Byron York’s count has it at 209 “no”, 204 “yes”, with 18 undecided. David Dayden at FDL puts the count at 191 “yes”, 206 “no” (205-209 with leaners), with 17 undecided.
As you can imagine, the pressure on the remaining 17 or 18 is going to be enormous. Bart Stupak claims it has been a “living hell”.
Still nothing out of the CBO which means a Saturday vote is unlikely.
Obama’s interview with Brett Baier of Fox is likely to do nothing to change minds about health care, just as his speech in Ohio had little effect. He may as well have gone to Australia as this is shaping up. But it is clear he and the Democrats want to avoid any talk about “process” and continue to wave it away as something the American people just aren’t concerned with. Big mistake.
And although he wouldn’t own up to it in the Baier interview, Obama has told others that the fate of his presidency is on the line with this vote.
All it took for Dennis Kucinich to cave was a 45 minute ride on Airforce One. The liberal Ohio Democrat has found a way to rationalize his change of mind.
If you don’t think this is having an effect throughout the land, just remind yourself of the Scott Brown race, where Brown ran for liberal lion and chief health care reform advocate Teddy Kennedy’s seat as the “41st vote against health care”. Then cast your eyes west and note that Barbara Boxer, another Senate liberal is vulnerable as well.
Speaking of California Senators, Dianne Feinstein’s “National Insurance Rate Authority” has been dropped from the reconciliation bill. Since it has nothing to do with budgetary matters, it can’t be included. If this monstrosity passes, look for her to attempt to add it at another time as an amendment to some other Senate bill.
And Code Red suspects two new “yes” votes for the bill, from California Democratic Reps Dennis Cardoza and Jim Costa have to do with announced water allocations for the water starved Central Valley in the state. Yesterday the Interior Department moved up the March allocation, something never done in the past. A “back room deal” for their votes?
One of the things Baier did in his interview is question the health of Medicare. He got the president to admit that the bill doesn’t fix the structural problems of the program. More and more medical providers are recognizing that problem and opting out of taking Medicare patients because they claim they can’t afford them. And if Medicare is in bad shape, Medicaid is in worse shape. As if to emphasize that point, drug store chain Walgreens has announced that after April 16th, it will no longer take new Medicaid patients.
The point, of course, is this “reform” does nothing to address the structural problems of the two government run systems which are at the core of the health care cost problem in the US.
Last, but not least, the Attorney General of Virginia has announced the state’s intention to sue the federal government if the present health care bill is passed under the “deem and pass” rule. Virginia has already passed a law declaring it illegal for the federal government to require individuals to purchase health insurance.
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Today the Wall Street Journal asks what many of us have been asking for quite some time – why aren’t the numerous and specific warnings about the real cost and destructiveness of the proposed health care plan being heeded?
Of course the simple answer is those who are determined to take health care under the government’s purview really don’t care – they finally have the opportunity long denied them and they plan on taking advantage of it. So, much like the “science” of man-made global warming, they’ve picked their narrative, settled on it and will not entertain anything which might impede them from attaining their goal – government control of the health care market.
Those who’ve read this blog are very familiar with how Democrats have gamed the system (CBO’s statutory 10 year window) and used cheap accounting tricks (collect taxes immediately, don’t start paying benefits for 5 years – gives the appearance of bending the cost curve down) to make the case that they’re actually spending less on health care over the years and saving us from the bankruptcy they claim the status quo will eventually bring.
Another report, which I mentioned last week, carries a devastating warning about the plan being considered behind closed doors by Congressional Democrats. Yet it has received no major media exposure.
It is the Centers for Medicare and Medicaid Services (CMMS) report. And chief actuary Richard Foster is very candid about the impact of what Congress is planning. Not the smoke and mirror show Congress puts out there, but a peek at the reality of what Congress is proposing:
Richard Foster, the chief actuary for the Centers for Medicare and Medicaid Services, reports that under his analysis national health spending will rise under the bills by $222 billion over the next 10 years. In other words, ObamaCare really does “bend the cost curve”—up.
