The Pelosi Bill’s High Water Mark
Democrats are having difficulty corralling 218 votes for the Pelosi bill because Americans do not want government to be as big and as powerful as the House leadership does. Pro-life Democrats do not want a government so big that it can force taxpayers to fund abortions. Pro-choice Democrats do not want a government so big that it uses subsidies to restrict access to abortion coverage. Other Democrats don’t want a government so big that it turns the United States into a welfare magnet.
The American people don’t want the Democrats’ approach to health care generally. The more time the public has to digest ObamaCare, the more they dislike it:
And the Pelosi bill is the most expensive and extreme version of ObamaCare. Opposition will climb higher when the public learns the bill costs some $1.5 trillion more than Democrats claim.
Even a majority vote would not necessarily indicate majority support for the Pelosi bill. Rep. Jim Cooper (TN) and other Democrats are voting aye only because they want to keep the process moving – i.e., because this isn’t the vote that counts.
Win or lose, tonight’s vote will be the high water mark for the Pelosi bill.
(Cross-posted at Politico’s Health Care Arena.)
Filed under: General; Health, Welfare & Entitlements
Are Savvier Democrats Playing Rope-a-Dope?
Let’s simplify things and say there are essentially two parts to the health care bills moving through Congress: an individual mandate that would effectively nationalize health care, and a government-run program that would explicitly nationalize it slowly, over time.
One explanation for Majority Leader Harry Reid (D-NV) including the government-run program — supporters call it a “public option”; I prefer Fannie Med — in the Senate bill is that Fannie Med’s popularity is on the rise. Another explanation is that Reid had to include it to remain majority leader and get left-wing Nevadans to work for his re-election.
But a third explanation, not inconsistent with the others, is that the savvier Democrats know that all they need to nationalize health care is an individual mandate. So they’ll let Fannie Med take a beating, and then pass the more sweeping individual mandate when opponents are too exhausted and distracted by their “victory” over Fannie Med to notice.
(Cross-posted at Politico’s Health Care Arena.)
State ‘Opt-Out’ Proposal: a Ruse within a Ruse
President Obama and his congressional allies want to create yet another government-run health insurance program (call it Fannie Med) to cover yet another segment of the American public (the non-elderly non-poor).
The whole idea that Fannie Med would be an “option” is a ruse.
Like the three “public options” we’ve already got – Medicare, Medicaid, and the State Children’s Health Insurance Program – Fannie Med would drag down the quality of care for publicly and privately insured patients alike. Yet despite offering an inferior product, Fannie Med would still drive private insurers out of business because it would exploit implicit and explicit government subsidies. Pretty soon, Fannie Med will be the only game in town – just ask its architect, Jacob Hacker.
Now the question before us is, “Should we allow states to opt out of Fannie Med?” It seems a good idea: if Fannie Med turns out to be a nightmare, states could avoid it.
But the state opt-out proposal is a ruse within a ruse.
Taxpayers in every state will have to subsidize Fannie Med, either implicitly or explicitly. What state official will say, “I don’t care if my constituents are subsidizing Fannie Med, I’m not going to let my constituents get their money back”? State officials are obsessed with maximizing their share of federal dollars. Voters will crucify officials who opt out. Fannie Med supporters know that. They’re counting on it.
A state opt-out provision does not make Fannie Med any more moderate. It is not a concession. It is merely the latest entreaty from the Spider to the Fly.
(Cross-posted at National Journal’s Health Care Experts blog.)
Filed under: Cato Publications; General; Health, Welfare & Entitlements
To Make Health Care Affordable, Don’t Add Regulations — Repeal Them
David Freddoso of the Washington Examiner reveals how the monopolies that states enjoy over licensing doctors, nurses, and other clinicians reduce access to care for low-income Americans:
Stan Brock just wants to help. The former co-star of “Wild Kingdom” wants to deliver free medical, dental and vision care to the poor. Whereas most politicians talk about “bending the cost curve” in health care, Brock simply wants to break it – to provide care free of charge, at the hands of unpaid volunteer doctors and dentists using donated equipment.
