By Michael D. Tanner: The crystal ball is still far too cloudy to predict whether or not Obamacare will pass, but it is not too soon to make some predictions about what the future will look like if it does pass.
The bill will cost more than advertised. It won’t be long before Congress is shocked — shocked! — to discover that health-care reform is going to cost a lot more than expected. It’s not just the budgetary gimmicks that Democrats have been employing to hide the bill’s true cost. It’s also that government programs — and government health-care programs in particular — almost always end up exceeding their cost estimates.
For example, when Medicare was instituted in 1965, it was estimated that the cost of Medicare Part A would be $9 billion by 1990. In actuality, it was seven times higher — $67 billion. Similarly, in 1987, Medicaid’s special hospitals subsidy was projected to cost $100 million annually by 1992, just five years later; it actually cost $11 billion, more than 100 times as much. And in 1988, when Medicare’s home-care benefit was established, the projected cost for 1993 was $4 billion, but the actual cost in 1993 was $10 billion.
Insurance premiums will keep rising. The president has tried to convince people that health-care reform will cut their insurance costs. They are in for a surprise. According to the Congressional Budget Office, insurance premiums will double in the next few years. The bill will do nothing to diminish that increase. In fact, for the millions of Americans who get their insurance through the individual market, rather than from an employer, this bill will raise premiums by 10–13 percent more than if we do nothing. Young and healthy people can expect their premiums to go up even more.
The quality of care will be worse. Doctors’ reimbursements for providing care will be squeezed, making it harder to find a doctor. A new survey in the New England Journal of Medicine reports that 46 percent of doctors may give up their practice in the wake of this bill. While that is probably exaggerated, many doctors will likely decide to reduce their patient loads or retire. At the same time, increased demand will create additional problems.
In Massachusetts, after the passage of Romneycare, the wait to see a primary-care physician increased from 33 to 52 days. Research and development will also be cut back, meaning there will be fewer new drugs and other medical breakthroughs. And the government will increasingly intervene in medical decision making, micromanaging medical decisions and deciding what treatments are most effective or, frighteningly, most cost-effective.
The Left will keep pushing for more. Speaker Nancy Pelosi’s inner censor was clearly on the fritz this week when she said, “Once we kick through this door, there’ll be more legislation to follow.” Faced with rising costs and higher premiums, not to mention millions still uninsured, Democrats will blame the “evil” insurance companies and demand further reform. They will argue that we tried “moderate” reform and failed. Pelosi could no longer keep a lid on what the hard Left has been restraining itself from saying all along: It sees this legislation as the perfect first step in the long march to universal single-payer health care.
Republicans won’t really try to repeal it. Republicans will run this fall on a promise to repeal this deeply unpopular bill, and will likely reap the political advantages of that promise. But in reality there is little chance of their following through. Even if Republicans were to take both houses of Congress, they would still face a presidential veto and a Democratic filibuster.
But more important, once an entitlement is in place, it becomes virtually impossible to take away. The fact that Republicans have been criticizing Obamacare for cutting Medicare shows that they are not really willing to take the heat for cutting people’s benefits once they have them — no matter how unaffordable those benefits are. Paul Ryan put forth a serious plan for entitlement reform — and attracted just six co-sponsors at last count. Enough said.
As Scrooge asked in A Christmas Carol, “Are these the shadows of the things that will be, or are they shadows of things that may be?” By Sunday night, we should know.
On Dec. 7, 1941, an announcement was made during the football game between the hometown Washington Redskins and the Philadelphia Eagles. All the generals and admirals at Griffith Stadium were instructed to report to their duty stations. Little did they know their lives would be changed forever and America would be at war, or on war footing, for the next half-century. Pearl Harbor had been attacked.
America will be in a constant health-care war if ObamaCare is enacted. Passage wouldn’t end the health-care debate. Rather, it would perpetuate ObamaCare as the dominant issue for decades to come, reshape politics, create an annual funding crisis in Congress, and generate a spate of angry lawsuits. Yet few in Washington seem aware of what lies ahead.
