Free Markets, Free People

health care reform


Straight Talk on Health Care

We need to face a few facts about health care reform.  Our current system of health care funding is broken.  It’s not broken because we have a free market in health care. It’s broken because we don’t.

Spending in the US health care system is essentially out of control.  The US spends almost 16% of GDP on health care.  Canada, our nearest neighbor, spends a bit more than 10%.  In western Europe, the figure is generally between 7% and 9% of GDP.  It’s something I addressed in my book a few years ago:

Why is spending so much higher in the US, with its supposedly free-market system?  Why is it, with all that spending, that regular medical coverage doesn’t exist for 40 million Americans, when, in the rest of the industrialized world, there is 100% health coverage?

Something is deeply wrong with the financing of the US health-care system.

Part of the problem is that we really don’t have a free market in health care. Individuals, by and large, don’t buy health care policies. Health insurance is employer-provided. In effect, however, this is underwritten by the US government by making health care premiums deductible for businesses, which results in billions of dollars in lost tax revenues. And then, of course, you have to throw in the $300 billion or so that the state and federal governments spend outright to provide health care.  And, of course, once you hit 65, you’re on the government’s health care gravy train, because you’ve got your Medicare, which also covers prescription drugs, now.

Why do we spend too much for health care in the US? The Heartland Institute, a public policy think-tank, has listed several reasons:

1) Government subsidies to health care increases demand by artificially lowering costs.

2) Favorable tax treatment of employer-provided health care has the same effect.

3) Lower-income people without health care must rely on emergency room health care delivery at substantially higher cost.

4) Health care buyers and sellers meet in a “market” that is heavily regulated by the government.

5) State governments increase health care costs by mandating benefit coverages.

6) State governments artificially reduce the supply of health care by requiring Certificates of Need before health care providers can expand services.

7) States interfere with the creation and operation of PPOs by fixing prices or the range of services they can offer.

So, really, we have what is, in many ways, the worst of both worlds. We have a market-based system, but one in which market incentives are minimized through regulation and subsidies. In effect, government policy bids up health care prices, while at the same time interfering with the market forces that keep a lid on prices.

It’s no wonder that more and more people are looking at single-payer, government-provided health care as an alternative to what we already have. At the very least, a single payer system would end the inefficient and fragmented ways by which health care is currently purchased.

This is not a situation we can afford to ignore for long.

We have ignored it, though–although that appears to have come to a screeching halt.

Because of various government intereferences, more than 1/3 of all health care spending is purely administrative.  By contrast, Canada’s administrative burden on health care funding is about 1%.  If we were to switch over to a single payer system, there is an excellent chance that we would, in fact, spend less money on health care than we currently do.

Are there horror stories about health care in Canada or the UK?  Sure.  There are horror stories about our system, too.  For instance, you can find stories of families that were denied coverage, and were forced in to financial disaster all the time.

Canada, of course, has the rather unique problem of being a country with 1/10 of our population being spread over an equal amount of real estate.  In that situation, if you don’t live near a major metropolitan center–and Canada only has about 10 of them, there’s a shortage of available services.  In Britain, there are terrible NHS hospitals, but there are also excellent ones.  But the same it true in the US.  If you live in, say, Houston, Ben Taub Hospital probably wouldn’t be your first choice for treatment.  M.D. Anderson, however, would.

The bottom line, however, is that a single payer system would, in fact, deliver an equal or better level of health care as we currently receive, and probably do so at a lower cost.

But there is a fundamental problem with our current debate.  We are arguing over whether we should keep the system we have, or move to a system that sets us on the path to a single-payer system.  But those aren’t the only alternatives. There is another option that is being lost in this debate.  The democrats don’t want to mention it for ideological reasons.  The Republicans don’t mention it because of…well…incompetent buffoonery, I guess.

The alternative, of course, is to make the case that our current system costs so much, and is so distorted, because of government interference.  We have a mixed system of health care funding in which the government’s intervention imposes a  wide range of unnecessary costs.  So our choice is not to keep what we have, or eliminate the administrative overhead by turning it all over to the government.  The third choice is to return to a free market in health care.

Eliminate state by state coverage mandates, which result in 50 different–and sometimes wildly so–regulatory regimes.  Eliminate federal and state laws that prevent insurers from creating nationwide plans and risk pools.  Eliminate employer health-care coverage, and personalize it, to make it personal and portable.