Brock’s group, Remote Area Medical, wants to bring its services to Washington, and soon. He wants his volunteer eye doctors to grind new glasses on the spot for those having trouble seeing.
He wants his dentists to pull rotten teeth and perform root canals in badly neglected mouths. He wants to give checkups and HIV tests to the uninsured and the underinsured. No questions asked.
The only question is whether the bureaucrats will let him do it.
That sounds like hyperbole. It’s not. Read the whole thing (it’s short) and you’ll learn how in-state clinicians shamelessly use monopolistic licensing laws to protect themselves from competition — even at the cost of denying medical care to poor people.
Yesterday, Cato released a study where I advocate breaking up the state’s licensing monopolies and making state-issued licenses portable. Such a law would completely solve Remote Area Medical’s problem.
This Cato study by economist Shirley Svorny reveals how clinician licensing laws do more harm than good.
(Cross-posted at Cato@Liberty Politico’s Health Care Arena.)
Filed under: Cato Publications; General; Health, Welfare & Entitlements
Wednesday Links
- Senate Judiciary Committee abandons hope of bringing any real change to the Patriot Act. Julian Sanchez in The Nation: “The Obama administration makes vague, reassuring noises about constraining executive power and protecting civil liberties, but then merrily adopts whatever appalling policy George W. Bush put in place.”
- Cognitive Dissonance: New poll shows rising support for a so-called public option in health care, even as the public continues to oppose greater government control over the health care system.
- It has been tried before: Why increasing the size of government won’t work.
- Podcast: The real problem with American health care: You are not the customer. More here.
Universal Coverage Means ‘Willing to Let You Die Sooner’
I cannot disagree with Uwe Reinhardt’s response to my previous post at National Journal’s Health Care Experts blog. But his response bears clarification and emphasis.
Improving “population health” generally means “helping people live longer.”
To paraphrase, Reinhardt then writes:
If helping people live longer were our objective in health reform, we could do better than universal coverage. But health reform is not (solely or primarily) about helping people live longer. It is (also or primarily) about other things, like relieving the anxiety of the uninsured.
I applaud Reinhardt for acknowledging a reality that most advocates of universal coverage avoid: that universal coverage is not solely or primarily about improving health.
Will Reinhardt go further and acknowledge that, since universal coverage is largely about some other X-factor(s), that necessarily means that advocates of universal coverage are willing to let some people die sooner in order to serve that X-factor?
(Cross-posted at National Journal’s Health Care Experts blog.)
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
Should Congress Even Try to Achieve Universal Coverage?
If the goal is to improve health, then the answer is clearly no.
Ironically, even though universal coverage is presumably about helping the sick, the Democrats’ pursuit of universal coverage demonstrates not how much, but how little they care about their neighbors’ health.
Economists Helen Levy and David Meltzer explain, in a book published by the Urban Institute, “There is no evidence at this time that money aimed at improving health would be better spent on expanding insurance coverage than on…other possibilities,” such as clinics, hypertension screening, nutrition campaigns, or even education. In the Annual Review of Public Health, they explain further:
The central question of how health insurance affects health, for whom it matters, and how much, remains largely unanswered at the level of detail needed to inform policy decisions…Understanding the magnitude of health benefits associated with insurance is not just an academic exercise…it is crucial to ensuring that the benefits of a given amount of public spending on health are maximized.
If Democrats were serious about improving health, they would first gather evidence about which of those strategies produces the most health per dollar spent. (As I recommend elsewhere, the $1.1 billion Congress allocated for comparative-effectiveness research should just about do the trick.) Democrats would then fund the most cost-effective strategies, which may or may not include broader insurance coverage.