We only have to look at Great Britain to get a glimpse of the future. The National Health Service—socialized medicine—was created in 1946 and touted as the envy of the world. It’s been a contentious issue ever since. Its cost and coverage are perennial subjects of debate. The press, especially England’s most popular newspaper, The Daily Mail, feasts on reports of long waiting periods, dirty hospitals, botched care and denied access to treatments.
A Conservative member of the European Parliament, Daniel Hannan, last year in an interview on Fox News denounced the NHS as a “60-year mistake,” declaring he “wouldn’t wish it on anybody.” As prime minister, Margaret Thatcher bravely cut NHS spending in the 1980s, but current Tory leaders regard criticism of the NHS as too risky. “The Conservative Party stands four square behind the NHS,” its leader, David Cameron, said in response to Mr. Hannan.
1. You Can’t Keep Your Plan Even if You Like It: The president promises you can keep your plan and doctor if you like them—polls show the overwhelming majority of Americans do—but independent analysts found Obamacare would cause a change of plan or doctor for as many as 56 percent of currently covered employees. Additionally, your doctor may not want to keep you. (See Point No. 8.)
2. Your Insurance Premiums Will Go Up:The nonpartisan Congressional Budget Office found Obamacare will increase the average family’s premiums by as much as 13 percent by 2016, and PriceWaterhouseCoopers found an increase of $4,000 by 2019.
3. You May Be Among the Hundreds of Thousands Who Lose Their Jobs: The nonpartisan Lewin Group predicts the massive new employer mandates would cause as many as 600,000 workers to lose their jobs under Obamacare. Other sources predict even more.
4. Your Tax Burden Will Increase: The Senate bill contains as many as 19 new taxes. The entire proposal functions as a massive regressive tax falling on the young and lowerincome workers, making them beholden to subsidies and punishing success.
5. You Will Be Forced to Pay for Abortions: The president promised no taxpayer dollars would go toward funding abortions. But the Senate bill specifically allows for such funding, and House leaders acknowledge they will not attempt to restrict abortion funding in the final bill.
6. Your Health Care Will Cost More: Obamacare’s attempt to “bend the cost curve” and slow the pace of rising health care costs is a sham. In reality, the only reductions in cost come through reduced government reimbursements to hospitals and doctors, who will be forced to lower the quality of care and pass more costs on to the taxpayers.
7. Your Employer Will Have to Pay More to the Government: Forget that raise you were hoping for. It makes economic sense for small employers facing burdensome new requirements to stay small, and for large businesses to fire permanent employees and hire contractors.
8. Your Doctor May Quit: A survey by Investor’s Business Daily found 45 percent of doctors said they “would consider leaving their practice or taking an early retirement” if Obamacare passes. Seventy-two percent of doctors oppose Obama’s health care plan.
9. You Will Be Forced to Purchase Insurance Approved by Bureaucrats: Do you like Medicare Advantage? Gone. Like your high-deductible HSA plan? Forget it. The bureaucrats in Washington will tell you what you can buy, and you will be required to buy something.
10. You and Your Children Will Pay for Trillions in Added Debt: Democrat Sen. Max Baucus admits the cost of Obamacare is more than $2.5 trillion over 10 years. Claims that the bill is deficit-neutral are based on budgetary gimmicks. We will pay the tab for generations to come.
So this is what it looks like when a mild-mannered, liberal community activist goes “nuclear.â€
President Barack Obama didn’t use the “n†word – or even the “r†word, “reconciliation.†But he made it clear he’s ready to go to Democrat DefCon4, give the partisan launch codes and inflict Obamacare on the American people at any political cost.
In defending his decision to go nuclear, Obama talked about insurance company “abuses.†He talked about premium hikes in California. He talked about a sick mom in Wisconsin. He even talked (in extremely modest ways) about Republican ideas like tort reform and fighting Medicare fraud.
What Obama didn’t mention was Massachusetts.
