From OneNewsNow

Monstrous and a defiance of the will of the American people – that’s how one pro-family group is describing the health bill that House Democrats pushed through Saturday night by a vote of 220 to 215.

The President of Concerned Women for America, Wendy Wright, says the bill will ration care and punish citizens who don’t have government-mandated insurance.

Wright declares ”this montrous bill” will erode the best health care system in the world.

According to Wright, “In exchange for insurance, we’ll lose access to proper health care. We’ll lose health care providers who will leave the profession.”

She says the bill would “create multiple bureaucracies that will control Americans’ health care, penalize Americans for not buying a product, fine Americans if a government agent decides their health care plan is not ‘government approved’ and may force Americans to buy government mandated insurance that funds objectionable procedures.”

Wright notes that although an amendment passed to bar federal funding of abortion, Democrat leaders refused to guarantee that it will be in the final bill.  According to Wright, “the vote on the amendment may have been a ruse to gain pro-life Democrats vote on the bill.”

Meanwhile, House Republican leader, John Boehner, also issued a statement condemning the bill.

He said “Americans want a common-sense approach to health care reform, not Speaker Nancy Pelosi’s 2,032-page government takeover that increases costs, adds to our skyrocketing debt, destroys jobs with tax hikes and new mandates, and cuts seniors’ Medicare benefits.”

Boehner noted that Republicans have offered an alternative health care reform package which offers lower costs and expands access to quality care-without adding to the “crushing debt Washington has placed on our children and grandchildren.”

From the Wall Street Journal

The health bill that House Speaker Nancy Pelosi is bringing to a vote (H.R. 3962) is 1,990 pages. Here are some of the details you need to know.

What the government will require you to do:

• Sec. 202 (p. 91-92) of the bill requires you to enroll in a “qualified plan.” If you get your insurance at work, your employer will have a “grace period” to switch you to a “qualified plan,” meaning a plan designed by the Secretary of Health and Human Services. If you buy your own insurance, there’s no grace period. You’ll have to enroll in a qualified plan as soon as any term in your contract changes, such as the co-pay, deductible or benefit.

• Sec. 224 (p. 118) provides that 18 months after the bill becomes law, the Secretary of Health and Human Services will decide what a “qualified plan” covers and how much you’ll be legally required to pay for it. That’s like a banker telling you to sign the loan agreement now, then filling in the interest rate and repayment terms 18 months later.

On Nov. 2, the Congressional Budget Office estimated what the plans will likely cost. An individual earning $44,000 before taxes who purchases his own insurance will have to pay a $5,300 premium and an estimated $2,000 in out-of-pocket expenses, for a total of $7,300 a year, which is 17% of his pre-tax income. A family earning $102,100 a year before taxes will have to pay a $15,000 premium plus an estimated $5,300 out-of-pocket, for a $20,300 total, or 20% of its pre-tax income. Individuals and families earning less than these amounts will be eligible for subsidies paid directly to their insurer.

• Sec. 303 (pp. 167-168) makes it clear that, although the “qualified plan” is not yet designed, it will be of the “one size fits all” variety. The bill claims to offer choice—basic, enhanced and premium levels—but the benefits are the same. Only the co-pays and deductibles differ. You will have to enroll in the same plan, whether the government is paying for it or you and your employer are footing the bill.

• Sec. 59b (pp. 297-299) says that when you file your taxes, you must include proof that you are in a qualified plan. If not, you will be fined thousands of dollars. Illegal immigrants are exempt from this requirement.

• Sec. 412 (p. 272) says that employers must provide a “qualified plan” for their employees and pay 72.5% of the cost, and a smaller share of family coverage, or incur an 8% payroll tax. Small businesses, with payrolls from $500,000 to $750,000, are fined less.

Eviscerating Medicare:

In addition to reducing future Medicare funding by an estimated $500 billion, the bill fundamentally changes how Medicare pays doctors and hospitals, permitting the government to dictate treatment decisions.

• Sec. 1302 (pp. 672-692) moves Medicare from a fee-for-service payment system, in which patients choose which doctors to see and doctors are paid for each service they provide, toward what’s called a “medical home.”