But the fact that Democrats are pursuing universal coverage without any such evidence necessarily means that they are willing to sacrifice potentially greater health improvements to achieve…whatever else they hope universal coverage will achieve.
Universal coverage is not about improving public health. It is about subordinating health to some X-factor that supporters value even more.
Which leads to an even more intriguing question: what is that X-factor?
Financial security? (If so, would universal coverage achieve that? Or are there better strategies?) Political power? Dependence on government? Industry subsidies? The appearance of compassion?
I’d like to see that question put to the group.
(Cross-posted at National Journal’s Health Care Experts Blog.)
ACORN and Health Care
Last week, editors at Politico posed two questions to an online panel to which I contribute: “ACORN: Underplayed or overblown?” and “Will the Dems ever get their act together on healthcare?”
The two are intimately connected by a simple proposition: “Most people want more housing and health care than they can afford.” Of course, for “housing” or “health care” one could substitute whatever one wishes: food, clothing, cars, education, entertainment, vacations, you name it. Economists call this the problem of scarcity, and it’s the beginning of economics.
In a free society, most individuals, families, and firms will deal with that problem through such homely measures as creating and husbanding wealth, planning for the future, and living within their means. Some, however, will be indifferent to such discipline and will demand more than they can afford. Enter thus ACORN and the Dems — the party of government. ACORN, like our president, is in the “community organizing” business — a euphemism for putting (some) people in a position to better demand things from government. Some of those demands are perfectly legitimate: reduce crime; fix the potholes. But others, the demands ACORN specializes in, are not thus “common.” They can be satisfied, in a world of scarcity, only by taking from some and giving to others.
And that’s what the housing and health care debates today are largely about. And it’s why on both, the Dems are having difficulty getting their act together, because however much they turn a blind eye toward scarcity or pretend that they all agree, the truth is that they represent discrete constituencies, with discrete conflicting interests. That’s what happens when we’re all thrown into the common pot. What once was decided by individuals, reflecting their own particular interests, is now decided by government — and it’s a Hobbesian war of all against all.
House Democrats Choose Dishonesty
I’m not a fan of the House Democrats’ proposed takeover of the health care sector. (If there’s one thing that legislation is not, it’s “reform.”) But at least House Democrats were honest enough to include the cost of the $245 billion bump in Medicare physician payments in their legislation, unlike some committee chairmen I could mention.
Unfortunately, House Democrats have since decided that dishonesty is the better strategy. They, like Senate Democrats, now plan to strip that additional Medicare spending out of health “reform” and enact it separately. (Democrats are already trying to exempt that spending from pay-as-you-go rules, making it easier for them to expand our record federal deficits.) Why enact it separately? Because excising that spending from the “reform” legislation reduces the cost of health “reform”!
But why stop there? Heck, enact all the new spending separately, and the cost of “reform” would plummet! Enact the new Medicaid spending separately, and the cost of “reform” would fall by $438 billion! Do it with the subsidies to private health insurance companies, and the cost of “reform” would plunge by $773 billion! All that would be left of “reform” would be tax increases and Medicare payment cuts. Health “reform” would dramatically reduce federal deficits! Huzzah!
Except it wouldn’t, because at the end of the day Congress would be spending the same amount of money.
The only good news may be this. If this dishonest budget gimmick succeeds, then Congress will have “fixed” Medicare’s physician payments. Absent that “must pass” legislation, the Democrats health care takeover would lose momentum, and would have to stand on its own merit. That would be good for the Republic, though not for the legislation.
(Cross-posted at Politico’s Health Care Arena.)
Filed under: Cato Publications; Health, Welfare & Entitlements
Broder: Health Overhaul Likely, Because Hardest Part Lies Ahead
Yes, you read that right. And I had to do the same sort of double-take when I read David Broder’s op-ed in The Washington Post this morning.