In fact, despite having given (based on my calculations) some 57,432 speeches, press conferences, pep talks, pillow talks and interpretive dances on health care in the past 12 months, Obama somehow manages to leave us out of nearly every conversation.
This is telling, because we’re the one state already glowing in the radioactive haze of Romneycare, aka “ObamaCare: The Beta Version.â€
Shouldn’t Obama have been bragging yesterday about bringing the benefits of Bay State reform to all of America?
As we prepare to wander into this coming nuclear winter of hyper-partisan politics – one in which we’re almost certain to see widespread political fatalities among congressional Democrats – I have to ask: If bringing Massachusetts-style “universal coverage†to America is worth this terrible price, why doesn’t Obama at least mention us once in awhile?
Maybe he thinks of us as the Manhattan Project of medical insurance reform. Too top secret to discuss. More likely, it has something to do with the nightmare results of this government-run debacle. Here are a few “highlights†of the current status of the Obamacare experiment in Massachusetts:
It’s exploding the budget: Our “universal†health insurance scheme is already $47 million over budget for 2010. Romneycare will cost taxpayers more than $900 million next year alone.
It’s killing us on costs: Average Massachusetts premiums are the highest in the nation and rising. We also spend 27 percent more on health care services, per capita, than the national average. Those costs, contrary to what we were promised, have been going up faster here than nearly everywhere else.
It’s creating bizarre marketplace mutations: In Massachusetts, ObamaCare 1.0 is such a mess our governor is talking about imposing draconian price controls. He’s even suggested going to “capitation,†a system where doctors get a fixed amount of money per patient – and then that’s it. Which means it would become in your doctor’s financial interest never to see you again.
All this damage to the taxpayers, the insured and the responsible business owners . . . and for what?
The percentage of uninsured Bay State residents has gone from around 6 percent to around 3 percent.
Natural experiments are rare in politics, but few are as instructive as the prototype for ObamaCare that Massachusetts set in motion in 2006. The bills for “universal coverage” are now coming due, and it appears the state political class is prepared to do lasting damage to one of America’s top-flight health-care systems.
Last month, Democratic Governor Deval Patrick landed a neutron bomb, proposing hard price controls across almost all Massachusetts health care. State regulators already have the power to cap insurance premiums, which Mr. Patrick is activating. He also filed a bill that would give state regulators the power to review the rates of hospitals, physician groups and some specialty providers. Those that are deemed too high “shall be presumptively disapproved.”
Mr. Patrick ad-libbed that he had “a whole bunch of pals here who are in the health-care field, and I saw the color drain out of their faces.” Little wonder. The administered prices of Medicare and Medicaid already shift costs to private patients while below-cost reimbursement creates balance-sheet havoc among providers. Now the governor wants to import these distortions to save the state’s heavily subsidized insurance program as costs explode.
It doesn’t even count as an irony that former Governor Mitt Romney (like President Obama) sold this plan as a way to control spending. As with all new entitlements, the rolling cost crisis began almost immediately. For fiscal 2010 taxpayer costs are $47 million over budget, in part due to the recession, and while the $913 million Mr. Patrick requested for 2011 is a 5% increase over 2010, spending has grown on average 6.7% per year.
Meanwhile, average Massachusetts insurance premiums are now the highest in the nation. Since 2006, they’ve climbed at an annual rate of 30% in the individual market. Small business costs have increased by 5.8%. Per capita health spending in Massachusetts is now 27% higher than the national average, and 15% higher even after adjusting for local wages and academic research grants. The growth rate is faster too.
We have some strong disagreements on the numbers,†President Obama said after Rep. Paul Ryan (R., Wis.) concluded his devastating critique of the Democrats’ budget claims, “but I don’t want to get too bogged down.†In the ensuing debate, what became clear is that the Democrats just don’t have an answer to Ryan’s arguments. They ducked, dodged, and changed the subject repeatedly, because Ryan’s numbers themselves are unimpeachable.
