Health Care: Not Close to Over
The fat lady hasn’t even started to warm up yet.
The narrow 220-215 victory in the House on Saturday night was a step forward on the road to a government takeover of the health care system. But as close and dramatic as that vote was, that was the easy part. The Senate must still pass its version of reform—which will not be the bill that just passed the House. Nancy Pelosi was, after all, able to lose the votes of 39 moderate Democrats. Harry Reid cannot afford to lose even one. A conference committee must reconcile the two vastly different versions. And then, Pelosi must hold together her 3 vote margin of victory (if it gets that far). Yet several House Democrats who voted for the bill on Saturday said they did so only to “advance the process.” Their vote is far from guaranteed on final passage. And, House liberals are almost certain to be disappointed by the more moderate bill that may emerge from the conference.
Among the more contentious issues:
Individual Mandate: This should’ve been low-hanging fruit. Democrats agreed on a mandate early in the process. But it became increasingly plain that a mandate would hit those with insurance as well as the uninsured — forcing people who are happy with their plan to switch to a different, possibly more expensive plan. With this mandate now being seen as a middle-class tax hike, qualms have developed. The House bill contains a strict mandate, with penalties of 2.5 percent of income backed up by up to five years in jail. The Senate Finance Committee, on the other hand, watered down the mandate’s penalties and delayed the mandates implementation.
Employer Mandate: The House bill also contains an employer mandate, a requirement that all but the smallest employers provide insurance to their workers or pay a penalty tax of up to 8 percent of payroll. The Senate, looking at unemployment rates over 10 percent, seems unlikely to include an employer mandate.
The Public Option: The House included, if not a “robust” public option, at least a semi-robust one. But moderate Democrats in the Senate are clearly not on board. Joe Lieberman (I-CT) says that he will join a Republican filibuster if the public option is included. Harry Reid is trying various permutations: a trigger, an opt-in, an opt-out. But as of now there is not 60 votes for any variation.
The Sheer Cost: Fiscal hawks like Sen. Evan Bayh (D-IN) say they will not support a bill that adds to the deficit or spends too much. But the house bill cost a minimum of $1.2 trillion.
Taxes: The House plan to add a surtax on incomes of $500,000 or more a year has no support in the Senate. At the same time, the Senate plan to slap a 40 percent excise tax on “Cadillac” insurance plans is unacceptable to key Democratic constituencies like labor unions.
Abortion: Conservative Democrats insisted on a strict prohibition on the use of government funds for abortion. The bill could not have passed without the inclusion of that provision. House liberal swallowed hard and voted for the bill, despite what they called “a poison pill” anyway with the expectation that it will be removed later. If the final bill includes the prohibition at least a couple liberals could defect. If it doesn’t, conservative Democrats won’t be on board.
Immigration: The Senate Finance Committee included a provision barring illegal immigrants from purchasing insurance through the government-run Exchange. The House Hispanic Caucus says that if that provision is in the final bill, they will vote against it.
As if these disagreements among Democrats wasn’t bad enough, public opinion is now turning against the bill.
President Obama has called for a bill to be on his desk before Christmas—the latest in a series of deadline that are so far unmet. It is hard to see how Congress can meet this one either. The Senate has not yet received CBO scoring of its bill and is not prepared to even begin debate until next week at the earliest. That debate will last 3-4 weeks minimum, assuming there are 60 votes for cloture. That means, the bill cant’ go to conference committee until mid-December, even if everything breaks the way Harry Reid wants. Privately, Democrats are now suggesting late January, before the State of the Union address, is the best they can do.
The fat lady can go back to sleep—this isn’t over yet.
The Myth of ‘Market Failure’ in Health Care
One argument in favor of a government overhaul of the health care system is that the free market had its chance, and failed when it comes to providing the best possible care. But as David Goldhill discovered while researching for the September cover article in The Atlantic, the United States has anything but a free-market health care system.
He explains his findings below:
For real market-based reform, see Cato’s new Policy Analysis, “Yes, Mr. President: A Free Market Can Fix Health Care.“
Can’t Achieve Public Option Without Deception
Speaker Pelosi is set to unveil a health care bill today including yet another version of the so-called public option. This one would let providers “negotiate” reimbursement rates with the government-run program.
That’s the health care equivalent of negotiating with Tony Soprano.
