Washington is captivated by the Senate melodrama over the so-called public option, salivating at the ring of Harry Reid’s political bell (see below). But the most important health-care questions continue to be about the policy substance—particularly those that Democrats don’t want asked.
Foremost among them is: How will ObamaCare affect insurance premiums in the private health-care markets? Despite indignant Democratic denials, the near-certainty is that their plan will cause costs to rise across the board. The latest data on this score come from a series of state-level studies from the insurance company WellPoint Inc.
At the request of Congressional delegations worried about their constituents—call it a public service—WellPoint mined its own actuarial data to model ObamaCare in the 14 states where it runs Blue Cross plans. The study therefore takes into account market and demographic differences that other industry studies have not, such as the one from the trade group America’s Health Insurance Plans, which looked at aggregate national trends.
In all of the 14 states WellPoint scrutinized, ObamaCare would drive up premiums for the small businesses and individuals who are most of WellPoint’s customers. (Other big insurers, like Aetna, focus on the market among large businesses.) Young and healthy consumers will see the largest increases—their premiums would more than triple in some states—though average middle-class buyers will pay more too.
Not even two hours after Wellpoint had presented its materials on the Hill, Democrats were already trashing it—which, considering that it runs to some 238 pages and took weeks to prepare, must have required remarkable powers of digestion and analysis.
A national pro-life group is warning members of Congress that a vote in favor of the 1,990-page House healthcare bill is a vote to establish a federal government program that would directly fund abortion-on-demand with taxpayer dollars.
“This is a federal agency, a federal program, [and] of course it’s going to spend federal funds – that’s the only kind of funds it’s got,” he notes. “So all of these assurances that some prominent Democrats, including President Obama, have given that there won’t be federal funding for abortions, that’s not what’s in the bill.”
Johnson warns that House Speaker Nancy Pelosi (D-California) wants to ram the bill through without representatives having a chance to vote on a single amendment. However, in order to use that “closed rule” procedure, a majority of House members have to agree to the move. The pro-life spokesman is urging members to vote “no” on a closed rule.
“We want to vote on an amendment that would take abortion out of this bill, which is the [Bart] Stupak amendment,” Johnson clarifies, referring to the Michigan Democrat. “We believe if we could get a vote in the full House on that amendment, it would pass.”
Congressman Stupak has vowed that if he does not get a vote on his amendment barring federal funding of abortion, he and 40 pro-life Democrats will block a full House vote on the healthcare bill.
Senate Majority Leader Harry Reid on Monday sought to assuage the left wing of his Democratic Party by deciding to include a government-run insurance plan in his health care reform bill, bypassing the lone Republican who supported the effort and ensuring a bruising political battle in pursuit of President Obama’s top legislative priority.
In an attempt to gain pivotal support from moderate Democrats, Mr. Reid also said the bill he sends to the Senate floor will allow states to “opt out” of the insurance plan, also known as a public option. But moderates withheld their backing, waiting to hear more details.
Sen. Olympia J. Snowe of Maine, the only Republican to vote for a Democratic reform bill in five congressional committees, said she was “deeply disappointed” with Mr. Reid’s decision and would not support the bill. She favored a plan to hang the threat of a public plan over private insurers to encourage them to lower costs, but not to include it in the initial health reform program.
Mr. Reid, of Nevada, offered few other specifics of his bill and declined to say whether he had the 60 votes required to overcome a Republican fillibuster.
On October 19th, sixteen highly regarded physicians representing many fields – cardiology, oncology, ophthalmology, general surgery, internal medicine, and others – assembled to discuss the impact of the currently proposed health bills on their patients.
WASHINGTON (AP) — Quick quiz: What do these enterprises have in common? Farm and construction machinery, Tupperware, the railroads, Hershey sweets, Yum food brands and Yahoo? Answer: They’re all more profitable than the health insurance industry.