The Democrats are touting an estimate from the Congressional Budget Office that their health-care bill would reduce the deficit by around $130 billion over the next ten years. What Ryan pointed out — and what no Democrat even attempted to counter — is that this is because the legislation front-loads tax hikes and Medicare cuts and defers costs, forcing the CBO to score ten years of offsets with only six years of spending. Looked at on a level playing field, the true ten-year cost of the bill is $2.3 trillion rather than $950 billion, Ryan said.
Then he brought up another gimmick: The bill is full of double-counting. “Savings†are counted as offsets for new health-care spending and at the same time set aside to pay for future entitlements. For instance, the Democrats claim $52 billion in offsets as a result of increasing Social Security payroll-tax revenues. But these dollars are already claimed for future Social Security beneficiaries. They can’t pay for both. The Democrats take another $72 billion in premiums intended to fund a new long-term-care program and count them as offsets for other spending. Ryan pointed out that Senate Budget Committee chairman Kent Conrad has called this “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.â€
Perhaps most important, Ryan confronted the Democrats with the issue of the “Doc Fix†— a separate bill that would have added $371 billion to the Democrats’ legislation if it hadn’t been stripped out. The Doc Fix would have prevented Medicare reimbursements to doctors from plummeting by 21 percent, a drop that Congress put into the bill to improve its CBO score but never planned to allow, most political observers agree.
In 301 AD, the Roman emperor Diocletian imposed price controls on most commodities and professions in the empire. The penalty for raising prices was death. Yet the controls failed utterly, leading to shortages, more inflation and the near collapse of the imperial economy.
Now, nearly two millennia later, President Obama seems determined to demonstrate how little we’ve learned.
Yesterday, the president proposed giving the federal government the power to regulate insurance premiums. Undoubtedly, this will be politically popular — at least, in the short term. Insurance companies aren’t exactly America’s most loveable industry. Recent premium hikes will result in real hardship for many Americans.
There is, of course, a certain arrogance in the assumption that Obama, Nancy Pelosi and a bevy of government bureaucrats know exactly what something should cost. No doubt, as soon as they finish setting insurance prices, they’ll move on to negotiating Tracy McGrady’s contract renewal.
But more important, attempts to control prices by government fiat ignore basic economic laws — and the result could be disastrous for the American health-care system.
Most people think of prices and costs as the same thing, but from an economic perspective, they aren’t. Prices are what people pay to receive a good or service. Costs are what it takes to produce the goods and services. In this case, limiting the prices that insurers can charge does nothing about the underlying costs of health care.
Insurers unable to charge more for an increasingly expensive product can be expected to trim costs in one of two ways:
They can drop their most expensive customers — in this case, the sickest, who consume the most health care. Many companies are already doing this, a major source of dissatisfaction with the health-care system. In fact, the president wants to prohibit companies from doing this.
They can cut back on their reimbursement rates to hospitals and physicians. But neither doctors nor hospitals, any more than insurance companies, are willing to operate at a loss. If payments fall below their costs, they’ll simply stop taking patients. One only has to look at government programs like Medicare and Medicaid to see how this works.
Medicare already reimburses at roughly 80 cents on every dollar of actual costs. Medicaid pays even less. As a result, more than a third of physicians have closed their practices to Medicaid patients; 12 percent no longer accept Medicare patients.
If private insurers begin similarly to cut back their reimbursements, some hospitals may go out of business, and some doctors may close their practices. Retirement in Florida may begin to look a lot better than another snowy New York winter. Others will stop accepting insurance or set up “concierge” practices in which they see only a small number of privately paying patients.
Thus, price controls on insurers will ultimately lead to rationing — the lack of available health-care goods and services.
Ask yourself this question: What is the one health system characteristic every developed country has, except the United States?
If you answered: Every other country has made health care a right, you’re wrong. Citizens of Canada have no right to any particular health care service. They have no right to a CT scan or open heart surgery. They don’t even have a right to a place in line. The 100th Canadian waiting for heart surgery isn’t entitled to the 100th surgery.