But regardless of how much lipstick they put on this pig, it still is a government takeover of the health care system that would all but eliminate private insurance and force millions of Americans into a government-run system. Apparently the House leadership has decided that if at first you can’t get the votes by being honest about your true intentions, lie, lie, again.
Filed under: General; Health, Welfare & Entitlements
Parsing Pelosi: House Health Takeover Would Cost around $2.25 Trillion
Just like the Senate Finance Committee’s government takeover, the House of Representatives’ government takeover hides more than half of its cost by pushing those costs off the government’s budget and onto the private sector.
So when Speaker Pelosi says the House bill would cost under $900 billion, what she actually means is that it would cost around $2.25 trillion.
Filed under: Cato Publications; General; Health, Welfare & Entitlements
“Keep Your Subsidies off My Ovaries”
In my recent Cato paper, “All the President’s Mandates: Compulsory Health Insurance Is a Government Takeover,” I explain that if Congress compels Americans to purchase health insurance, it would “inevitably and unnecessarily open a new front in the abortion debate, one where either side—and possibly both sides—could lose.”
Slate’s William Saletan explains how the pro-choice side could lose:
This week, the Senate finance committee is considering amendments that would bar coverage of abortions under federally subsidized health insurance. Pro-choice groups are up in arms. After all, says NARAL Pro-Choice America, “In the current insurance marketplace, private plans can choose whether to cover abortion care—and most do.” If Congress enacts subsidies that exclude abortion, “women could lose coverage for abortion care, even if their private health-insurance plan already covers it!“…
The argument these groups make is perfectly logical: If you standardize health insurance through federal subsidies and coverage requirements, people might lose benefits they used to enjoy in the private sector. But that’s more than an argument against excluding abortion. It’s an argument against health care reform altogether.
Saletan also explains why pro-life and pro-choice positions on Obama’s health plan are irreconcilable:
To get what they consider neutrality, pro-choicers have to make pro-lifers pay indirectly for abortions. And to keep what they consider clean hands, pro-lifers have to make abortion coverage federally unsupportable and therefore, in a subsidy-dependent system, commercially nonviable.
Rather than an argument against all health care reform, I’d say this is an argument against reforms that expand government subsidies or otherwise give government the power to choose what kind of insurance you purchase. Fortunately, there are better ways to reform health care.
Filed under: Cato Publications; General; Health, Welfare & Entitlements
Americans Don’t Want It
“Americans are more likely today than in the recent past to believe that government is taking on too much responsibility for solving the nation’s problems and is over-regulating business,” according to a new Gallup Poll.
New Gallup data show that 57% of Americans say the government is trying to do too many things that should be left to businesses and individuals, and 45% say there is too much government regulation of business. Both reflect the highest such readings in more than a decade.
Byron York of the Examiner notes:
The last time the number of people who believe government is doing too much hit 57 percent was in October 1994, shortly before voters threw Democrats out of power in both the House and Senate. It continued to rise after that, hitting 60 percent in December 1995, before settling down in the later Clinton and Bush years.
Also, the number of people who say there is too much government regulation of business and industry has reached its highest point since Gallup began asking the question in 1993.
That might give an ambitious administration pause. The independents who swung the elections in 2006 and 2008 clearly think things have gone too far. An administration as smart as Bill Clinton’s will take the hint and rein it in. Meanwhile, another recent poll, by the Associated Press and the National Constitution Center, shows that
Americans decidedly oppose the government’s efforts to save struggling companies by taking ownership stakes even if failure of the businesses would cost jobs and harm the economy, a new poll shows.
The Associated Press-National Constitution Center poll of views on the Constitution found little support for the idea that the government had to save AIG, the world’s largest insurer, mortgage giants Fannie Mae and Freddie Mac, and the iconic American company General Motors last year because they were too big to fail.
Just 38 percent of Americans favor government intervention – with 60 percent opposed – to keep a company in business to prevent harm to the economy. The number in favor drops to a third when jobs would be lost, without greater damage to the economy.
Similarly strong views showed up over whether the president should have more power at the expense of Congress and the courts, if doing so would help the economy. Three-fourths of Americans said no, up from two-thirds last year.
“It really does ratify how much Americans are against the federal government taking over private industry,” said Paul J. Lavrakas, a research psychologist and AP consultant who analyzed the results of the survey.