Even that estimate exists only on paper, as Mr. Foster has the honesty to admit. Because “most of the coverage provisions would be in effect for only six of the 10 years of the budget period, the cost estimates shown in this memorandum do not represent a full 10-year cost for the proposed legislation,” he writes. The report is punctuated by phrases like “unrealistic” and “doubtful,” and Mr. Foster adds that “the scope and magnitude of these changes are such that few precedents exist for use in estimation.”
Let’s stop right here with the obvious point to be made. The $222 billion, as mentioned, is the estimate for the next 10 years. However, as Foster points out, the spending would occur in only 6 of those 10 years. So that spending is offset by 4 years of revenue collection. If we remove that buffer and simply take 6 into 222 and then multiply it by 10, we’re most likely a bit closer to the real spending number than the contrived one – $370 billion, a difference of a mere $148 billion. Or, in reality, the $222 is a number that was tweaked to ensure when it was added to the other numbers the total fell below the threshold of $900 billion – the point at which it was claimed the cost curve would be bent upward. Had Congress found that to get to the number they needed they would have to collect taxes for 10 years and not provide benefits for 8 years, that’s how the bill would have been written.
It was never really about actually bending the cost curve down – it was all about creating the perception that the cost curve was being bent down, nothing more.
And there’s more to understand about that $222 billion number:
That $222 billion is a net figure, even after accounting for the fact that most of the newly insured—18 million people—will be dumped into Medicaid, “where provider payment rates are well below average.” And for the fact that ObamaCare is “paid for” only in the sense that Medicare’s payments to doctors are assumed in the bill to be cut by more than 20% this spring and even deeper after that, which will never happen in practice.
Mr. Foster adds that other planned Medicare cuts would damage doctors and hospitals: “Over time, a sustained reduction in payment updates, based on productivity expectations that are difficult to attain, would cause Medicare payment rates to grow more slowly than, and in a way that was unrelated to, the providers’ costs of furnishing services to beneficiaries.” This is how price controls would work in practice, even as Medicare has hit its spending targets only four times in the last 25 years.
Again, we know that Congress plans a “doc fix” which will amend the law to keep the 20% cut from taking place this year. And there’s nothing, given the history of this program, that argues that 20% cut will ever take place. It is a figure based on an assumption that will most likely never happen. Note well the last sentence – with an addition of 18 million new Medicaid insured, how many times in the next 25 years do you supposed Medicaid will hit its spending targets? You might also want to keep in mind that is mostly a federally mandated program administered by the states who share the cost. What will this addition of 18 million new insured do to state budgets – especially if the assumed cuts in payments are never made?
But let’s say Congress, somewhere along the line, finds the intestinal fortitude to cut those payments to providers as they say they are. What would be the impact?
He says many providers will be forced to stop accepting patients who are insured by the government, as opposed to those who have private coverage “with relatively attractive payment rates.” The resulting two-tier health-care system “should be considered plausible and even probable initially.”
If they cut, those patients they bring on may not be able to find a health care provider, so the patients suffer. If they don’t make the cuts, spending goes through the roof and the taxpayer suffers. It’s a lose/lose. But what should be patently obvious to anyone reading all of this is the $222 billion net spending claim by Congress for this particular part of the health care reform bill is as bogus as their promise of transparency.
Just delving into the particulars of this one portion of the bill should disabuse any objective person of the belief that what is being proposed is going to cost less than what we presently have. It is all a wretchedly wrought political façade designed to gain your support for long enough to pass this monstrosity. And my guess is should it pass, we’ll all be poorer and eventually sicker for its passage.
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That’s a truly stunning number. 90 million will be on either SCHIP or Medicaid (not Medicare … Medicaid) if the Senate Finance version of health care becomes ObamaCare according to the Heritage Foundation:
But of those 29 million with new insurance coverage, almost half (14 million), will get their coverage through the welfare programs Medicaid and the State Children’s Health Insurance Program (SCHIP). That is equivalent to adding every resident of Ohio and Nevada to the welfare rolls.
