Posted from Investor Business Daily

By RUDY BOSCHWITZ AND TIM PENNY-  In considering whether to expand the government’s role in the delivery of health care or in health care insurance, it is worth looking at Medicare and Medicaid.

These two huge programs already make the government the largest player in the health care industry. The profligate nature of these two programs should raise lots of doubt about the Obama program doing anything but “busting” the budget.

In 1968 total spending by the federal government was $178.1 billion dollars. Forty years later in 2007, total spending had risen to $2,728.9 billion dollars. So the budget of the U.S. increased in dollar terms 15.3 times in that 40-year span.

But all programs did not rise in unison. Some rose more, others less.

Outlays for Social Security rose from $23.3 billion in 1968 to $581.4 billion in 2007, an increase of 25 times. So Social Security drove the budget higher at a substantially faster rate than the budget rose as a whole.

ObamaCare plans to expand the government’s role in insuring the American people. The government is already the largest insurer in the health care business through Medicare. We are now told ObamaCare will save money.

What kind of impact did Medicare, the first large government health insurance plan have in budgetary terms? Medicare rose from $5.1 billion in 1968 to $436.0 billion in 2007 an astounding increase of 85.5 times over the 40-year period. Will Obama-Care be better?

Beware of government estimates about the future cost of ObamaCare. When Medicare was being considered in the mid-1960s, the government projected that the outlays for the program 25 years down the road would be $10 billion. Instead, in 1990, 25 years later, the outlays were $107 billion. Government estimates were off by a factor of more than 10!

Medicaid, the other large medical program currently in effect, outdid Medicare. Medicaid outlays in 1968 were $1.8 billion. In 2007 they had risen to $190.6 billion, an increase in dollar terms of 105.9 times.

And that is only the Federal outlay number. There is a roughly equal Medicaid amount spent by the states due to federal mandates. Without those mandates we would not be reading about the large deficits that most states endure.

The idea of expanding the federal role in the medical arena is truly fiscally irresponsible. The claim that money will be saved through government competition with the private insurance system (with government setting the rules!) is the height of fantasy.

If 45 million Americans are now uninsured, that means 265 million are insured privately, and the government should not disrupt that. If the government becomes the insurer of most Americans, the impact on the budget would be absolutely awesome. Rationing of medical care that is so often mentioned would surely result.

Equally depressing are the estimates which say that even with ObamaCare, millions will remain uninsured.

Nor is government insurance so great. During Boschwitz’s 12 years as a U.S. senator, he never took government insurance. His wife continued working at the company they started. She continued the insurance available to all full-time employees. He was the dependent. It was both cheaper and more comprehensive coverage than the congressional plan. For the same reason, he never signed up for Medicare. He’s back on the company plan!

If in the 40-year span from 1968 through 2007 Social Security went up 25 times, Medicare 85.5 and Medicaid 105.9, why did the total federal budget increase overall only 15.3 times? What held the budget back?

It was largely defense. Defense outlays rose from $82.2 billion in 1968 (or 46.1% of the total budget) to $547.9 billion in 2007 (20.1% of the total budget). In dollars, that is an increase of a bit less than 6.7 times.

Yet on a recent talk show Rep. Barney Frank assured us that we can pay for these new medical programs by decreases in defense outlays and additional taxes on the “rich” — those with incomes exceeding $250,000, he explained.

Medicine over our lifetime has made extraordinary progress. New discoveries and advances continue to be announced almost weekly. Most — but not all — have occurred here in the U. S. where medicine has always attracted the best and the brightest.

The government has played a most significant role by funding research through the National Institute of Health to the tune presently of $30 billion annually. It is a proper role for government and among the best and most admired of programs that receives the broadest bipartisan support.

Will the best and brightest young people be attracted to a career run by government rules, regulations and financial dictates that may well frown upon individual initiative? Our fear is that they will not, and the extraordinary progress of medicine will slow.

That alone is reason enough to oppose the government’s further immersion into the field of medicine.

Boschwitz, a Repubican, served in the Senate from 1978 to 1991 and was a member of the Budget Committee throughout. Penny, a Democrat, served in the House from 1983 to 1995. Both are from Minnesota.

Posted from the Wall Street Journal

By Betsy McCaughey — Since Medicare was established in 1965, access to care has enabled older Americans to avoid becoming disabled and to travel and live independently instead of languishing in nursing homes. But legislation now being rushed through Congress—H.R. 3200 and the Senate Health Committee Bill—will reduce access to care, pressure the elderly to end their lives prematurely, and doom baby boomers to painful later years.

The Congressional majority wants to pay for its $1 trillion to $1.6 trillion health bills with new taxes and a $500 billion cut to Medicare. This cut will come just as baby boomers turn 65 and increase Medicare enrollment by 30%. Less money and more patients will necessitate rationing. The Congressional Budget Office estimates that only 1% of Medicare cuts will come from eliminating fraud, waste and abuse.

The assault against seniors began with the stimulus package in February. Slipped into the bill was substantial funding for comparative effectiveness research, which is generally code for limiting care based on the patient’s age. Economists are familiar with the formula, where the cost of a treatment is divided by the number of years (called QALYs, or quality-adjusted life years) that the patient is likely to benefit. In Britain, the formula leads to denying treatments for older patients who have fewer years to benefit from care than younger patients.

When comparative effectiveness research appeared in the stimulus bill, Rep. Charles Boustany Jr., (R., La.) a heart surgeon, warned that it would lead to “denying seniors and the disabled lifesaving care.” He and Sen. Jon Kyl (R., Ariz.) proposed amendments to no avail that would have barred the federal government from using the research to eliminate treatments for the elderly or deny care based on age.