The medical home is this decade’s version of HMO-restrictions on care. A primary-care provider manages access to costly specialists and diagnostic tests for a flat monthly fee. The bill specifies that patients may have to settle for a nurse practitioner rather than a physician as the primary-care provider. Medical homes begin with demonstration projects, but the HHS secretary is authorized to “disseminate this approach rapidly on a national basis.”

A December 2008 Congressional Budget Office report noted that “medical homes” were likely to resemble the unpopular gatekeepers of 20 years ago if cost control was a priority.

• Sec. 1114 (pp. 391-393) replaces physicians with physician assistants in overseeing care for hospice patients.

• Secs. 1158-1160 (pp. 499-520) initiates programs to reduce payments for patient care to what it costs in the lowest cost regions of the country. This will reduce payments for care (and by implication the standard of care) for hospital patients in higher cost areas such as New York and Florida.

• Sec. 1161 (pp. 520-545) cuts payments to Medicare Advantage plans (used by 20% of seniors). Advantage plans have warned this will result in reductions in optional benefits such as vision and dental care.

• Sec. 1402 (p. 756) says that the results of comparative effectiveness research conducted by the government will be delivered to doctors electronically to guide their use of “medical items and services.”

Questionable Priorities:

While the bill will slash Medicare funding, it will also direct billions of dollars to numerous inner-city social work and diversity programs with vague standards of accountability.

• Sec. 399V (p. 1422) provides for grants to community “entities” with no required qualifications except having “documented community activity and experience with community healthcare workers” to “educate, guide, and provide experiential learning opportunities” aimed at drug abuse, poor nutrition, smoking and obesity. “Each community health worker program receiving funds under the grant will provide services in the cultural context most appropriate for the individual served by the program.”

These programs will “enhance the capacity of individuals to utilize health services and health related social services under Federal, State and local programs by assisting individuals in establishing eligibility . . . and in receiving services and other benefits” including transportation and translation services.

• Sec. 222 (p. 617) provides reimbursement for culturally and linguistically appropriate services. This program will train health-care workers to inform Medicare beneficiaries of their “right” to have an interpreter at all times and with no co-pays for language services.

• Secs. 2521 and 2533 (pp. 1379 and 1437) establishes racial and ethnic preferences in awarding grants for training nurses and creating secondary-school health science programs. For example, grants for nursing schools should “give preference to programs that provide for improving the diversity of new nurse graduates to reflect changes in the demographics of the patient population.” And secondary-school grants should go to schools “graduating students from disadvantaged backgrounds including racial and ethnic minorities.”

• Sec. 305 (p. 189) Provides for automatic Medicaid enrollment of newborns who do not otherwise have insurance.

For the text of the bill with page numbers, see www.defendyourhealthcare.us.

—Ms. McCaughey is chairman of the Committee to Reduce Infection Deaths and a former Lt. Governor of New York state.

From The Hill

As the suicidal Democratic congressmen proceed to rubber-stamp the Obama healthcare reform despite the drubbing their party took in the ’09 elections, the president trotted out the endorsements of the AMA and the AARP to stimulate support. But these — and the other endorsements — his package has received are all bought and paid for. Here are the deals:

· The American Medical Association (AMA) was facing a 21 percent cut in physicians’ reimbursements under the current law. Obama promised to kill the cut if they backed his bill. The cuts are the fruit of a law requiring annual 5-6 percent reductions in doctor reimbursements for treating Medicare patients. Bravely, each year Congress has rolled the cuts over, suspending them but not repealing them. So each year, the accumulated cuts threaten doctors. By now, they have risen to 21 percent. With this blackmail leverage, Obama compelled the AMA to support his bill … or else!

· The AARP got a financial windfall in return for its support of the healthcare bill. Over the past decade, the AARP has morphed from an advocacy group to an insurance company (through its subsidiary company). It is one of the main suppliers of Medi-gap insurance, a high-cost, privately purchased coverage that picks up where Medicare leaves off. But President Bush-43 passed the Medicare Advantage program, which offered a subsidized, lower-cost alternative to Medi-gap. Under Medicare Advantage, the elderly get all the extra coverage they need plus coordinated, well-managed care, usually by the same physician. So more than 10 million seniors went with Medicare Advantage, cutting into AARP Medi-gap revenues.