Here’s another idea:  allow people to buy health insurance.  That isn’t what we have now.  We have pre-paid health care.  The two things are wildly different.  For example, look at how auto insurance works.  Imagine how much your car insurance would cost if we expected our insurance to cover 80% of the cost of oil changes, tire rotation, wiper blades, new tires, regular service, etc.  But that’s precisely what we expect medical insurance to do.  And then we wonder why it costs so darn much.

We need to allow insurers to offer simple catastrophic care coverage, with varying deductibles.  That way, you can pick up the tab for your own doctor’s visits, but you don’t have to worry about bankrupting yourself if some idiot runs a stop sign and knocks you off of your motorcycle.  We need to allow anyone who wants to set up a medical savings account.  Heck, if we really want “the government” to finance it, we could offer a 100% tax credit for health care expenditures.

We don’t need the government to rescue us from the unsatisfactory state health care is in.  We can accomplish the same goals of universal coverage and lower cost, by getting the government out of health care as completely as possible.  There are so many ways we could use free markets to relieve us of the distress the current system of funding is in, that they’re almost impossible to enumerate.

And best of all, doing so would comport with the country’s traditions of freedom, and individual choice.

And one final thing.  With a real free market in health care, if there’s a problem, you’ll also get accountability.  You’ll get access to courts where you can sue a private insurer who defrauds you, or someone who gives you substandard care.  What you’ll get with a single-payer system is no recourse.  If the government turns down your procedure, or you don’t get the health care you should, or if you keel over before your slot on the waiting list comes up, there’ll be nowhere to go, and no one accountable, any more than there is now if the public schools fail to adequately educate your children.

But free market reform doesn’t even seem to be on the table.


The Unread Health Care Bill

HR3200, the House’s version of health care reform, can be found here, at the GPO’s web site, in PDF format.  All 1017 pages of it. You’ll need some time to read it.  It’s dense.  Too dense, in fact, for Congressmen to read, apparently.

Or, you can read this PDF file instead, which is a summary of the high points provided by Liberty Counsel, a conservative, pro-life legal firm, which apparently did read it. They reference the GPO’s file directly, so you can quickly track down the references they cite.  A randon selection from the critique:

• Sec. 205, Pg. 102, Lines 12-18 – Medicaid-eligible individuals will be automatically enrolled in Medicaid. No freedom to choose.

• Sec. 223, Pg. 124, Lines 24-25 – No company can sue the government for price-fixing. No “administrative of judicial review” against a government monopoly.

• Sec. 225, Pg. 127, Lines 1-16 – Doctors – the government will tell YOU what you can make. “The Secretary shall provide for the annual participation of physicians under the public health insurance option, for which payment may be made for services furnished during the year.”

• Sec. 312, Pg. 145, Lines 15-17 – Employers MUST auto-enroll employees into public option plan.

• Sec. 313, Pg. 149, Lines 16-23 – ANY employer with payroll $400,000 and above who does not provide public option pays 8% tax on all payroll.

• Sec. 313, Pg. 150, Lines 9-13 – Businesses with payroll between $251,000 and $400,000 who do not provide public option pay 2-6% tax on all payroll.

• Sec. 401.59B, Pg. 167, Lines 18-23 – ANY individual who does not have acceptable care, according to government, will be taxed 2.5% of income.

• Sec. 59B, Pg. 170, Line 1 – Any NONRESIDENT alien is exempt from individual taxes. (Americans will pay for their health care.)

• Sec. 431, Pg. 195, Lines 1-3 – Officers and employees of HC Administration (government) will have access to ALL Americans’ financial and personal records.

• Sec. 441, Pg. 203, Lines 14-15 – “The tax imposed under this section shall not be treated as tax.” Yes, it says that.

It’s actually quite an interesting read, even minus Liberty Counsels alarmist tone and worst-case-scenario suppositions.

The scary thing is…maybe they aren’t being alarmist.

Also, note the tax rates above very carefully for employers who don’t provide health insurance.  If you don’t think those rates are low enough to positively incentivize employers to dump private health coverage and turn it over to the government, then you just aren’t a very astute observer.  8% of payroll is nothing, compared to getting rid of the administrative headaches.

It’s not called “single-payer health care”.  But, objectively, that’s precisely what it is.  Private health insurance won’t be outlawed, of course.  It’ll still be perfectly legal to provide it, or acquire it.  It will just be starved to death under this plan, because employers will stop buying it.  It’ll be easier and cheaper just to push the employees over to the “public option”.