In the health care debate, Democrats and their allies have gone after insurance companies as rapacious profiteers making ”immoral” and ”obscene” returns while ”the bodies pile up.”
Ledgers tell a different reality. Health insurance profit margins typically run about 6 percent, give or take a point or two. That’s anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones.
Profits barely exceeded 2 percent of revenues in the latest annual measure. This partly explains why the credit ratings of some of the largest insurers were downgraded to negative from stable heading into this year, as investors were warned of a stagnant if not shrinking market for private plans.
Insurers are an expedient target for leaders who want a government-run plan in the marketplace. Such a public option would force private insurers to trim profits and restrain premiums to compete, the argument goes. This would ”keep insurance companies honest,” says President Barack Obama.
The debate is loaded with intimations that insurers are less than straight, when they are not flatly accused of malfeasance.
A recent IBD/TIPP Poll showed two-thirds of physicians opposing Congress’ proposed reforms, and warning of dire consequences. Now, a forum of prominent doctors has amplified those concerns.
Of 1,376 doctors responding in late August, 65% opposed Congress’ reform plans; 45% said enactment would make them consider leaving their practice or take early retirement; and 67% expected fewer students to apply to medical schools.
Some 65% also felt seniors would end up with lower-quality care under a government plan; 71% didn’t think it possible for the government to cover 47 million more people and cut costs while also delivering better quality care; finally, 60% of physicians didn’t think that under a government plan, drug companies would have incentives to continue developing as many lifesaving new medicines.
America’s doctors know their patients better than politicians do. And the hostility seen in these poll results was mirrored by virtually all of the 15 esteemed physicians from the New York metropolitan area gathered by former New York state Lt. Gov. Betsy McCaughey for a Forum on Medical Excellence Monday evening.
The debate over health-care reform has sparked all sorts of controversy over costs, regulations and choices. But one ‘feature’ seems to have escaped notice: the built-in lack of accountability of our elected leaders for what health care will be like after the plan is implemented.
Proponents claim we need reform now to solve an immediate health care “crisis.” “If we don’t act, 14,000 Americans will continue to lose their health insurance every single day,” President Obama claimed on July 22.
Yet the bills he urges us to support will not actually provide any health care until 2013 — by which time, if the president’s claim is correct, an additional 17 million Americans will have lost their insurance.
Why the delay? The best way the people have to hold their elected leaders accountable for results is by threatening to withhold their votes. But this bill seems expressly designed to eliminate that source of accountability. By the time Americans experience the effects of this health care bill (except for the tax increases), not only will President Obama have run for re-election, but so will two-thirds of the senators — and every House member will have been up for re-election twice. Their votes on health care reform will be old news. If it goes very badly, it will be too late to vote those responsible out of office.
Furthermore, the House bill leaves all the knotty details and controversial issues to the newly created “Health Choices Commissioner.”
That’s the person whose job it will be to make a lot of our health care choices for us. The Senate Finance Committee (Baucus) proposal gives that authority to the secretary of Health and Human Services. Issues such as whether to:
Permit people with Health Savings Accounts (HSAs) to retain the high-deductible health plans required by the HSA law.
Allow low-cost catastrophic plans.
Permit insurance companies to cover treatment of otherwise terminally ill patients.
Require (or prohibit) coverage of abortion.
Cover new cancer drugs or controversial procedures like (as the Center for American Progress has called for) transgender operations.
Washington has just run a $1.4 trillion budget deficit for fiscal 2009, even as we are told a new health-care entitlement will reduce red ink by $81 billion over 10 years. To believe that fantastic claim, you have to ignore everything we know about Washington and the history of government health-care programs. For the record, we decided to take a look at how previous federal forecasts matched what later happened. It isn’t pretty.