Presto! Obama solved their problem. He eliminates subsidies for Medicare Advantage. The elderly will have to pay more for coverage under Medigap, but the AARP — which supposedly represents them — will make more money. (If this galls you, join the American Seniors Association, the alternative group; contact sbarton@americanseniors.org This e-mail address is being protected from spambots. You need JavaScript enabled to view it .)

· The drug industry backed ObamaCare and, in return, got a 10-year limit of $80 billion on cuts in prescription drug costs. (A drop in the bucket of their almost $3 trillion projected cost over the next decade.) They also got administration assurances that it will continue to bar lower-cost Canadian drugs from coming into the U.S. All it had to do was put its formidable advertising budget at the disposal of the administration.

· Insurance companies got access to 40 million potential new customers. But when the Senate Finance Committee lowered the fine that would be imposed on those who don’t buy insurance from $3,500 to $1,500, the insurance companies jumped ship and now oppose the bill, albeit for the worst of motives.

The only industry that refused to knuckle under was the medical device makers. They stood for principle and wouldn’t go along with Obama’s blackmail. So the Senate Finance Committee retaliated by imposing a tax on medical devices such as automated wheelchairs, pacemakers, arterial stents, prosthetic limbs, artificial knees and hips and other necessary accoutrements of healthcare.

So these endorsements are not freely given, but bought and paid for by an administration that is intent on passing its program at any cost.

From FOX News

In a victory for President Obama, the Democratic-controlled House narrowly passed landmark health care legislation Saturday night to expand coverage to tens of millions who lack it and place tough new restrictions on the insurance industry. Republican opposition was nearly unanimous.

The 220-215 vote cleared the way for the Senate to begin a long-delayed debate on the issue that has come to overshadow all others in Congress.

A triumphant Speaker Nancy Pelosi likened the legislation to the passage of Social Security in 1935 and Medicare 30 years later — and Obama issued a statement saying, “I look forward to signing it into law by the end of the year.”

“It provides coverage for 96 percent of Americans. It offers everyone, regardless of health or income, the peace of mind that comes from knowing they will have access to affordable health care when they need it,” said Rep. John Dingell, the 83-year-old Michigan lawmaker who has introduced national health insurance in every Congress since succeeding his father in 1955.

In the run-up to a final vote, conservatives from the two political parties joined forces to impose tough new restrictions on abortion coverage in insurance policies to be sold to many individuals and small groups. They prevailed on a roll call of 240-194.

Ironically, that only solidified support for the legislation, clearing the way for conservative Democrats to vote for it.

The legislation would require most Americans to carry insurance and provide federal subsidies to those who otherwise could not afford it. Large companies would have to offer coverage to their employees. Both consumers and companies would be slapped with penalties if they defied the government’s mandates.

Read the rest of the story

Click here to see how your representative voted.

From the Wall Street Journal

Epic new spending and taxes, pricier insurance, rationed care, dishonest accounting: The Pelosi health bill has it all.

Speaker Nancy Pelosi has reportedly told fellow Democrats that she’s prepared to lose seats in 2010 if that’s what it takes to pass ObamaCare, and little wonder. The health bill she unwrapped last Thursday, which President Obama hailed as a “critical milestone,” may well be the worst piece of post-New Deal legislation ever introduced.

In a rational political world, this 1,990-page runaway train would have been derailed months ago. With spending and debt already at record peacetime levels, the bill creates a new and probably unrepealable middle-class entitlement that is designed to expand over time. Taxes will need to rise precipitously, even as ObamaCare so dramatically expands government control of health care that eventually all medicine will be rationed via politics.

Yet at this point, Democrats have dumped any pretense of genuine bipartisan “reform” and moved into the realm of pure power politics as they race against the unpopularity of their own agenda. The goal is to ram through whatever income-redistribution scheme they can claim to be “universal coverage.” The result will be destructive on every level—for the health-care system, for the country’s fiscal condition, and ultimately for American freedom and prosperity.