Broder writes, “Obama has steered the enterprise to the point that odds now favor a bill-signing ceremony. But the hardest choices still lie ahead….” Whaa?? How can the odds be better than 50-50 if the biggest fights haven’t even happened yet?
Broder’s optimism continues, “Two things will be needed to reach [a majority in the House and 60 votes in the Senate]: first, a plausible plan for making affordable and comprehensive health insurance available to millions…. And second, a way of financing the coverage….” But that’s been the whole challenge all along. Is Broder actually acknowledging that Democrats aren’t any closer to a signing ceremony than they were six months ago?
Broder says Democrats can meet the second challenge by taxing high-cost health plans — “a step that would require Obama to face down his labor union allies.” You mean Obama should lean on Democrats to tax a crucial part of their own base? One that’s already activating to block that tax?
Broder also thinks Obama should lean on his fellow Democrats to roll the doctors and hospitals in their states/districts by including more (some? any?) “delivery system reforms” in the legislation.
Sure. No problem. What could go wrong? This is practically a done deal.
(Cross-posted, sarcasm and all, at Politico’s Health Care Arena.)
Have the Democrats Outsmarted the Republicans on Health Care?
In their attempt to defeat Obamacare, Republicans have focused their criticism on the public option, painting it as the most objectionable feature of existing proposals. Senator Max Baucus, (D-Mont.), has now proposed a plan without the public option. This leaves the Republicans in an awkward position, especially since Baucus’s plan is projected to cost less than earlier proposals.
If Republicans oppose the Baucus plan, they surely risk the ire of voters who will be told during the mid-term elections, “The Republicans blocked a plan that would have covered the uninsured and reduced the deficit.”
The problem is, the public option was never the crucial issue; instead, it was the mandate to purchase insurance. Once government mandates insurance coverage, it gets to define what constitutes insurance, which means it can ban pre-existing condition clauses and the like. The mandate also”justifies” large subsidies for insurance, to avoid non-compliance with the mandate. So, an individual mandate, which the Baucus plan includes, implies a rapid takeover of the entire health care system by the federal government.
Something like the Baucus plan will pass. It will either cost far more than existing projections, if government administrators fail to impose the restrictions on reimbursements that generate the projected cost savings, or it will involve massive rationing of care.
The Democrats played it perfectly. The Republicans got sucker-punched.
C/P Libertarianism, from A to Z
Filed under: General; Government and Politics; Health, Welfare & Entitlements
Obama’s Health Care Speech in Plain English
Hell of a speech last night, eh? Here are a few of my favorite gems.
Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition.
Translation: I, Barack Obama, ignoring thousands of years of failed price-control schemes, will impose price controls on health insurance. I will force insurers to sell a $50k policies for $10k. What could go wrong?
We were losing an average of 700,000 jobs per month.
True. And your employer mandate would kill hundreds of thousands of low-wage jobs that would never come back.
They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses…. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care.
Translation: Boy! Are we going to force you to buy a lot of coverage!
I will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the care that you need.
…except for the bureaucrats I proposed to put between you and your doctor.
Some… supported a budget that would have essentially turned Medicare into a privatized voucher program. That will never happen on my watch. I will protect Medicare.
Translation: I will never let seniors control their own health care dollars. I will never give up Washington’s control over your health care decisions. Mmmmuuuuhahahahahaha!
…there are too many Americans counting on us to succeed.
Translation: There are too many lobbyists counting on me to succeed: drug-industry lobbyists, health-insurance lobbyists, physician-cartel lobbyists, large-employer lobbyists, hospital lobbyists….
It’s a plan that asks everyone to take responsibility for meeting this challenge – not just government and insurance companies, but employers and individuals.
Translation: I’m going to tax the hell out of you, but I don’t want you to notice how much I’m going to tax you. So I’m going to tax employers and insurance companies, and they’re going to pass the taxes on to you. Most of the taxes won’t even show up in the government’s budget. It’s all very clever. No, seriously – just ask my economic advisor Larry Summers.