Let’s start with the claim that a more pervasive federal role will restrain costs and thus make health care more affordable. We know that over the past four decades precisely the opposite has occurred. Prior to the creation of Medicare and Medicaid in 1965, health-care inflation ran slightly faster than overall inflation. In the years since, medical inflation has climbed 2.3 times faster than cost increases elsewhere in the economy. Much of this reflects advances in technology and expensive treatments, but the contrast does contradict the claim of government as a benign cost saver.
Next let’s examine the record of Congressional forecasters in predicting costs. Start with Medicaid, the joint state-federal program for the poor. The House Ways and Means Committee estimated that its first-year costs would be $238 million. Instead it hit more than $1 billion, and costs have kept climbing.
Thanks in part to expansions promoted by California’s Henry Waxman, a principal author of the current House bill, Medicaid now costs 37 times more than it did when it was launched—after adjusting for inflation. Its current cost is $251 billion, up 24.7% or $50 billion in fiscal 2009 alone, and that’s before the health-care bill covers millions of new beneficiaries.
Medicare has a similar record. In 1965, Congressional budgeters said that it would cost $12 billion in 1990. Its actual cost that year was $90 billion. Whoops. The hospitalization program alone was supposed to cost $9 billion but wound up costing $67 billion. These aren’t small forecasting errors. The rate of increase in Medicare spending has outpaced overall inflation in nearly every year (up 9.8% in 2009), so a program that began at $4 billion now costs $428 billion.
On Monday, October 19, Senator Jon Kyl of Arizona shared with his colleagues in the Senate what he has been hearing from his constituents on Health Care Reform. Senator Kyl gave a 20-minute presentation in which he aptly articulated the concerns most Americans are expressing about the Health Care Reform bill. Although it is a bit long, this is a “must-see” speech for everyone who cares about the future of health care in America.
This is a presentation given by Dave Racer at the annual meeting of Association of American Physicians on October 2, 2009. Click here to order copies of Racer’s book, “Facts Not Fiction on Health Care.”
By Douglas Holtz-Eakin — Remember when health-care reform was supposed to make life better for the middle class? That dream began to unravel this past summer when Congress proposed a bill that failed to include any competition-based reforms that would actually bend the curve of health-care costs. It fell apart completely when Democrats began papering over the gaping holes their plan would rip in the federal budget.
As it now stands, the plan proposed by Democrats and the Obama administration would not only fail to reduce the cost burden on middle-class families, it would make that burden significantly worse.
Consider the bill put forward by the Senate Finance Committee. From a budgetary perspective, it is straightforward. The bill creates a new health entitlement program that the Congressional Budget Office (CBO) estimates will grow over the longer term at a rate of 8% annually, which is much faster than the growth rate of the economy or tax revenues. This is the same growth rate as the House bill that Sen. Kent Conrad (D., N.D.) deep-sixed by asking the CBO to tell the truth about its impact on health-care costs.
To avoid the fate of the House bill and achieve a veneer of fiscal sensibility, the Senate did three things: It omitted inconvenient truths, it promised that future Congresses will make tough choices to slow entitlement spending, and it dropped the hammer on the middle class.
One inconvenient truth is the fact that Congress will not allow doctors to suffer a 24% cut in their Medicare reimbursements. Senate Democrats chose to ignore this reality and rely on the promise of a cut to make their bill add up. Taking note of this fact pushes the total cost of the bill well over $1 trillion and destroys any pretense of budget balance.
It is beyond fantastic to promise that future Congresses, for 10 straight years, will allow planned cuts in reimbursements to hospitals, other providers, and Medicare Advantage (thereby reducing the benefits of 25% of seniors in Medicare). The 1997 Balanced Budget Act pursued this strategy and successive Congresses steadily unwound its provisions. The very fact that this Congress is pursuing an expensive new entitlement belies the notion that members would be willing to cut existing ones.
The Senate Finance Committee, chaired by Sen. Max Baucus (D-Mont.), claimed it posted the “full text” of its health care reform bill, “America’s Healthy Future Act,” on its Web site. But when users clicked the link to read the proposed law, they could only access a 259-page document that included summaries of both current law and the proposed legislation–or what some senators called a “plain English” version of the bill.