Read the rest of the column

From Heritage

by Robert A. Book, Ph.D.

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.

From the Wall Street Journal

How good is Sen. Max Baucus’s health reform bill? So good that Democrats have made sure some of the most costly provisions don’t apply to their own states.

The Senate Finance Committee is gearing up for a final vote next week, and Chairman Baucus now appears to have the Democratic votes to pass his bill. Getting this far has of course meant cutting deals, and those deals, it turns out, are illuminating. The senators are all for imposing “reform” on the nation, so long as it doesn’t disadvantage their constituents.

A central feature of the Baucus bill is the vast expansion of state Medicaid programs. This is necessary, we are told, to cover more of the nation’s uninsured. The provision has angered governors, since the federal government will cover only part of the expansion and stick fiscally strapped states with an additional $37 billion in costs. The “states, with our financial challenges right now, are not in a position to accept additional Medicaid responsibilities,” griped Democratic Ohio Gov. Ted Strickland.

Poor Mr. Strickland. If only he lived in . . . Nevada! Senate Majority Leader Harry Reid, who is worried about losing his seat next year, worked out a deal by which the federal government will pay all of his home state’s additional Medicaid expenses for the next five years. Under the majority leader’s very special formula, only three other states—Oregon, Rhode Island and Michigan—qualify for this perk, on the grounds, as Mr. Reid put it recently on the Senate floor, that they “are suffering more than most.”

Continue reading the article

From the Wall Street Journal

The major provisions of ObamaCare already have been tried. They’ve led to increased costs and reduced access to care.

By Peter Suderman – Supreme Court Justice Louis Brandeis famously envisioned the states serving as laboratories, trying “novel social and economic experiments without risk to the rest of the country.” And on health care, that’s just what they’ve done.

Like participants in a national science fair, state governments have tested variants on most of the major components of the health-care reform plans currently being considered in Congress. The results have been dramatically increased premiums in the individual market, spiraling public health-care costs, and reduced access to care. In other words: The reforms have failed.

New York is exhibit A. In 1993, the state prohibited insurers from declining to cover individuals with pre-existing health conditions (“guaranteed issue”). New York also required insurers to charge those enrolled in their plans the same premium, regardless of health status, age or sex (“community rating”). The goal was to reduce the number of uninsured by making health insurance more accessible, particularly to those who don’t have employer-provided insurance.

It hasn’t worked out very well, according to a Manhattan Institute study released last month by Stephen T. Parente, a professor of finance at the University of Minnesota and Tarren Bragdon, CEO of the Maine Heritage Policy Center. In 1994, there were just under 752,000 individuals enrolled in individual insurance plans, or about 4.7% of the nonelderly population. This put New York roughly in line with the rest of the U.S. Today, that percentage has dropped to just 0.2% of the state’s nonelderly. In contrast, between 1994 and 2007, the total number of people insured in the individual market across the U.S. rose to 5.5% from 4.5%.

Read the rest of the column

From the Wall Street Journal

In President Obama’s Washington, medical specialists are slightly more popular than the H1N1 virus. Compared to bread-and-butter primary care doctors, specialists cost more to train and make more use of expensive procedures and technology—and therefore cost the government more money. Even so, the quiet war Democrats are waging on specialists is astonishing.

From Senate Finance Chairman Max Baucus’s health-care bill to changes the Administration is pushing in Medicare, Democrats are systematically attacking specific medical fields like cardiology and oncology. With almost no scrutiny, they’re trying to engineer a “cheaper” system so that government can afford to buy health care for all—even if the price is fewer and less innovative ways of extending and improving lives.

Take a provision in the Baucus bill that would punish any physician whose “resource use” is considered too high. Beginning in 2015, Medicare would rank doctors against their peers based on how much they cost the program—and then automatically cut all payments by 5% to anyone who falls into the 90th percentile or above. In practice, this rule will only apply to specialists.

Read the rest of the column.