In other words, for half of those Americans who are being promised health reform, they are going to be stunned to find themselves in a welfare office applying for Medicaid. Under the current baselines for Medicaid and the State Children’s Health Insurance Program (SCHIP), there will be 76 million individuals served by these programs for at least some part of the year in 2019. If the SFC proposal becomes law, the number on Medicaid/SCHIP will top 90 million.
So why does the government want to push so many people into SCHIP and Medicaid asks Heritage? Because it is cheaper than providing them with competitive (and private) health care coverage (and access). Medicaid pays about 20 to 25% less than private insurance. As you might imagine then, it is hard to find doctors or hospitals which accept Medicaid patients. The obvious question then is how are those who do going to handle this huge influx of patients? The obvious answer is “not very well”. Shorter office visits and longer waits for appointments are inevitable.
And here’s another hidden truth:
The majority of individuals moved into Medicaid will be young and healthy. Keeping them on welfare rolls will shift even more costs to individuals and families buying private health insurance, as doctors and hospitals recoup their losses from Medicare/SCHIP by charging more to the privately insured. In effect, the congressional policy seems to be to expand dependency by discriminating against individuals based on their income.
Emphasis mine. With the addition, then, of a public option – the Democrats “single payer” Trojan Horse – companies would begin dumping employees coverage in favor of a cheaper “fine” for doing so. The rest is fairly inevitable. “Choice and competition” would then become redefined post-modern terms having nothing to do with their traditional meanings.
I listened to Sen. Judd Gregg yesterday talking about legislative tipping points. He said that at some point in the life of a bill, its passage become inevitable. He says some form of health care legislation is going to pass and Democrats will use whatever parliamentary tricks necessary to do so. That’s now beyond question. What its final form will be is the only question. That said, it’s worth remembering the words of Cheri Jacobus when considering the final form of the bill and what passage of this monstrosity will eventually mean to our freedoms and liberty:
A little bit of government control over health care requires even more government control over healthcare in order to make it all “work.”
Of course that’s “work” as defined by government which has no relevance whatsoever to cost, efficiency or quality. Especially when they are in full control. The unfunded future liabilities of current government programs make that abundantly clear. So given their track record you have to ask: how did they suddenly become the experts in how to make this system better? Counter-intuitive, isn’t it?
One-third of the country on medical welfare. It just staggers the mind. The rhetorical questions, being studiously ignored by the media and Congress, abound – who will pay for this? What choice will we really have? Where is the real competition? By what right do you make us participate in this (“right”, not power)? Why can’t we opt out? Etc.
I think we all know the answers.
As I think about last night’s speech by President Obama, two words kept coming to mind: partisan and combative. The speech was highly partisan, even though he gave lip-service to bi-partisanship. And I thought he was needlessly combative – calling people liars and describing those who disagree in less than flattering terms.
It was not his finest hour. Nor was it a particularly good speech. It seemed to go on forever and that is usually a sign that it isn’t holding the attention of the audience.
As I figured, since I was at a loss as to what else he could do, he attempted to repackage the same old proposals that the country has been rejecting and called it “new and improved”. He promised details, but there were scant few. And that was particularly true in his attempt to describe how he’d pay for the mess.
Let’s look at some quotes:
There are now more than thirty million American citizens who cannot get coverage.
I’m wondering what happened to the 17 million “Americans” that Democrats and Obama have consistently claimed were uninsured. Where did the 47 million uninsured go? Is this an acknowledgment that they’ve been purposely pumping the numbers up for quite some time?
Well the time for bickering is over. The time for games has passed. Now is the season for action.