It’s a plan that incorporates ideas from Senators and Congressmen; from Democrats and Republicans – and yes, from some of my opponents in both the primary and general election.
Translation: I may have savaged your ideas in the past, called them irresponsible…risky…dangerous…whatever. But that wasn’t about principle; I just wanted to become president. Now that I’m president, I need a win. So you’ll help me, won’t you? Hey, where’s Hillary?
Summing Up Obama’s Health Care Address
Cato health care experts dissected President Obama’s address Wednesday night, providing live commentary throughout the speech.
Overall impressions:
Michael D. Tanner: Can’t see this as a game-changer. I would give him an ‘A’ on delivery, but at best a ‘C’ on substance. There were surprisingly few details and very little new.
Patrick Basham: Strikingly political/partisan rather than statesmanlike speech. Obama chose to pressure Republicans to support his plan rather than attempt to persuade them to do so. He risks a another wave of (effective) opposition from conservative talk radio & cable TV.
Michael F. Cannon: Translation: My health plan cannot work if you are free to make your own decisions.
Filed under: General; Government and Politics; Health, Welfare & Entitlements
Cato Health Care Experts Live-Blogging Obama’s Address
Cato health care policy experts offered live-commentary to President Obama’s address to Congress on Wednesday night. To review their comments, click the replay button below.
The video player has the speech in full.
Visit msnbc.com for Breaking News, World News, and News about the Economy
Mr. President, Here Is Our Answer
President Obama continues to portray the debate over health care reform as a choice between his plan for a massive government-takeover of the US healthcare system and “doing nothing.” Those who oppose his plan are said to be “obstructionist” or in favor of the status-quo. Yesterday, the President again said, “I’ve got a question for all those folks [who oppose his plan]: What are you going to do? What’s your answer? What’s your solution?”
Well, I can’t speak for all his critics, but the Cato Institute has a long record of supporting health care reform based on free-markets and competition. If the President wanted to know more he might have read my recent op-ed in the Los Angeles Times or Michael Cannon’s piece in Investors Business Daily. He could have read our book, Healthy Competition. Or he might have just gone to healthcare.cato.org and read our plan:
- Let individuals control their health care dollars, and free them to choose from a wide variety of health plans and providers.
- Move away from a health care system dominated by employer-provided health insurance. Health insurance should be personal and portable, controlled by individuals themselves rather than government or an employer. Employment-based insurance hides much of the true cost of health care to consumers, thereby encouraging over-consumption. It also limits consumer choice, since employers get final say over what type of insurance a worker will receive. It means people who don’t receive insurance through work are put at a significant and costly disadvantage. And, of course, it means that if you lose your job, you are likely to end up uninsured as well.
- Changing from employer to individual insurance requires changing the tax treatment of health insurance. The current system excludes the value of employer-provided insurance from a worker’s taxable income. However, a worker purchasing health insurance on their own must do so with after-tax dollars. This provides a significant tilt towards employer-provided insurance, which should be reversed. Workers should receive a standard deduction, a tax credit, or, better still, large Health Savings Accounts (HSAs) for the purchase of health insurance, regardless of whether they receive it through their job or purchase it on their own.
- We need to increase competition among both insurers and health providers. People should be allowed to purchase health insurance across state lines. One study estimated that that adjustment alone could cover 17 million uninsured Americans without costing taxpayers a dime.
- We also need to rethink medical licensing laws to encourage greater competition among providers. Nurse practitioners, physician assistants, midwives, and other non-physician practitioners should have far greater ability to treat patients. Doctors and other health professionals should be able to take their licenses from state to state. We should also be encouraging innovations in delivery such as medical clinics in retail outlets.
- Congress should give Medicare enrollees a voucher, let them choose any health plan on the market, and let them keep the savings if they choose an economical plan. Medicare could even give larger vouchers to the poor and sick to ensure they could afford coverage.