Note that 71 percent of the respondents opposed government takeovers, with 50 percent strongly opposed, before the “benefits” of such takeovers were presented.
President Obama is an eloquent spokesman for his agenda, and he has an excellent political team with a lot of outside allies to push it. But as the old advertising joke goes, you can have the best research and the best design and the best advertising for your dog food, but it won’t sell if the dogs don’t like it.
Rep. Tom Price on the Government Takeover
This video has gotten more than 1,000,000 views on YouTube. It deserves one more: yours.
Co-ops: A ‘Public Option’ By Another Name
Politico reports that the so-called “public option” provision could be dropped from the highly controversial health care bill currently being debated throughout the country:
President Barack Obama and his top aides are signaling that they’re prepared to drop a government insurance option from a final health-reform deal if that’s what’s needed to strike a compromise on Obama’s top legislative priority…. Obama and his aides continue to emphasize having some competitor to private insurers, perhaps nonprofit insurance cooperatives, but they are using stronger language to downplay the importance that it be a government plan.
As I have said before, establishing health insurance co-operatives is a poor alternative to the public option plan. Opponents of a government takeover of the health care system should not be fooled.
Government-run health care is government-run health care no matter what you call it.
The health care “co-op” approach now embraced by the Obama administration will still give the federal government control over one-sixth of the U.S. economy, with a government-appointed board, taxpayer funding, and with bureaucrats setting premiums, benefits, and operating rules.
Plus, it won’t be a true co-op, like rural electrical co-ops or your local health-food store — owned and controlled by its workers and the people who use its services. Under the government plan, the members wouldn’t choose its officers — the president would.
The real issue has never been the “public option” on its own. The issue is whether the government will take over the U.S. health care system, controlling many of our most important, personal, and private decisions. Even without a public option, the bills in Congress would make Americans pay higher taxes and higher premiums, while government bureaucrats determine what insurance benefits they must have and, ultimately, what care they can receive.
Obamacare was a bad idea with an explicit “public option.” It is still a bad idea without one.
Nader Supports Health Savings Accounts?
In a recent article Ralph Nader attacks several critics of Obama’s health care reform proposal, including Cato:
Now enters the well-insured libertarian Cato Institute with full-page ads in the Washington Post and The New York Times charging Obama with pursuing government-run health care. A picture of Uncle Sam pointing under the headline “Your New Doctor.” Nonsense. The well-insured people at Cato should know better than to declare that this “government takeover” would “reduce health care quality.”
I agree that Cato employees are “well-insured” – a description so appropriate that Nader used it twice in a single paragraph. At Cato we have Health Savings Accounts, which are probably the closest thing to free market health insurance allowed by law.
It’s nice to see Nader, a proponent of socialized medicine, praise HSAs. But it’s unfortunate that his preferred options for health care would abolish HSAs entirely.
Filed under: Government and Politics; Health, Welfare & Entitlements
Panic Starting to Set in Among Advocates of Government-Run Health Care
Until now the usual suspects hoping to win a government takeover of America’s health care system appeared to be confident of victory. No longer, however. Some of them, at least, are starting to notice the fact that health care “reform” will be incredibly expensive at a time when the U.S. government has no money. Indeed, the problem is not that the Treasury is empty. Rather, it is filled with IOUs for which foreign creditors, such as China, now worry about collecting on.
Writes Jonathan Cohn at the New Republic:
Attention fellow liberals who want health care reform: You are in danger of losing the fight for universal health insurance. And it’s not only–or even primarily–because of the public plan.
It’s because of the money.
Well, contrary to the belief of many on the Left, money does matter. As much as we all might wish, money does not grow on trees. And running the printing presses isn’t the panacea that some believe.
Cohn seems surprised that the Congressional Budget Estimate came in so high, but a complete bill almost certainly would cost even more. Thankfully, the government-takeover bandwagon has hit a large bump, and even larger barriers must be overcome for health care “reform” to triumph.