This is what I mean about needlessly combative. Those who attended townhalls and other gatherings to voice their opinions and protest what the Democrats were trying to pass do not consider what they did to be “bickering” nor do they feel they were engaged in “games”. Those gaming this were the Democrats who tried their hardest to pass this monstrosity without the benefit of debate, without anyone being able to read and digest it and without Republican participation.
That is gaming the system. There’s no rush to do this and pretending there is also falls under “gaming”.
My health care proposal has also been attacked by some who oppose reform as a “government takeover” of the entire health care system. As proof, critics point to a provision in our plan that allows the uninsured and small businesses to choose a publicly-sponsored insurance option, administered by the government just like Medicaid or Medicare.
So let me set the record straight. My guiding principle is, and always has been, that consumers do better when there is choice and competition.
But it has never been Obama’s guiding principle – not when he insists that “choice” and “competition” can only be achieved by introducing a government run entity into the mix while declining to consider other options.
Remove the regulation that prohibits health care insurance providers from selling across state lines, remove the mandates that require the insured to buy coverage they don’t want or need and facilitate the removal of health care insurance from under employers into the open market. All of those moves – which would require little in the way of tax dollars and government intrusion – would actually deliver choice and competition while driving insurance costs down.
Now, I have no interest in putting insurance companies out of business. They provide a legitimate service, and employ a lot of our friends and neighbors. I just want to hold them accountable. The insurance reforms that I’ve already mentioned would do just that. But an additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange. Let me be clear – it would only be an option for those who don’t have insurance. No one would be forced to choose it, and it would not impact those of you who already have insurance. In fact, based on Congressional Budget Office estimates, we believe that less than 5% of Americans would sign up.
And most experts say that 5% would not be enough to keep such a system fiscally sound and it would eventually have to turn to the government for subsidy. Want a real insurance exchange? See my comments above.
That’s why under my plan, individuals will be required to carry basic health insurance – just as most states require you to carry auto insurance. Likewise, businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers. There will be a hardship waiver for those individuals who still cannot afford coverage, and 95% of all small businesses, because of their size and narrow profit margin, would be exempt from these requirements. But we cannot have large businesses and individuals who can afford coverage game the system by avoiding responsibility to themselves or their employees. Improving our health care system only works if everybody does their part.
Mandatory health insurance – something he said he didn’t believe in during his campaign. So a young person who would prefer to pay for his health care as needed now no longer has a choice.
Key word – choice. Remember Obama’s “guiding principle”. Well he violates it right there. You no longer have a choice. And remember, in the bill now on the House floor, this will involve the IRS fining you if you fail to comply.
Companies are left with no choice as well.
Some of people’s concerns have grown out of bogus claims spread by those whose only agenda is to kill reform at any cost. The best example is the claim, made not just by radio and cable talk show hosts, but prominent politicians, that we plan to set up panels of bureaucrats with the power to kill off senior citizens. Such a charge would be laughable if it weren’t so cynical and irresponsible. It is a lie, plain and simple.
Certainly there are aren’t any literal panels called “death panels” in the pending legislation, but within the structure of the bill (HR 3200) there are certainly plenty of panels which will be determining what constitutes “best care”. The obvious logical argument then says, if they are there to determine what constitutes “best care” and are using the reimbursement mechanism to encourage their recommendations be followed and the refusal to reimburse if they aren’t, then it isn’t at all incorrect to logically conclude that “best care” when it comes to the elderly may conflict with the desired care the family and doctor want to render the patient.
That argument gets to Obama’s claim that he would prevent any bureaucrat, government or insurance, from getting in between you and your doctor.
So is what those are saying about “death-panels” “a lie, plain and simple”? Or is the lie to be found in the entrails of HR 3200 and in the glib assurances of Obama?
As an aside – is a president calling for “civility” really being civil when he calls those who disagree with him liars in a speech before a joint session of Congress?
There are also those who claim that our reform effort will insure illegal immigrants. This, too, is false – the reforms I’m proposing would not apply to those who are here illegally.
See my post on Joe Wilson. He yelled “you lie” for a reason.