I wonder if our NHS ID cards will have our pictures on them.


The Health Care “I Told You So” Post

When your political opposition is self-destructing (even while in the majority and in control of the legislative and executive branches), most political observers would advise stepping back and allowing them to do so.

But not the Republicans. They’re going to be the “significant other” that gives this president a win on his signature issue and help him maintain both his momentum and the viability of the rest of his agenda.

The “I told you so” part of this is, as I (and many others) have said, Democrats will eventually pass something they can call “health care reform” and save the viability of Obama’s presidency. What you didn’t figure is the Republicans would be both complicit and key to that:

Sen. Olympia Snowe (R-Maine) confirmed that the three Republicans and three Democrats negotiating the Senate Finance bill are moving away from a broad-based mandate that would force employers to offer insurance. The senators instead are leaning toward a “free rider” provision that requires employers to pay for employees who receive coverage through Medicaid or who receive new government subsidies to purchase insurance through an exchange.

Snowe stressed the committee hasn’t reached a final agreement on any of the key provisions but said, “There is not a broad-based employer mandate. … There are approximately 170 million Americans that receive coverage through employers. That is a significant percentage of the population. We don’t want to undermine that or create a perverse incentive where employers drop the coverage because their employees could potentially get subsidies through the exchange.”

On the nonprofit insurance cooperative, Snowe also said no final decisions have been reached, but “it is safe to say it is probably one that will remain in the final document.”

This is what everyone who talks about it means when they say that Republicans “talk the talk but don’t walk the walk”. Here is a group, and I’d bet there are more that will sign on, who are involved in one of the biggest expansions of government undertaken since the “New Deal”. And when November of next year rolls around, this is the party that is going to want you to believe they are all for less government, less spending and less government intrusion.

And they’ll have this to point to as proof. [/sarc]

The reason the GOP is a shrinking party isn’t because it is the party of the Southern white male. It’s because no believes their nonsense any longer.  Sometimes being the party of “no” is the right thing to do.

[Welcome RCP readers]

~McQ


Podcast for 26 Jul 09

In this podcast, Bruce, Michael, and Dale discuss the controversy over the Obama presser on Monday, and the state of health care reform’s passage in the Congress.

The direct link to the podcast is unavailable this week due to technical problems, so you’ll need to listen to it at BTR.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.


The Health Care Presser

I loved a tweet that Jon Henke sent out last night during the Obama health care press conference.  It had me laughing – “Shorter Obama: you’re either with us or against us”.

In reality the press conference was the retelling of the same old nonsense. We’re going to expand the insurance system, require everyone be taken, no pre-existing conditions, no dropping you or denial of service. We’ll pay for it by finding some savings in waste, fraud and abuse, do health care delivery better than anyone else has ever done it, tax the rich and do it all – every bit of it – cheaper than it’s being done now, because we’re the government and we’re the experts in efficiency.

Tell me that wasn’t the crux of the presser?  Anyone left wondering why the majority of Americans are skeptical?

And of course we had the usual canards out there. The claim that preventive medicine is cheaper than medicine as it is being practiced now. Take a moment to read this post by a doctor who lays out the con in minute detail. Here’s another view. Here’s a fact no one seems willing to deal with – the vast majority of all health care costs come in the last 6 months of life.  No one has beaten death yet.  Ergo that fact isn’t going to change unless the entity with the money refuses to pay up.  So while preventive care may extend life, the cost of preventive care is more expensive and the end result remains the same.

As for paying for it,  the whole appeal, of course, was to give the allusion to the middle class that he and the Dems were all for soaking the rich to cover the cost, even talking about how taxing millionaires met his “principle” on that.

But as Mickey Kaus points out, you have to listen carefully:

I don’t want that final one-third of the cost of health care to be completely shouldered on the backs of middle-class families who are already struggling in a difficult economy. And so if I see a proposal that is primarily funded through taxing middle-class families, I’m going to be opposed to that …

Kaus points out that those two words, in “Wash-speak” mean he’s open to a middle-class tax to pay for the “new” and “improved” health care (49% isn’t “primarily”, right?).

And then there’s the dawning understanding around much of the country that this isn’t about reforming health insurance at all (something that might be appealing to most).  It is about a fundamental change in how health care is delivered. As the Republicans have begun saying, it is “experimenting” with your health care.