Filed under: Health, Welfare & Entitlements; Tax and Budget Policy
The Coburn-Burr-Ryan-Nunes Mandate-Price-Control Bill
Today, Senators Tom Coburn (R-OK) and Richard Burr (R-NC), along with Reps. Paul Ryan (R-WI) and Devin Nunes (R-CA) announced that they will introduce a health care reform bill. If my reading of the bill summary is correct, their bill would:
- Mandate that states create a new regulatory bureaucracy called a “State Health Insurance Exchange,”
- Mandate that all plans offered through those exchanges meet federal regulatory standards,
- Mandate “guaranteed issue” in those exchanges,
- Mandate “uniform and reliable measures by which to report quality and price information,”
- Impose price controls on those plans by prohibiting risk-rating,
- Launch a government takeover of the “insurance” part of health insurance, by means of a “risk-adjustment” program intended to cope with the problems created by price controls, and
- Fall just short of an individual mandate by setting up (mandating?) automatic enrollment in exchange plans at “places of employment, emergency rooms, the DMV, etc.” — essentially, trying to achieve universal coverage by nagging Americans to death.
Needless to say, I am troubled.
The bill summary is self-contradictory. On the one hand, it lists “No Tax Increases” as a core concept. Do its authors not know that imposing price controls on health insurance premiums imposes a tax on healthier-than-average consumers? And where do they think the money for “risk-adjustment” payments will come from? Heaven?
The bill sponsors seem to want to cement in place the monopoly regulation that currently exists at the state level — when they’re not encouraging Congress to take over that function. Have they abandoned their colleague Rep. John Shadegg’s (R-AZ) proposal to allow for competitive regulation of health insurance?
And if Massachusetts created an “exchange” on its own, why do other states need federal legislation?
The bill includes some ideas for which I have more sympathy, like its tax-credit proposal and expanding health savings accounts.
But the above provisions would sow the seeds of a government takeover of health care — so much so that The Washington Post’s Ezra Klein is salivating:
The word of the day is “convergence.” That — and that alone — is the definitive message of the conservative health reform alternative developed by Sens. Tom Coburn (Okla.) and Richard Burr (N.C.), as well as Rep. Paul Ryan (Wisc.). For now, some of the key provisions are about as clear as mud. The plan’s changes to the tax code, in particular, are impossible to discern. So I’ll do another post when I can get some clarity on those issues. The politics, however, are perfectly straightforward.
A superficial read of the Patients’ Choice Act — which I’ve uploaded here — would make you think you’re digging into a liberal bill. A fair chunk of the rhetoric is lifted straight from Sen. Ted Kennedy’s office. “It is time to publicly admit that the health care system in America is broken,” begins the document. “Health care is not a commodity in the traditional sense,” it continues. “States should provide direct oversight of health insurers to make sure they are playing by fair rules,” it demands. The way we pay private insurers in Medicare “wastes taxpayer dollars and lines the pockets of insurance executives,” it says. Elsewhere, it praises solutions that have worked in several European countries.”
And though it’s still too early to say how the policy fits together, it’s clear that many traditionally Democratic concepts have been embraced. To put it simply, the plan wants to encourage a version of the Massachusetts reforms — which it calls a “well-known, bi-partisan achievement of universal health care” — in every state. There are some differences, of course. The plan doesn’t have an individual mandate. It doesn’t have an obvious tax on employers. But it strongly endorses State Health Insurance Exchanges. And that, for Republicans, is a radical change in policy.
This idea — present in every Democratic proposal but absent in Arizona Sen.John McCain’s plan — would empower states to create heavily regulated marketplaces of insurers. The plans offered would have to “meet the same statutory standard used for the health benefits given to Members of Congress.” Cherrypicking would be discouraged through risk adjustment, which the PCA calls “a model that works in several European countries.” The government would automatically enroll individuals in plans whenever they interacted with a government agency and states would be able to join into regional cooperatives to increase the size of their risk pool.
In essence, Coburn, Burr, and Ryan are abandoning the individual market entirely. Like Democrats, they’re arguing that individuals cannot successfully navigate the insurance market, and they need the protection of government regulation and the bargaining power that comes from a large risk pool. This is literally the opposite approach from McCain, who attempted to unwind the employer-based insurance and encourage families to purchase health coverage on the individual market. The core elements of this plan, in other words, make it the same type of plan Democrats are offering. A plan that enlarges consumer buying pools rather than shrinks them. It’s pretty much exactly what I’d expect a Blue Dog Democrat to propose. And it’s further evidence that the argument over health reform is narrowing, rather than widening. And it’s narrowing in a direction that favors the Democrats.
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