- The expansion of “health status insurance” would protect many of those with preexisting conditions. States may also wish to experiment with high risk pools to ensure coverage for those with high cost medical conditions.
Mr. President, the ball is back in your court.
Rep. Tom Price on the Government Takeover
This video has gotten more than 1,000,000 views on YouTube. It deserves one more: yours.
Market Bets that ObamaCare Won’t Cut Costs
According to Don Johnson of The Health Care Blog:
Speculators seem to be betting that a watered down health insurance reform bill won’t hurt health insurers, hospitals, drug makers or medical device and supply manufacturers.
Stocks for almost all of these health sectors and for exchange trade funds that track health stock indexes turned higher last week.
In other words, those with real money at stake don’t believe that health reform will hurt the firms that make a living off of America’s highly inefficient health sector — President Obama’s assurances notwithstanding.
Johnson provides seven possible explanations for this development, including:
3. If the very liberal Coastal Democrats who lead Congress and most of the five committees drafting health insurance legislation want to get the support of Democrats from Western, Midwestern and Southern states, they’ll have to up Medicare payments to providers in those states. This is bullish for hospital chains, which operate mostly in the fly-over states…
6. Proposals to tax millionaires to pay for covering the uninsured and increasing benefits for others are in trouble, if not dead on arrival. The economy’s in no shape to be stalled by tax hikes, and there appear to be enough Democrats opposed to the tax to stop it.
7. While the so-called Blue Dog Democrats are stalling health insurance reform for economic and ideological reasons, the Congressional Black Caucus has made it clear that it won’t support a bill that the Blue Dogs will support. Throw in the opposition by anti-abortionists who don’t want the legislation to use taxpayers money to pay for abortions, and you have a pretty complex political problem for President Obama, Sen. Majority Leader Harry Reid (D-NV) and Speaker Nancy Pelosi (D-CA). While the Speaker claimed Sunday that she has the votes to pass health insurance reform, few believe her.
Ad Campaign for Real Health Care Reform
Check your local paper today for Cato’s full-page ad about a better health care reform solution: “freedom. Freedom to choose your doctor and health plan. Freedom to spend your health care dollars as you choose. Freedom to make your own medical decisions. Freedom to keep a health plan you are satisfied with.”
It’s running today in the New York Times, the Washington Post, the Washington Times, the Chicago Tribune, and the Los Angeles Times.
Or find the ad here, along with radio ads as well. These ads aren’t cheap, so please consider making a contribution to support Cato’s health care reform efforts.
Filed under: Cato Publications; Health, Welfare & Entitlements
Cato Institute to Launch Ad Campaign Against Government-Run Health Care
The Cato Institute will launch an ad campaign Thursday highlighting under-reported poll data showing Americans’ concerns that current health care reform plans will raise costs, limit choice and reduce the quality of their health care.
The campaign will feature full-page ads in major national newspapers, in addition to radio spots focusing on why government-run health care cannot address the problems of growing costs and lack of coverage for many individuals and families. The campaign will expand in the weeks ahead.
“Our goal is to help the American public navigate terms like ‘a public plan’ and ‘individual or employer mandates’ to understand what is really happening here,” said Ed Crane, founder and president of the Cato Institute. “The bottom line is, most of the plans coming from the White House and congressional leadership will result in a government-run health care system that is really not the best option for most Americans.”
A poll by the Washington Post and ABC News conducted June 18-21 showed that 84 percent of respondents were “very” or “somewhat” concerned that “current efforts to reform the health care system” would increase their health care costs. The survey also showed that 79 percent of respondents were concerned that current efforts would limit their choices of doctors or medical treatments.
As part of the campaign, Cato is running radio ads in major cities across the country. You can listen to them below, and embed them on your own blog using the code on the official campaign site.
Who Pays?
Who Decides?
Cato has also created a new website, Healthcare.cato.org, to promote more free market-oriented health care reform proposals.
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