Can I guarantee that there are going to be no changes in the health-care delivery system? No. The whole point of this is to try to encourage changes that work for the American people and make them healthier. And the government already is making some of these decisions. More importantly, insurance companies right now are making those decisions. And part of what we want to do is to make sure that those decisions are being made by doctors and medical experts based on evidence, based on what works. Because that’s not how it’s working right now. That’s not–that’s not how it’s working right now.

Yes the government is already making some of those decisions. And the unfunded liabilities of the government system threaten to bankrupt us.

But the point remains that peppered all through the statement and answers was the phrase “health care delivery”.  That is one of the things driving down the approval ratings on the legislation.  Its one thing to say, “hey we’re going to eliminate pre-existing conditions, portability issues and denial of service while making sure everyone has insurance”.   It is an entirely different thing to say “we’re going to tinker with and change the way your health care is delivered”.

Now suddenly the government is in territory few want it in.  And that’s the overreach that Obama and the Democrats have committed that is driving the health care legislation approval numbers down.  Which gets us into the politics of this.

Obama said “this isn’t about me”.  But in fact it is all about him and maintaining his credibility.  But his problem, as usual, is he’s outsourced his signature agenda item to Congress.  Peter Wehner discusses the result:

On virtually every important issue — from the stimulus package, to cap-and-trade, to health care, to taxes, and more — Obama is ceding the agenda to the barons on Capitol Hill. And they will lead him over a cliff.

Why this is taking place is hard to know. It may be that Obama and Company are over-learning the lessons of the Clinton and Carter years, when relations with Democrats on the Hill were strained. It may be that Obama doesn’t like to immerse himself in the nitty-gritty of policy and is more comfortable deferring to those who do. It may be that the liberals on the Hill actually reflect what Obama himself — whose record as a legislator was, after all, markedly liberal — favors. It may be that Obama’s lack of experience is now showing through. Or it might be a combination of all four.

Regardless of the cause, the result will be damaging, and maybe even debilitating, to the Obama administration. All the campaign’s promises — about practicing a new brand of politics, finding middle ground, embodying hope and change — seem so old, so dated, and so cynical. Obama is turning out to be Salesman-in-Chief. But what he’s trying to peddle — an unusually liberal agenda and legislation that ranges from ineffective to downright harmful and reflects the desires of leading Congressional Democrats rather than the needs of the country — ain’t selling.

No, it’s not, thus the reason for the presser. As I pointed out yesterday, it is obvious at points he has no idea what is or isn’t in the bill. But what he does have a firm grasp on are his talking points, even if, as the days and weeks go by, they’re shot away or, at best, left hanging tattered and limp.

Speaking of politics, I love the attempt to take on the Republicans as the bad guys (one of the main Democratic talking points for days has been that the Republicans have brought no alternative to the table) and then this:

So, for example, in the HELP committee in the Senate, 160 Republican amendments were adopted into that bill, because they’ve got good ideas to contribute.

I’m not noting this with particular approval, I’m simply noting how this gives lie to the talking point.

To conclude, for anyone who has looked into the issue and followed the debate, such that is has been, Obama’s performance was anything but impressive. It was a mix of tired talking points and a con job – careful rhetoric that implied one thing while really saying something else (the middle-class tax increase being a perfect example).

But that doesn’t mean that some form of health care legislation won’t pass. I think, unfortunately, it will. And that is all about him and politics and he knows it. So do the Democrats. Clinton, Reagan, and GW Bush all passed their signature legislation before the first August recess in their first term. That isn’t going to happen in Barack Obama’s case. But he and the Democrats know that something they can call health care reform must pass or, as Obama is reported to have said, it will destroy his presidency.

To our eternal sorrow the fact that he’s right means the Democrats will do whatever is necessary to pass something to maintain his viability.

~McQ


Obama: Selling a Pig in a Poke

Does it bother you that a president who is out pushing like hell to pass a bill that will fundamentally change the way we receive health care, and apparently most now believe that change will be negative, apparently isn’t familiar with what he’s pushing?

With the public’s trust in his handling of health care tanking (50%-44% of Americans disapprove), the White House has launched a new phase of its strategy designed to pass Obamacare: all Obama, all the time. As part of that effort, Obama hosted a conference call with leftist bloggers urging them to pressure Congress to pass his health plan as soon as possible.