To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage affordable for those without it. The public option is only a means to that end – and we should remain open to other ideas that accomplish our ultimate goal. And to my Republican friends, I say that rather than making wild claims about a government takeover of health care, we should work together to address any legitimate concerns you may have.
Once again the combative and dismissive of the right. This was not a speech that really welcomed Republicans into the process. And, I found it amusing when he tried to imply the Republicans weren’t a part of the process because they’d refused to participate, Republican members of Congress waved the three bills they’ve submitted in the House for all to see.
First, I will not sign a plan that adds one dime to our deficits – either now or in the future. Period. And to prove that I’m serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don’t materialize. Part of the reason I faced a trillion dollar deficit when I walked in the door of the White House is because too many initiatives over the last decade were not paid for – from the Iraq War to tax breaks for the wealthy. I will not make that same mistake with health care.
Second, we’ve estimated that most of this plan can be paid for by finding savings within the existing health care system – a system that is currently full of waste and abuse. Right now, too much of the hard-earned savings and tax dollars we spend on health care doesn’t make us healthier. That’s not my judgment – it’s the judgment of medical professionals across this country. And this is also true when it comes to Medicare and Medicaid.
The stated cost is $900 billion. That’s before the CBO looks at it. But of course the CBO can’t look at it until it is written legislation. But the CBO has already dismissed claims that saving of the amount Obama is claiming can be achieved by “finding savings” in “waste and abuse”.
And isn’t it telling that Obama admits that the system he now runs – Medicare – is “currently full of waste and abuse”. If eliminating fraud and abuse is so easy, one would assume a) there’d be none now or b) he could direct waste and abuse be ended now and those savings accrued immediately.
This is a hand-wave at fiscal responsibility. It is a glib nothing which he can stretch into a claim the cost of his proposal is “covered”.
Also remember that the front end of all these plans are loaded with collections, but no health care reform. Reform doesn’t kick in until 2013 – after Obama hopes to be safely reelected. But in the intervening years, we’ll begin to pay for it. Consequently we’ll have 10 years of money and only 7 or 8 years of reformed health care to pay for in that time frame. That means costs will explode after the 10th year and add to the deficit. Point? His proposal will add heavily to the deficit but not until he’s well out of office.
Knowing seniors were very wary of his plans, and he was losing their support, he attempted to win them back:
In fact, I want to speak directly to America’s seniors for a moment, because Medicare is another issue that’s been subjected to demagoguery and distortion during the course of this debate.
More than four decades ago, this nation stood up for the principle that after a lifetime of hard work, our seniors should not be left to struggle with a pile of medical bills in their later years. That is how Medicare was born. And it remains a sacred trust that must be passed down from one generation to the next. That is why not a dollar of the Medicare trust fund will be used to pay for this plan.
And in his next breath he says:
The only thing this plan would eliminate is the hundreds of billions of dollars in waste and fraud, as well as unwarranted subsidies in Medicare that go to insurance companies – subsidies that do everything to pad their profits and nothing to improve your care. And we will also create an independent commission of doctors and medical experts charged with identifying more waste in the years ahead.
These steps will ensure that you – America’s seniors – get the benefits you’ve been promised. They will ensure that Medicare is there for future generations. And we can use some of the savings to fill the gap in coverage that forces too many seniors to pay thousands of dollars a year out of their own pocket for prescription drugs. That’s what this plan will do for you.
Well, first, Medicare part D is the Medicare prescription drug plan, so I have no idea who all these seniors are paying “thousands of dollars a year” for drugs.
As I recall, what Obama is primarily targeting, though he is very careful not to actually mention it, is doing away with Medicare Advantage.
If you’re wondering what Medicare Advantage plans are, you can read about them here. One of the things Advantage plans pay for is prescription drugs.
And, as the website points out, “In addition, you might have to pay a monthly premium to your Medicare Advantage Plan for the extra benefits that they offer.”