From OneNewsNow

A healthcare expert says the healthcare bill drafted by Senate Finance Committee Chairman Max Baucus (D-Montana) creates new taxes and cuts to the Medicare program to reduce the cost to the federal government, but does nothing to reduce the cost of healthcare in the family budget.

The Wall Street Journal says the Baucus bill would break all 50 state budgets by permanently expanding Medicaid, the joint state-federal program for the poor. The bill would for the first time make Medicaid available to childless adults and also extend healthcare insurance subsidies to people up to 400 percent of the federal poverty level.

Under the senator’s plan — known as “America’s Healthy Future Act” — individuals who fail to pay the $1,900 fee for not buying health insurance could be charged with a misdemeanor and face up to a year in jail or a $25,000 fine.

Read the rest of the article

From the Wall Street Journal

By Pete Du Pont — President Obama addressed Congress two weeks ago on the issue of health care, and on the same day an Associated Press GfK poll showed that the proportion of Americans who strongly approve of the way he is doing his job has fallen from 41% in December to 24% now. And the percentage of people who strongly disapprove of his performance has risen from 6% to 35%.

Those serious declines no doubt have to do with many issues–economic decline, the massive spending increases (enacted and proposed) of $6.5 trillion over the next decade, the coming massive tax increases that are presidential and congressional priorities, and currently most important, the proposed governmental takeover of health care. On that matter, more than 1.3 million people have signed and sent to Congress the Salem Radio Network’s Free Our Health Care Now! petition to make sure individuals, not the national government, make their health care decisions. (Disclosure: The petition incorporated information form the National Center for Policy Analysis, of which I am chairman.)

But the Democratic congressional leadership, led by Sen. Max Baucus of Montana, has now offered a bureaucratic, government-intrusive health care proposal. The details change daily as the bill works its way through the Finance Committee, which Mr. Baucus chairs, for there are more than 500 proposed amendments being considered. But the bill would start off by imposing annual fees of $6.7 billion on health insurance companies, $4 billion on medical device producers, $2.3 billion on drug manufacturers and $750 million on clinical laboratories, all of which would surely be passed on to consumers in higher prices. The insurance companies’ $6.7 billion fees alone would come to some 60% of the industry’s after tax earnings.

And then American families who do not have health insurance–the people the Democrats claim they’re trying to help–would be assessed finds of between $750 to $1,900 a year. All this reflects Congress’s simple objective: government rather than individual control of our health care.

Read the rest of the column

From the Washington Times

Trying to capitalize on voters’ anger at lawmakers this summer, Republicans on Wednesday launched bids in both the House and Senate aiming to force Democrats to let them have at least three days to read bills before they’re put up for a vote.

In the House, Rep. Greg Walden, Oregon Republican, filed a petition to force a vote on a bill with bipartisan backing that would require all non-emergency legislation to be posted online, in its final form, 72 hours prior to a vote.

“At my public meetings and events, people always want to know, ‘Have you read these bills? Why don’t they give you time to read these bills?’ ” Mr. Walden said. “Members of Congress, the public, and the press all deserve the time to read these bills before we have to vote on them on the House floor.”

Democrats in the Senate Finance Committee, meanwhile, defeated a GOP amendment requiring a 72-hour waiting period and a full cost estimate before the final committee vote on the proposed health care overhaul bill now being considered by the panel.

Only one Democrat – Sen. Blanche Lincoln of Arkansas – voted for the measure, which would have delayed a vote on the final bill for about two weeks in order to allow the Congressional Budget Office to complete its analysis on the cost and implications of the legislation. Instead, the panel passed an alternative amendment that would require the committee to post the full bill online in “conceptual” rather than legal language, as well as a CBO cost estimate.

The minority party accusing the majority of rushing bills through Congress is nothing new. But Democrats have attracted special attention this year with a series of last-minute votes on bills that exceed more than 1,000 pages.

Read the rest of the story

By John Goodman — Remember what Barack Obama said about Hillary Clinton’s health plan?  “Hillary’s health care plan forces everyone to buy insurance, even if you can’t afford it…and you pay a penalty if you don’t.”  Well, that idea is back, says John C. Goodman, President, CEO and the Kellye Wright Fellow with the National Center for Policy Analysis.