During the call, a blogger from Maine said he kept running into an Investors Business Daily article that claimed Section 102 of the House health legislation would outlaw private insurance. He asked: “Is this true? Will people be able to keep their insurance and will insurers be able to write new policies even though H.R. 3200 is passed?” President Obama replied: “You know, I have to say that I am not familiar with the provision you are talking about.”

It’s only a question that’s been in the news for a week after it was raised in an Investors Business Daily editorial. That’s the entire reason the blogger brought it up. Salesmanship 101 – know your product. He’s been so busy flapping his jaws about how we have to pass this now that he hasn’t even taken the time to understand what “this” is.

IBD said the provision would, in effect, outlaw private insurance.

The Heritage Foundation did a little digging into this provision to figure out the real impact it will have. Here’s what they have to say:

[T]he House bill does not outright outlaw private individual health insurance, but it does effectively regulate it out of existence. The House bill does allow private insurance to be sold, but only “Exchange-participating health benefits plans.” In order to qualify as an “Exchange-participating health benefits plan,” all health insurance plans must conform to a slew of new regulations, including community rating and guaranteed issue. These will all send the cost of private individual health insurance skyrocketing. Furthermore, all these new regulations would not apply just to individual insurance plans, but to all insurance plans. So the House bill will also drive up the cost of your existing employer coverage as well. Until, of course, it becomes so expensive that your company makes the perfectly economical decision to dump you into the government plan.

President Obama may not care to study how many people will lose their current health insurance if his plan becomes law, but like most Americans, we do. That is why we partnered with the Lewin Group to study how many Americans would be forced into the government “option” under the House health plan. Here is what we found:

* Approximately 103 million people would be covered under the new public plan and, as a consequence, about 83.4 million people would lose their private insurance. This would represent a 48.4 percent reduction in the number of people with private coverage.

* About 88.1 million workers would see their current private, employer-sponsored health plan go away and would be shifted to the public plan.

* Yearly premiums for the typical American with private coverage could go up by as much as $460 per privately-insured person, as a result of increased cost-shifting stemming from a public plan modeled on Medicare.

So it ends up not killing the private insurance business outright with a bullet through the brain, but instead, by slow strangulation. Same effect, but it will just take much longer. Legislate rules and requirements which will up the cost of private insurance to the point that the economic incentive is to dump it in favor of the cheaper public option.

Like your plan? Like your doctor?

Too bad.

But the man who promised you could keep both couldn’t be bothered to become “familiar” with this particular “provision”.

~McQ


Making Health Care “Better”?

If health care is so darn terrible here, how does we manage rankings like this?

[T]he World Health Organization ranked the United States No. 1 out of 191 countries for being responsive to patients’ needs, including providing timely treatments and a choice of doctors.

Isn’t that the essence of good care?

Oh, but it is expensive and not everyone has insurance.

Well they have a plan to take care of the latter problem. Get it or government will fine you and assign you:

When you file your taxes, if you can’t prove to the IRS that you are in a qualified plan, you’ll be fined thousands of dollars — as much as the average cost of a health plan for your family size — and then automatically enrolled in a randomly selected plan (House bill, p. 167-168).

And of course the way to make it less expensive is to use less of it, right?

It’s one thing to require that people getting government assistance tolerate managed care, but the legislation limits you to a managed-care plan even if you and your employer are footing the bill (Senate bill, p. 57-58). The goal is to reduce everyone’s consumption of health care and to ensure that people have the same health-care experience, regardless of ability to pay.

Paying for all of this will be a breeze:

The price tag for this legislation is a whopping $1.04 trillion to $1.6 trillion (Congressional Budget Office estimates). Half of the tab comes from tax increases on individuals earning $280,000 or more, and these new taxes will double in 2012 unless savings exceed predicted costs (House bill, p. 199). The rest of the cost is paid for by cutting seniors’ health benefits under Medicare.

There’s plenty of waste in Medicare, but the Congressional Budget Office estimates only 1 percent of the savings under the legislation will be from curbing waste, fraud and abuse. That means the rest will likely come from reducing what patients get.

You did get that line in there where it says “the rest of the cost is paid for by cutting senior’s health care benefits?” And, as Dale pointed out, they have a wonderful idea of how to manage that:

One troubling provision of the House bill compels seniors to submit to a counseling session every five years (and more often if they become sick or go into a nursing home) about alternatives for end-of-life care (House bill, p. 425-430). The sessions cover highly sensitive matters such as whether to receive antibiotics and “the use of artificially administered nutrition and hydration.”