If you answered: Every other country guarantees access to care, regardless of ability to pay, you’re wrong again. In Britain people routinely go to the private sector and pay out-of-pocket for care they cannot get from the state. Canadians come to this country. In both cases, lack of ability to pay is a barrier to care.
Answer: Other countries have nationalized, or collectivized, their health care systems. So far we have not.
In the United States, whether you have insurance at all, what kind of insurance you have, where you get it, what price you pay — these decisions are primarily made by individuals and employers in the private sector. In other countries, they are made by government.
In terms of democratic theory, in other countries people get to vote on what kind of insurance you have and you get to vote on theirs. In the United States the health insurance of most working-age families is based on individual choice, not public choice.
As for day-to-day operations, the U.S. health care system is actually far more similar to the systems of other countries than most people realize. Critics tend to exaggerate the role of out-of-pocket payment in the United States and minimize its role in other countries. In fact, U.S. citizens pay about 13¢ out of pocket every time they spend $1 on health care and this is well below the OECD average (20¢) and even and below that of Canada (15¢)!
Despite all the claims about how different the U.S. system is from the Canadian system, the two systems are far more similar than they are different. Both countries pay doctors the same way; both rely heavily on third-party payment; and both ration by waiting. In Canada, when people see a doctor, the visit is free. In the U.S., it’s almost free. In fact, it’s probably fair to say that there are fewer differences between U.S. and Canadian health care on average than there are among the various types of health plans within the U.S.
The real issue, then, is not about health care at all. It’s about collectivism. It’s about whether we are going to make decisions in one-sixth of our economy privately or publicly. It’s about private sector institutions versus government and ultimately the ballot box.
House Speaker Nancy Pelosi said Thursday she does not have the votes to pass the Senate’s version of a health insurance bill that is now in severe jeopardy of being scrapped.
Just days ago, that was the most viable option for keeping alive President Obama’s top domestic priority, but with the election of Republican Scott Brown to the U.S. Senate in Massachusetts, the fragile coalition of Democrats has broken apart as lawmakers bicker over which portions of the $900 billion, 10-year Senate bill they will and won’t accept.
Emerging from a closed-door meeting with her caucus, the House speaker vented frustration with the massive version of the legislation.
“In its present form without any changes I don’t think it’s possible to pass the Senate bill in the House,” said Pelosi, D-Calif. “I don’t see the votes for it at this time.”
Patient advocate and health policy expert, Betsy McCaughey explains why some major parts of the Democrats healthcare reform are unconstitutional and how the overhaul puts many patients in peril, particularly the elderly.
In 2006, Massachusetts enacted a sweeping health insurance law that mirrors the legislation currently before Congress. After signing the measure, Gov. Mitt Romney (R) wrote, “Every uninsured citizen in Massachusetts will soon have affordable health insurance and the costs of health care will be reduced.” But did the legislation achieve these goals? And what other effects has it had? This paper is the first to use Current Population Survey data for 2008 to evaluate the Massachusetts law, and the first to examine its effects on the accuracy of the CPS’s uninsured estimates, self-reported health, the extent of “crowd-out” of private insurance for both children and adults, and in-migration of new Massachusetts residents.
We find evidence that Massachusetts’ individual mandate induces uninsured residents to conceal their true insurance status. Even setting that source of bias aside, we find the official estimate reported by the Commonwealth almost certainly overstates the law’s impact on insurance coverage, likely by 45 percent. In contrast to previous studies, we find evidence of substantial crowdout of private coverage among low-income adults and children. The law appears to have compressed self-reported health outcomes, without necessarily improving overall health. Our results suggest that more than 60 percent fewer young adults are relocating to Massachusetts as a result of the law. Finally, we conclude that leading estimates understate the law’s cost by at least one third, and likely more.