The actual “legislative language” of the bill–the words that would become the law of the land if the bill were enacted–is not available to the public and apparently has not even been written.
Nonetheless, the Congressional Budget Office (CBO) scored the plain text summary of the bill on Oct. 7, cautiously estimating its cost at $829 billion. The members of the committee voted the bill out of the committee based on the summary on Tuesday, 14-9, picking up only one Republican vote, Sen. Olympia Snowe of Maine.
While the committee released a memorandum to reporters and editors on Oct. 2 claiming had released the “full text of the America’s Healthy Future Act,” the link attached to the online version of the memorandum led to the summary–not an actual legislative text–and the CBO’s Oct. 7 “preliminary analysis” of the bill contradictng the committee’s claim that it had released the “full text.”
“The Chairman’s mark, as amended, has not yet been converted into legislative language,” said the CBO. ”The review of such language could lead to significant changes in the estimates of the proposal’s effects on the federal budget and insurance coverage.”
The Senate Finance Committee bill written by Chairman Max Baucus (D-Mont.) (the Baucus bill) will drive up the cost of health insurance for all Americans and then force everyone to buy it or face tax penalties or jail time. While the Baucus bill does cap out-of-pocket costs based on a person’s income, the effect on American families is still staggering, says PricewaterhouseCoopers.
Other findings:
For individuals making $34,140 (three times the Federal Poverty Level) the Baucus health care proposal could mandate up to $4,097 in annual premiums, a sum which could have been spent on over nine months of food, almost four months of housing or well over a year of utilities.
For a family of four making $69,480 (300 percent above poverty) the Baucus bill mandates annual health insurance premiums of $8,338, which would be worth the equivalent of over 10 months of food, four months of housing or almost two years of utilities.
For individuals earning $45,520 (400 percent above poverty) Baucus mandates $5,462 for health insurance, or over a year of food, four months of rent or a year and a half of utilities.
For families earning $92,640 (400 percent above poverty) Baucus mandates $11,117 in health premiums, the equivalent of over a year of food, five months of housing or two years of utilities.
Those numbers include the subsidies for health insurance in the Baucus bill. To pay for all this new health care spending, plus the massive expansion of Medicaid, the Congressional Budget Office (CBO) estimates that the Baucus bill will collect $4 billion in fines from those who do not purchase insurance, $200 billion taxing health insurance companies with generous health plans, and $25 billion in taxes on employers. Not to mention the billions in cuts to Medicare payments to hospitals which will result in significant cost shifting to consumers.
Instead of reducing the average family’s health insurance premiums by $2,500 per year, as President Obama promised, the Baucus bill would actually raise them by $4,000 more than they would have been without reform. The Baucus bill spends at least $1 trillion, fails to cover all Americans, taxes employers for creating jobs, and inflicts higher out-of-pocket health care costs on all Americans.
Source: Report, “Potential Impact of Health Reform on the Cost of Private Health Insurance Coverage,” PricewaterhouseCoopers, October 2009.
87 percent of the revenue in the original Baucus proposal to finance Obamacare would come from individuals with incomes of less than $200,000.
The U.S. Senate’s version of Obamacare finally is emerging into broad daylight, and the more people see of it, the less popular it should be.
For all the rhetoric, the plan is quite easy to sketch, thanks in part to an analysis by the congressional Joint Committee on Taxation.
So here goes: Under the health-care plan advanced by Senate Finance Committee Chairman Max Baucus, lower- and middle-class people who have insurance today are going to be taxed and squeezed in order to cover people who don’t.
The money to finance the new entitlement comes from two main sources, tax increases and Medicare cuts. Medicare cuts are mostly borne by elderly folks with modest means. That undoubtedly explains why seniors are so concerned.
The tax increases, by contrast, have received little attention. There has been almost no discussion of the simple question: who would pay the tab?