This mandate invites abuse, and seniors could easily be pushed to refuse care.

Because they’re usually in such robust physical and mental health at the time such “counseling” would take place that they’re sure to stick up for themselves and further treatment.

No matter how tight the cost though, you can count on layer upon layer of bureaucracy finding the money necessary to exist and flourish:

Shockingly, only a portion of the money accumulated from slashing senior benefits and raising taxes goes to pay for covering the uninsured. The Senate bill allocates huge sums to “community transformation grants,” home visits for expectant families, services for migrant workers — and the creation of dozens of new government councils, programs and advisory boards slipped into the last 500 pages.

Is it any wonder Obama wants all this passed quickly? It’s the jobs portion of his “stimulus” plan. Oh, wait, that can’t be right because none of this begins to take effect until 2013 (except the taxes, which begin in 2011), one year safely on the other side of the next presidential election. In fact it won’t be fully in effect until 2018.

So what’s the rush again?

This is a legislative turkey that needs badly to be led to the chopping block. We don’t have the problem we’re being told we have, nor is there such wide-spread dissatisfaction with what we have that the government must step in.

The most recent ABC News/Washington Post poll (June 21) finds that 83 percent of Americans are very satisfied or somewhat satisfied with the quality of their health care, and 81 percent are similarly satisfied with their health insurance.

There is absolutely no rush for any of this except politically. It comes under the heading of “using political capital while you have it” and right now Obama has it. The problem, and the reason for the rush, is there a hole in the political capital bag and the assets are draining out much more quickly than they thought they would.

I’m all for having them hold the bag and watch it empty without giving them the opportunity to wreck a system that for the vast majority of us seems to be working pretty well. If they want to do anything, they can remove the insurance mandates, pass the legislation to allow a real free insurance exchange to establish itself and get the hell out of the way.

~McQ


Health Care Warning Bells

Just a few of the gems beginning to come out of the Democratic health care reform proposals.

Keith Hennessey wonders if the Democrats really want to tax the uninsured because as the bill is structured a) not everyone will have insurance and b) not everyone will be able to afford it meaning c) they pay a tax. He gives 2 examples:

* Bob is a single 50-year old non-smoking small business employee who makes $50K per year before taxes and does not have health insurance.
* Bob cannot afford a $1,600 bare bones health insurance policy, much less a $3K — $5K policy.
* Bob would get no subsidies under this bill, and his employer would face no penalty for not providing him with health insurance.
* Bob would end up without health insurance and would have to pay $1,150 more in taxes.

Now, what you can expect is not that Democrats would stick with the provisions of the bill, but instead they’d find some way to fold Bob into the program further raising the cost.

Same with Freddy and Kelsey:

* Freddy and Kelsey are a 40-year old couple with two kids. They own and run a small tourist shop in Orlando, Florida.
* They are the only employees, and earn a combined $90K per year.
* They cannot afford even an inexpensive health insurance plan, and so the House bill would make them pay $2,050 in higher taxes.

So given those figures (and be sure to read the whole post by Hennessey) and the estimate of 8 million falling into this category, obviously the bill will cost more than projected.

Second point.

When we first saw the paragraph Tuesday, just after the 1,018-page document was released, we thought we surely must be misreading it. So we sought help from the House Ways and Means Committee.

It turns out we were right: The provision would indeed outlaw individual private coverage. Under the Orwellian header of “Protecting The Choice To Keep Current Coverage,” the “Limitation On New Enrollment” section of the bill clearly states:

“Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day” of the year the legislation becomes law.

So we can all keep our coverage, just as promised — with, of course, exceptions: Those who currently have private individual coverage won’t be able to change it. Nor will those who leave a company to work for themselves be free to buy individual plans from private carriers.

While assuring everyone that the same choices we now have would still in the system, this was discovered a mere 16 pages into the 1,000 page monstrosity. I’m sure there are other gems to be had in there as well. But the obvious point here is this puts people who make the choice, for instance, to go into business for themselves, in a situation where they are unable to buy health insurance from a private carrier, whether they want too or not. Of course, that will go a long way toward killing any private market in that niche of the insurance industry. And where will these people eventually end up? On a subsidized public plan, of course.