Our results hold important lessons for the legislation moving through Congress. As in Massachusetts, there has been no effort to estimate the cost of the private health insurance mandates that legislation would impose on individuals and employers. The costs may therefore be far greater than legislators and voters believe, while the benefits may be smaller than the conventional wisdom about Massachusetts suggests.
At 7:16 a.m., the Senate passed on a 60-39 party line vote a sweeping health care bill that will tighten insurance regulations, provide insurance for 31 million more Americans and cost $871 billion over the next decade.
“This is for my friend Ted Kennedy, aye,” said Sen. Robert Byrd as he cast his vote.
Clearly exhausted, Senate Majority Leader Harry Reid mistakenly voted no before changing his vote to yes, which got a laugh in the chamber, especially from Senate Republican Leader Mitch McConnell.
After the vote, Reid joked, “I spent a very restless night last night trying to figure out how I could show some bipartisanship and I think I was able to accomplish that for a few minutes.”
Senate Republican Jim Bunning was absent for the vote.
With Vice President Joe Biden presiding over the session, Democrats gathered in the chamber before sunrise on the day before Christmas to cast a vote long in coming but in the end, hardly a surprise, a 60-39 tally that was the fourth time in as many days that Democrats proved they could muster the winning margin.
Reid opened the Senate floor at 7 a.m. and channeled Ted Kennedy: “The work goes on. The cause endures… and yet here we are, minutes away from doing what others have tried but none have achieved.â€
Republican leader Mitch McConnell responded: “This fight isn’t over. My colleagues and I will work to stop this bill from becoming law. That’s the clear will of the American people — and we’re going to continue to fight on their behalf.â€
By Michael D. Tanner: The crystal ball is still far too cloudy to predict whether or not Obamacare will pass, but it is not too soon to make some predictions about what the future will look like if it does pass.
On Dec. 7, 1941, an announcement was made during the football game between the hometown Washington Redskins and the Philadelphia Eagles. All the generals and admirals at Griffith Stadium were instructed to report to their duty stations. Little did they know their lives would be changed forever and America would be at war, or on war footing, for the next half-century. Pearl Harbor had been attacked.
1. You Can’t Keep Your Plan Even if You Like It: The president promises you can keep your plan and doctor if you like them—polls show the overwhelming majority of Americans do—but independent analysts found Obamacare would cause a change of plan or doctor for as many as 56 percent of currently covered employees. Additionally, your doctor may not want to keep you. (See Point No. 8.)
S
We have some strong disagreements on the numbers,†President Obama said after Rep. Paul Ryan (R., Wis.) concluded his devastating critique of the Democrats’ budget claims, “but I don’t want to get too bogged down.†In the ensuing debate, what became clear is that the Democrats just don’t have an answer to Ryan’s arguments. They ducked, dodged, and changed the subject repeatedly, because Ryan’s numbers themselves are unimpeachable.
In 301 AD, the Roman emperor Diocletian imposed price controls on most commodities and professions in the empire. The penalty for raising prices was death. Yet the controls failed utterly, leading to shortages, more inflation and the near collapse of the imperial economy.
From 
House Speaker Nancy Pelosi said Thursday she does not have the votes to pass the Senate’s version of a health insurance bill that is now in severe jeopardy of being scrapped.
In 2006, Massachusetts enacted a sweeping health insurance law that mirrors the legislation currently before Congress. After signing the measure, Gov. Mitt Romney (R) wrote, “Every uninsured citizen in Massachusetts will soon have affordable health insurance and the costs of health care will be reduced.” But did the legislation achieve these goals? And what other effects has it had? This paper is the first to use Current Population Survey data for 2008 to evaluate the Massachusetts law, and the first to examine its effects on the accuracy of the CPS’s uninsured estimates, self-reported health, the extent of “crowd-out” of private insurance for both children and adults, and in-migration of new Massachusetts residents.
At 7:16 a.m., the Senate passed on a 60-39 party line vote a sweeping health care bill that will tighten insurance regulations, provide insurance for 31 million more Americans and cost $871 billion over the next decade.
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