Welcome to Obama Care ala Max Baucus.  The specifics of the bill are apparently changing hourly and there are 564 amendments being proposed.  However, the core features are likely to remain intact, says Goodman.  Like other versions of the health reform before Congress, this bill will:

• Require every American to buy a health insurance plan that will be designed in Washington and (through time) be shaped and molded by special interest pressures or pay a hefty tax.
• Subsidize health insurance for young people by taking about $500 billion away from Medicare and Medicaid.
• Cause several million (mostly moderate-income) seniors to lose their coverage under Medicare Advantage.
• Cause millions of families to move from private coverage (which allows them to see a broad array of doctors) to Medicaid and S-CHIP programs (where health care access is much more limited).
• Cause millions of American families to lose their current private coverage and obtain insurance in an artificial market (an Exchange), where insurers will have perverse incentives to underprovide to the sickest patients.
• Nationalize the private health insurance marketplace by effectively outlawing a real market for health care risks.

But unlike the other bills, explains Goodman, this bill has two additional harsh features:

• A 35 percent tax on private health insurance — initially targeting “Cadillac” plans, but eventually reaching all plans.
• An employer play-or-pay mandate that is effectively an implicit tax as high as 26 percent or more on the wages of middle-income workers.

Source: John C. Goodman, “Senator Baucus Declares War on the Middle Class,” John Goodman’s Health Policy Blog, September 23, 2009.

By Representative John Kline

I have spent a lot of time these last few weeks meeting with workers, small business owners, health care professionals and hardworking families from rural and suburban Minnesota. What I hear from them is what my colleagues are hearing from Americans all across this great nation — a sense of uncertainty about the health care legislation moving through Congress like a runaway freight train.

They ask: What will happen to my coverage, and my choice of doctors? Will I have to stand in line to receive treatment? Or get approval from someone in Washington before getting a knee replacement or filling a prescription for the latest diabetes medication?

Access to quality care and the comfort of a familiar physician aren’t the only things on Minnesotans’ minds. With trillion dollar price tags becoming almost commonplace in Washington, American families are worried about what all this spending means for their jobs — and their children — and their children’s children.

No wonder Americans are scared. Health care reform is being imposed upon them, rather than developed with them, and the potential costs are far too high. And sadly — monetary costs are only part of the picture.

Many are concerned that Democrats’ plans may cost patients the right to see their family doctor or have any input into a life-altering — if not life-saving — medical treatment. They also fear, and rightly so, that it may cost them their jobs, a devastating prospect in an economy that has already lost 6.9 million jobs since this recession began.

When it comes to health care reform, Minnesotans do not want speeches from their elected leaders, they want solutions. When the president urged Congress to pursue bipartisan solutions, majority leadership in Congress responded with ardent defense of partisan legislation crafted behind closed doors. At more than 1,000 pages, it is complicated, convoluted, and quite simply will not work.

It’s time to press the “reset” button.

This issue is far too important to be determined by partisan battles. There are solid, commonsense ideas members of all political stripes can coalesce around as we seek to stop unnecessary political bickering and formulate a solution that puts the American people ahead of government ambition.

For example, most of my colleagues recognize that not all high school and college graduates are immediately able to find a job that offers health care coverage after graduation. By allowing dependents to remain on their parents’ health policies up to the age of 25, the number of uninsured Americans could be reduced by up to 7 million. That is a pretty good start if you ask me.

It is also important to recognize the role employers, large and small, play in providing insurance. I think we can all see the value in helping the 10 million uninsured Americans who are eligible, but not enrolled in, an employer-sponsored plan get health care coverage by encouraging employers to move to opt-out, rather than opt-in rules.

I also think we should help small employers reduce the administrative costs of providing coverage to their employees by establishing a new small business tax credit.

Washington faces an enormous opportunity. The President can work with Congress — Democrats and Republicans — in pursuit of areas in which we have found agreement, or he can focus on the areas that divide us in a continued embrace of the politics of the past. I agree with the president that the status quo is unsustainable.