If that’s not bad enough, there’s the planned expansion of Medicaid. What the federal government plans to do is expand insurance coverage under Medicaid by 11 to 20 million people depending on which percentage above the poverty rate the final bill has. But states pay a large portion of Medicaid expenses. The House version calls on the fed to pick up all the expenses while promising to enact big savings in the program. The Senate version has the fed paying the full freight for 5 years. The latter is more likely to be the version that would pass simply because they can hold the “cost” numbers down a bit by doing so.

But not so in the states where the mandated expansion of Medicaid will end up having to be funded by each state’s taxpayers.

Keep these in mind as you hear cost figures bandied about by the blowhards on the Hill. They give used car salesmen a bad name.

~McQ


Democrats Unveil Their “Affordable” Health Care Plan

And yes, that’s right, just because Democrats put “affordable” in the title doesn’t mean it is anything close to being affordable (unless another trillion in spending is something you find affordable). In fact, you can almost count on the opposite being true.

Another vitally important point to keep in mind is that trillion we’re batting around like we’re talking about spending ten bucks, is a government estimate. Anyone remember the government estimate about the cost of Medicare and how that turned out?

The Democrats are claiming the CBO “scored” this bill and it came up under the “affordable” column.  But the RNC says the CBO didn’t actually score the language in the bill:

In the second paragraph of CBO’s letter, it says, “”It is important to note, however, that those estimates are based on specifications provided by the tri-committee group rather than an analysis of the language released today.” So they scored what Democrats asked them to score. Not the actual bill.

Yes, in this infernal rush to get a bill out, we obviously couldn’t be patient enough to have the CBO score what the bill actually said vs. what the committees declared the bill would say. And we all know how honest our Congress is about such things, don’t we? Last but not least, the politics of the thing. Here’s a graph to show you how the planned appropriation of your money will take place:

houseDemHC Note carefully when the costs will actually begin to kick in. Yes, when Obama is safely in his second term and hopefully, at least as the Democrats reason, still with a Democrat majority Congress (since both the 2010 and 2012 Congressional elections shouldn’t be effected). Note the slope of the curve after that. Philip Klein, who put the chart together, explains:

It’s important to keep in mind that the most costly aspects of the legislation involve providing subsidies to individuals to purchase health care ($773 billion) and to expand Medicaid ($438 billion), but it takes several years for those provisions to kick in. As you can see from the chart below, that means that the costs start out relatively modest but ramp up over time. In the first three years of the plan the cost of the subsidies and Medicaid expansion is just $8 billion; in the first five years, it’s $202 billion; but in the last five years, it’s $979 billion. Put another way, 17 percent of the spending comes in the first five years, while 83 percent comes in the second five years. What this means is that the American people see $1 trillion over 10 years and they think that means the bill would cost about $100 billion a year — but the reality is more than double that. In the final year of the CBO estimates, 2019, the spending hits $230 billion.

Another important note – at the end of 10 years, that line on the graph isn’t going to drop to zero. It’s going to continue to climb. That’s “affordable?” If so, Democrats have given new meaning to the word.  And all of it to be paid for by taxing the rich.

Yes, in the midst of an economic crisis, the con artists in Washington are at it again.  They’ve co-opted “affordable” to sell their snake oil, ignored the impact of such a bill in a weak economy but carefully weighed the politics of it, and have decided that funding it on the back of “the rich” won’t have any adverse consequences when it comes to the economy and its health.

You can see this train wreck coming from miles and miles away, can’t you?

~McQ


The Magic Of Paying For Healthcare

I‘m so glad that the Democrats have settled on how to pay for their latest government boondoggle even if it is the same old formula:

House Democrats will ask the wealthiest Americans to help pay for overhauling the health care system with a $550 billion income tax increase, the chairman of the tax-writing Ways and Means Committee said Friday.

The proposal calls for a surtax on individuals earning at least $280,000 in adjusted gross income and couples earning more than $350,000, said the chairman, Representative Charles B. Rangel of New York.

It would generate about $550 billion over 10 years to pay about half the cost of the legislation, Mr. Rangel said. As the proposal envisions it, the rest of the cost would be covered by lower spending on Medicare, the government health plan for the elderly, and other health care savings.

Tax the rich and squeeze the health care industry with lower Medicare payments. Sounds like a very “healthy” and stable way of paying for “health care reform” doesn’t it?  A perfectly sure way to accomplish the stated Obama priorities of “expanding health insurance coverage to virtually all Americans and curtailing the steep rise in the cost of medical care while improving patient outcomes.”

Expand coverage, cut payments and improve outcomes.

Yup – “I believe!”

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