I guess the Advantage plans must be considered one of those “gold-plated” plans.
Also note the promise of yet another bureaucratic panel – so, could continuing care on grandma at some point in time be considered “waste” and a different form of “care” be encouraged? Is it possible that could conflict with what you and your doctor prefer?
Again, nebulous language that can be interpreted and logically extended to mean precisely what Obama denies is in his proposal.
Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan.
This is the oldest claim in politics and the most bald-faced of its lies.
Obama mentioned demonstration projects for tort reform (and I am glad to see tort reform at least on the edge of the table). I’ve got an idea for a real demonstration project – if it is so easy to reduce the “waste and inefficiency” in Medicare and Medicaid, you have 3 years in which to do it. And once you’ve been successful and that success is unequivocally documented, then come back to us and we’ll talk about further reform.
Overall, as mentioned, not his finest speech. In fact, probably one of his poorer speechs. There was a measure of arrogance that was unattractive. There was a feeling that he wasn’t trying to convince but instead dictate. Nothing I heard last night was new. Nothing I heard last night was particularly compelling in terms of making a convincing argument for doing what he contends we must do.
Instead I heard frustration voiced in surly combativeness. That’s not the way to convince your opposition to see things your way. Leadership was again missing in a speech and moment that practically begged for it.
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More polling to consider from a Politico article:
“Seniors are one of the most attentive and engaged constituencies, especially on health care issues, and we’ve seen that in the Medicare Advantage programs,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans.
A July 31 Gallup Poll found that just 20 percent of Americans aged 65 and older believe health care reform would improve their own situation, noticeably lower than the 27 percent of 18- to 49-year olds and 26 percent of 50-to-64-year-olds who say the same.
The senior citizen problem could pose a serious problem for the 2010 election cycle.
Older Americans turn out in much higher numbers than other age groups during midterm elections. In 2006, the 55-and-older age group still had the highest voting rate of any age group, at 63 percent, even though younger voters turned out in record numbers for a midterm, according to census data. Half of all votes cast in the 2006 midterms were from voters age 50 or older, according to AARP. And one out of four were AARP members.
Of course, one of the ironies the left likes to point to is that seniors are actually saying they don’t want their socialistic, single-payer system changed. I think that’s a very lazy bit of analysis. I would instead suggest that since seniors have no choice about their socialistic, single-payer system (they’re automatically enrolled at age 65) that what the system is has nothing to do with the protest. They had no choice in the matter.
Seniors are a very tuned in group when it comes to health care because they know what they have is all they can have and the government is talking about legislation to cut that. And one of the areas targeted is the private insurance that covers the gaps Medicare doesn’t cover:
But Obama is talking about finding hundreds of billions in savings from Medicare — cuts supporters say will trim fat from the program — including slashing $156 billion in subsidies to Medicare Advantage, a privately administered Medicare program.
The cuts will also target the amount health care providers are paid to treat Medicare patients.
One of the dirty little secrets about the cost of private health care that you’ll never hear the Democrats or the Obama administration point out is the tremendous amount of cost shifting that goes on from the private sector to cover the public sector.
For every dollar of health care delivered to a Medicare patient, the government pays, on average, $.94. Medicaid only pays $0.86. However, health care providers are able to squeeze those nasty old private insurance providers for $1.34* for every dollar of health care provided. That’s how badly government has distorted the health care industry. It then has the temerity to scream that the private side is “bankrupting” us. Meanwhile it is the private side that has, for decades, been subsidizing the public side.
But back to seniors. Seniors know you don’t recover or save health care costs from healthy people. Seniors also know that they’re in the group in which most health care dollars are spent. Consequently, any savings, a stated goal of the so-called “reform” is most likely going to come from their part of the health care pie.
The proposed cuts to Medicare Advantage are real, but Democrats are also fighting full-blown myths that have gained traction, attacks claiming that reform would create government “death panels” authorizing euthanasia.