Think about how unusual that is. It is a radical departure from past tax debates. When President George W. Bush was in office, every tax proposal, no matter how minor, seemed to be buried by a blizzard of detailed distributional analyses that went from think-tank Web sites to the front pages of your favorite newspaper instantaneously.
In this debate, the distributional-industrial complex has remained silent.
Such remarkable silence in the noisiest town on earth can only be caused by an uncomfortable truth. And the mother of all uncomfortable truths is lurking below the surface in the health debate. If you are a card-carrying member of the left-wing establishment, you can’t analyze the distributional consequences of the health bill, because if you do, you will catch President Barack Obama in a lie.
The Senate Finance Committee holds its big health-care vote today, but the bigger story is that the health-care industry may finally be coming to its senses. After months of serving as Rose Garden props, insurers, doctors and hospitals are discovering they’ve been taken for a ride on ObamaCare. Too bad it may be too late to stop the train.
The best scales-from-the-eyes moment comes courtesy of America’s Health Insurance Plans, the industry lobby. Yesterday AHIP released an important PricewaterhouseCoopers study showing that the Finance bill would on average add some $1,700 a year to the cost of family coverage in 2013. A decade from now, family premiums would cost $4,000 more than if Congress did nothing, and singles would pay about $1,500 more. Hardest hit would be the individual market, with rates rising by 49%, but even the largest employers would see increases between 9% and 11%.
The study’s findings won’t shock anyone who’s read the bill’s details, but its provenance might: In a deal cut earlier this year, the insurance industry acquiesced to rules requiring them to take all comers, regardless of health status or history, and also charge them more or less the same premiums. In return, Congress would subsidize individuals to buy their products and provide new customers by requiring everyone to buy insurance or pay a tax penalty.
From the Wall Street Journal
A national pro-life group is warning members of Congress that a vote in favor of the 1,990-page House healthcare bill is a vote to establish a federal government program that would directly fund abortion-on-demand with taxpayer dollars.
Senate Majority Leader Harry Reid on Monday sought to assuage the left wing of his Democratic Party by deciding to include a government-run insurance plan in his health care reform bill, bypassing the lone Republican who supported the effort and ensuring a bruising political battle in pursuit of President Obama’s top legislative priority.
From the New York Times
by Robert A. Book, Ph.D.
Washington has just run a $1.4 trillion budget deficit for fiscal 2009, even as we are told a new health-care entitlement will reduce red ink by $81 billion over 10 years. To believe that fantastic claim, you have to ignore everything we know about Washington and the history of government health-care programs. For the record, we decided to take a look at how previous federal forecasts matched what later happened. It isn’t pretty.
By Douglas Holtz-Eakin — Remember when health-care reform was supposed to make life better for the middle class? That dream began to unravel this past summer when Congress proposed a bill that failed to include any competition-based reforms that would actually bend the curve of health-care costs. It fell apart completely when Democrats began papering over the gaping holes their plan would rip in the federal budget.
The Senate Finance Committee, chaired by Sen. Max Baucus (D-Mont.), claimed it posted the “full text” of its health care reform bill, “America’s Healthy Future Act,” on its Web site. But when users 
The Senate Finance Committee bill written by Chairman Max Baucus (D-Mont.) (the Baucus bill) will drive up the cost of health insurance for all Americans and then force everyone to buy it or face tax penalties or jail time. While the Baucus bill does cap out-of-pocket costs based on a person’s income, the effect on American families is still staggering, says PricewaterhouseCoopers. 
The U.S. Senate’s version of Obamacare finally is emerging into broad daylight, and the more people see of it, the less popular it should be.
The Senate Finance Committee holds its big health-care vote today, but the bigger story is that the health-care industry may finally be coming to its senses. After months of serving as Rose Garden props, insurers, doctors and hospitals are discovering they’ve been taken for a ride on ObamaCare. Too bad it may be too late to stop the train.
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