The folks running Washington should hit the “reset” button on health care reform and stopping the government takeover that threatens American jobs.

John Kline of Lakeville, a Republican, represents Minnesota’s 2nd Congressional District in the U.S. House of Representatives.

Posted from National Center for Policy Analysis

By John Goodman — Consider this:

Proposition One:  No health insurance company should be able to turn down any applicant or charge a higher premium because of health status.

Proposition Two:  The federal government should tell you what health insurance you must have, where you will get it and what price you must pay and levy steep fines on you and your employer if you fail to comply.

Proposition One is what people thought they heard Barack Obama say during the election, and they voted for it. Proposition Two is what they are now hearing from Congress and they’re not buying it. Yet what has never been said publicly is that Two follows from One. That is, it is almost impossible to have One (which people seem to want) without Two (which they don’t want).

Can Barack Obama (with all his oratorical skills) convince people that One and Two are related and that they have to accept Two in order to have One? I doubt it.

As I have said many times, almost no one on Capitol Hill or in the Obama Administration understands health care as a complex system. Invariably, they think they can enact ideas that are popular and avoid ideas that are unpopular without understanding that they are all linked. It is only when politicians sit down with economists who are trained to analyze complex systems that it dawns on them that they are in a very unpleasant trap. They have been in that trap for the past eight months, and no one seems to know how to get out of it. The only thing worse would be for the Republicans to jump in the same trap with them.

Here’s how we get from Prop One to Prop Two in 10 hard-to-disconnect steps:

1. If we know we can buy health insurance after we get sick with no increase in premiums, none of us will want to pay premiums for insurance while we are healthy. Yet, if only the sick are paying premiums, the entire insurance system will collapse.
2. So to prevent collapse, there must be a requirement that people buy in when they are healthy.
3. Now if the requirement is a general mandate — with lots of coverage options — we are back to a variation of the problem in 1. People will choose scaled down, inexpensive insurance when they are healthy and then switch to comprehensive, expensive insurance after they get sick.
4. So to prevent a meltdown similar to the one described in 1, choices must be eliminated and there must be a standard (government-defined) benefit package which all individuals are required to buy and all insurers are required to sell. People won’t be allowed to buy anything less generous and no insurer would be foolish enough to offer anything more generous.
5. Now suppose there is a health insurance Exchange where people get their insurance, but insurance can also be sold outside the Exchange. In particular, imagine a special deal offered to the Iron Man’s Club (requirement: swim a mile, run 10 miles and bicycle 20 miles). Soon, word would get out that anyone who can qualify for Iron Man membership can get the standard benefit package for a really cheap price. In this, and in other ways, insurers outside the Exchange would siphon away the healthiest people leaving the Exchange with the sickest, most costly enrollees.
6. So to prevent the death spiral the conditions in 5 would lead to, insurance outside the Exchange would have to be outlawed and insurance within the Exchange highly regulated. (See below.)
7. How can you force people to buy insurance? Since cattle prods are too impractical and prison cells are too expensive, about the only practical tool is a fine. And if you want it to work, the fine needs to be near (and maybe even above) the premium people have to pay.
8. Of course, there is this problem: How can we know whether anyone has insurance? The easiest way — without a new bureaucracy — is to rely on the income tax system. Make people show proof of insurance at the time they file their income taxes.
9. Trouble is: People file tax returns once a year and most people who are currently uninsured are uninsured for less than a year. So a logical way to get to people with greater regularity is to use the employers as an enforcement mechanism.
10. Once employers are involved, however, we run into the unfortunate fact that most people believe that premium payments are an addition to wages, not a substitute for them. So to the question, “should we mandate that you buy insurance or that your employer buy it for you,” the employer tends to win hands down. Result: both an individual mandate and an employer mandate seem inevitable.

Notice the cyclical pattern in all of this. You distort incentives in a complex system and you get perverse behavior. To prevent that, you distort incentives some more and you get other kinds of perverse behavior. The more you intervene, the greater the need for even more intervention.

So what’s the answer?  We need to reject Proposition One and find a better way of solving that problem.