The rhetoric is designed to rattle seniors already nervous about health care
because they pay a higher percentage of their income for health care
than younger Americans and face rising costs on fixed incomes, said Jim Dau, a spokesman for AARP.
“Some are simply trying to derail health care reform by targeting seniors, by scaring them, making them, frankly, more dubious, more nervous,” said Dau.
Dau’s protest simply has no legs. The House legislation targets Medicare and talks about cuts to that system. That’s not something the protesters have made up to “rattle” seniors. Instead, it is something which exists, in writing.
And, as I point out above, if you’re a senior you don’t have to be an MIT grad to understand from where the euphemistic “savings” have to come. From the group where most of the spending occurs – duh?!
“Death-panels” and other nonsense aside, seniors have sniffed out the plan and aren’t happy with it. And, again, if you look at the rooms in which these protests are taking place, there are a tremendous number of grey heads evident.
So, we have independents (below) not happy with this power grab in the health care area and we have seniors obviously not happy. Are Democrats paying attention at all or, like Dau, do they plan to wave it all off as opposition dirty tricks and pretend all will work out for the best after they ram this through?
2010 is looking like a lot more fun than I believed it would be.
[*] Those numbers came from Betsy McCoy, former Lt. Gov of NY, in an interview. McCoy is a Senior Fellow at the Hudson Institute and a patient advocate.
At least not the Medicaid portion. The reason, of course, is states are on the hook to pay about 43% of Medicaid costs. Under the pending legislation, and depending on which plan you look at (House or Senate), Medicaid would expand 11% to 20%.
As you might imagine, that would impose a huge new mandate on the states already struggling with huge budget deficits and revenue shortfalls.
State governors, in Biloxi MS for the National Governors Association meeting, expressed bi-partisan disapproval of the plans.
“I think the governors would all agree that what we don’t want from the federal government is unfunded mandates,” said Gov. Jim Douglas of Vermont, a Republican, the group’s incoming chairman. “We can’t have the Congress impose requirements that we are forced to absorb beyond our capacity to do so.”
The House plan would pay for all of the costs of new enrollments and expand Medicaid the least (11%). The Senate version, however, would expand it the most (up to 20%) and would only pay full costs for 5 years. And the Senate’s answer to the states about how to fund the mandate?
Go into debt, of course:
One of the proposals being considered by the Finance Committee would encourage states to issue bonds to cover the costs of expanding Medicaid. Governors in both parties revolted, trumpeting their opposition in a conference call last week with Senator Max Baucus, the Montana Democrat who leads the committee.
The point is that not all costs are being surfaced when the total cost of this bill at the federal level is all that is cited. The House bill, for instance, would cost an estimated $438 billion over 10 years. I want to emphasize the word “estimated” and remind readers that there has never been an estimated cost I’m aware of that has come in on or under the projection.
Of course the Senate version, with expanded coverage, would cost more and shift the cost to states in 5 years. So you’ll not only be paying for this monstrosity at a federal level, but you can count on being tapped at a state level as well.
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.
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.
While I’m sure the specials last night on the deaths of Farrah Fawcett and Michael Jackson vastly outdrew the ABC’s Obama healthcare special the other night (no I didn’t watch it – I was being disappointed by the Yankees/Braves game), there were some very telling moments apparently. And, being the curious type, I found the transcript and read the whole thing.
Let’s say Mr. Eloquent was less than convincing. But he did shed some light on what he’d like to see the final product look like.
Naturally there were some moments that were instantly reported by the media and other bloggers. For instance when he essentially said that if that he’d use his wealth if necessary to go outside any system that denied his family the healthcare he thought they needed. The obvious point is he concedes that his system will do so – i.e. ration care through denial. Of course that’s one of the big complaints he’s had about private healthcare – rationing through denial.
But there were some other things said which only a careful reading of the transcript reveal. Let’s start with this question:
DR. JOHN CORBOY, NEUROLOGIST & MEDICAL PROFESSOR: Well, I think you still have to provide the appropriate care. And I think we all know that there is a significant amount of care that actually is inappropriate and unnecessary.
