are proving is that you don’t need huge armies or navies to conquer America. All you need to do is loan the U.S. government all the money it wants for social reengineering, and then call in the debt.

Posted by Irv Happel | Report as abusive

Statics in Texas indicate that 50% of drivers in the southern part of this state are driving without auto insurance. Won’t they be required to buy into this plan? Will they be able to afford it? Those of us who don’t/won’t are threatened with fines and/or jail time. Will there be enough prisons to hold all of us?

Posted by Rebel | Report as abusive

imgibson: Would you mind sharing one government sponsored success story? I work for a government beurocracy and the government is the last organization that I would trust to be in control of health care.

Posted by J Noonan | Report as abusive

What about this:Americans by the millions just stop buying the huge amount of Chinese goods that we now buy impulsively, and say to the Federal government: we want to pay off this debt. Let’s pull together and pay it off.Tort reform, higher deductibles, shopping for insurance across state lines; we want to pay for our own health care.Wouldn’t it be like waking up from a bad dream?

Posted by Ruth | Report as abusive

This whole health care issue is getting way out of hand….the government should get the hell out of private business and leave it to the private sector. It has been proven time and time agian that the private sector can deal with issues such as this in a much more efficient and effective way than the government ever has a hope of doing. IMPEACH OBAMA and PELOSI!!!!!

Posted by Traveler220 | Report as abusive

For those who seem to have such a difficult time understanding how the free market works, try this. Adam Smith wrote “Wealth of Nations” to describe HOW natural, free market forces worked. He didn’t construct a system, he simply described what he saw happening in REAL LIFE. Unlike the contrived socialist, share the wealth, government interventionism that is communism: a man-made contrivance that has yet to function in the REAL WORLD. Moral relativist foolishness that seeks to create “reality” out of one’s own ignorant opinions, is a sure-fire road to disaster. Just ask the CHI-COMS, who are turning from communism to capitalism because it actually works. The profit motive is not a contrivance, but simply a description of reality in action.

Posted by NCMike | Report as abusive

That is like saying that we shouldn’t trust BMW to make cars because their only motive is profit. The fact that these “greedy corporations” have to provide a service to make money is a good thing. The reason we have many of our current problems are because we have allowed government to meddle in the affairs of the so called greedy corporations already. Government having zero stake in the outcome works two ways, some are good but some are not so good. All of these points are irrelevant anyway because this government that you are trusting to run health care is already bankrupt. This is like discussing the new 1 million dollar house that I am going to buy tomorrow when I make 75K per year.

Posted by bmiller | Report as abusive

The previous posters’ comments are pure drivel and straight out of the DNC playbook – pure “talking points”. Completely nonsensical and completely inaccurate would be a correct way to characterize them. I would gladly debate each point raised, as each point mentioned was inaccurate. Obviously posted by a left-wing Democrat.

Posted by Rick Foster | Report as abusive

The Obamessiah’s Chinese master is speaking and he better listen! They don’t want this garbage either!

Posted by MainStMonkey | Report as abusive

For imgibson: Read, Atlas Shrugged, by Ayn Rand.

Posted by Don | Report as abusive

When insurance companies raise rates you shop around.What happens when the government realizes it will need to raise rates?

I’m glad the Chinese are awake and paying attention! These are the same questions many of us have been asking but Barry, Queen Nancy and King Harry won’t listen. They hell-bent on rarmming their agenda down our throats. Now that the Chinese control our purse strings (thanks to Obozo), they can question. I hope they pull the plug on this government takeover. We can ‘fix’ healthcare (investigate all the fraud), and not turn it into another failed government program that will only balloon in size, like every other government program. It’s sad when we have to look to China to save us from this fraud, lying administration.

Posted by Anne | Report as abusive

Now this might sound strange but think about it.Give every social security number holder one hundred thousand dollars free and clear, except for those that are in congress.This will reawaken the economy and cost a lot less than the current stimulation program and it would work. It is after all our money why not?

Posted by Mutantone | Report as abusive