Read the rest of the column

Posted from Washington Post

Congress’s chief budget analyst delivered a devastating assessment yesterday of the health-care proposals drafted by congressional Democrats, fueling an insurrection among fiscal conservatives in the House and pushing negotiators in the Senate to redouble efforts to draw up a new plan that more effectively restrains federal spending.

Under questioning by members of the Senate Budget Committee, Douglas Elmendorf, director of the nonpartisan Congressional Budget Office, said bills crafted by House leaders and the Senate health committee do not propose “the sort of fundamental changes” necessary to rein in the skyrocketing cost of government health programs, particularly Medicare. On the contrary, Elmendorf said, the measures would pile on an expensive new program to cover the uninsured.

Though President Obama and Democratic leaders have repeatedly pledged to alter the soaring trajectory — or cost curve — of federal health spending, the proposals so far would not meet that goal, Elmendorf said, noting, “The curve is being raised.” His remarks suggested that rather than averting a looming fiscal crisis, the measures could make the nation’s bleak budget outlook even worse.

Elmendorf’s blunt language startled lawmakers racing to meet Obama’s deadline for approving a bill by the August break. The CBO is the official arbiter of the cost of legislation. Fiscal conservatives in the House said Elmendorf’s testimony would galvanize the growing number of Democrats agitating for changes in the more than $1.2 trillion House bill, which aims to cover 97 percent of Americans by 2015.

A lot of Democrats want to see more savings, said Rep. Mike Ross (D-Ark.), who is leading an effort to amend the bill before next week’s vote in the Energy and Commerce Committee. “There’s no way they can pass this bill on the House floor. Not even close.”

Republicans also seized on Elmendorf’s remarks, with House Minority Leader John A. Boehner (R-Ohio) saying they prove “that one of the Democrats’ chief talking points is pure fiction.” Senate Minority Leader Mitch McConnell (R-Ky.) said Elmendorf’s testimony should serve as a “wake-up call” to Obama and Democratic leaders to heed requests from lawmakers in both parties to slow down the process.

Sen. Olympia Snowe (R-Maine) said she delivered that message directly to Obama at the White House yesterday, and strongly urged him to give up his August deadline so bipartisan negotiators in the Senate Finance Committee can craft a new reform plan that does more to control costs.

“I think it would be prudent for the president to be patient,” said Snowe, whom Obama is courting aggressively. Bipartisan approval of a finance bill “can provide huge impetus for the success of this legislation and achieving broader support as it goes through the legislative process.”

Talks in the Senate broke late yesterday, with plans to resume next week. Senate Finance Committee Chairman Max Baucus (D-Mont.) said the group is considering about a dozen options to cover the estimated $1 trillion cost of its package, including reductions in Medicare spending and additional tax increases.

Sen. Charles E. Grassley (R-Iowa), whose support could compel numerous GOP senators to take a serious look at the package, said he is “hoping” to embrace the final product. Otherwise, he said, “I wouldn’t be at the table.” After Elmendorf’s testimony, Grassley said Senate negotiators are determined to “overcome the shortcomings” of the House proposal.

The chairman of the Senate Budget Committee, Sen. Kent Conrad (D-N.D.), also has taken a leading role in the Finance Committee negotiations. Yesterday, when Elmendorf appeared before Conrad’s committee to testify about the nation’s long-term budget problems, Conrad focused his questions on the House and Senate committee measures, which were drafted without Republican input.

“I’m going to really put you on the spot,” Conrad said. “From what you have seen from the products of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?”

Elmendorf responded: “No, Mr. Chairman.” Although the House plan to cover the uninsured, for example, would add more than $1 trillion to federal health spending over the next decade, according to the CBO, it would trim about $500 billion from existing programs — increasing federal health spending overall.

Some provisions of the bill have the potential to trim spending further, Elmendorf said, but “the changes that we have looked at so far do not represent the sort of fundamental change, the order of magnitude that would be necessary, to offset the direct increase in federal health costs that would result from the insurance coverage proposals.”

Asked what provisions should be added, Elmendorf suggested changing the way Medicare reimburses providers to create incentives for reducing costs. He also suggested ending or limiting the tax-free treatment of employer-provided health benefits, calling it a federal “subsidy” that encourages spending on ever-more-expensive health packages.

Key senators, including Conrad, have been pressing to tax employer-provided benefits, but Senate leaders last week objected, saying that the idea, which Obama opposed on the campaign trail, does not have enough support to win passage. Yesterday, Baucus said White House opposition had hindered acceptance of the tax, which critics said would target police and firefighters who receive generous benefits packages.

Grassley said he urged Obama earlier this week to reconsider the tax, which the CBO has repeatedly identified as one of the best tools available for driving down long-term federal health spending. Obama said he could not do that, Grassley recalled. “Does he really want to bend the cost curve? He ought to be out in front on this issue and endorse it,” he said.

The benefits tax is also hugely unpopular in the House, which has instead proposed a surtax of as much as 5.4 percent on income exceeding $350,000 a year to pay for health reform. “You’re not going to get a tax on health benefits,” said Rep. George Miller (D-Calif.), chairman of the House Committee on Education and Labor.

But House Speaker Nancy Pelosi (D-Calif.) said she welcomes other efforts to improve the bill, including demands for additional savings.

“Can there be more? I think so,” Pelosi said. “And that is what the legislative process is about. You don’t write the whole bill, introduce it and then go to the floor. This is the time now for an open process of bipartisan review of the bill in the committees.”

Meanwhile, a growing number of physician groups are also objecting to the House package. Although the chief executive of the American Medical Association pledged yesterday to “help build support” for the legislation, as many as 20 state medical societies have drafted a letter to congressional leaders vowing to fight creation of a government-sponsored health insurance program that could compete with private firms.