And the question then is — for you, Mr. President, is, what can you convince — what can you do to convince the American public that there actually are limits to what we can pay for with our American health care system?
And if there are going to be limits, who is going to design the system and who is going to enforce the rules for a system like that?
This question is loaded with key words and phrases. The first is “appropriate”, as in “appropriate care”. Who gets to decide? If you listen to a glib Obama, he constantly says medical decisions should be left to doctors. But this question isn’t being addressed to that point, is it? If there is an “appropriate care” standard, someone is going to have to define it.
And that is precisely what Corboy asks – “who is going to design the system and who is going to enforce the rules?” In fact, who gets to decide what the rules are?
I think you know the answer, but let’s look at the President’s answer:
OBAMA: Well, you’re asking the right question. And let me say, first of all, this is not an easy problem. If it was easy, it would have been solved a long time ago, because we’ve talking about this for decades, since Harry Truman.
We’ve been talking about how do we provide care that is high-quality, gives people choices, and how can we come up with a uniquely American plan? Because one of the ideological debates that I think has prevented us from making progress is some people say this is socialized medicine, others say we need a completely free market system.
We need to come up with something that is uniquely American. Now what I’ve said is that if we are smart, we should be able to design a system in which people still have choices of doctors and choices of plans that makes sure that the necessary treatment is provided but we don’t have a huge amount of waste in the system. That we are providing adequate coverage for all people, and that we are driving down costs over the long term.
OK, let’s stop for the moment right there. We begin with Obama in stump-speech mode. That’s a time buyer. He’s fumbling for an answer and is filling time. By the third paragraph he’s beginning to formulate an answer. Of course, I had to laugh because a uniquely American solution would be to have government back off and let the market take the ball and run with it. But obviously that’s not his plan. I think what he’s saying here is he hopes for a Euro-socialist plan with an American twist.
Anyway, in the third paragraph we’re again into some key words – this time “necessary” and “adequate”. Again, who will decide what is “necessary” and what form of coverage is “adequate”? Well, trust me, it won’t be you or your doctor, because his priority is what? That’s right – “driving down costs over the long term”. So “necessary” treatment will be considered in the context of “driving down costs”. I’m sure you figure out what that means.
Then there’s the “we should be able to design a system”. He’s not talking about you or the market here. He’s talking about government. He’s a part of the ‘we’ – you’re not.
Last, of course, is the overriding priority – drive costs down. He claims health care is the reason for the current deficit. So the obvious first priority for this so-called reform is to cut costs.
But let’s add 47 million new insured while driving costs down. Make sense to you? And if it does, then you have to admit that lesser cost, if possible, will have to come from some part of the current health care system. He has his ideas, and we’ll cover that in a different post.
Moving on with the answer:
If we don’t drive down costs, then we’re not going to be able to achieve all of those other things. And I think that on the issue that has already been raised by the two doctors, the issue of evidence-based care, I have great confidence that doctors are going to always want to do the right thing for their patients, if they’ve got good information, and if their payment incentives are not such that it actually costs them money to provide the appropriate care.
Here we find a very critical clue to the plan for your health care – the term “evidence-based care”. This is the new way of saying “we’ll decide for you”. Evidence based medicine claims to use the scientific method to determine optimum treatment decisions. The Centre for Evidence Based Medicine says it is “the conscientious, explicit and judicious use of current best evidence in making decisions about the care of individual patients.”
Said another way, a group somewhere doing research decides that certain diseases or conditions should be treated in certain ways. Those treatments are then applied to individual cases without any caveat for unique situations. The cost savings comes with uniform procedures and uniform care – no deviations. In other words, for the most part, decisions on how to treat individual cases will most likely have to conform to EBM guidelines or be considered outside the system. So what Obama said with that simple term is “we’ll decide how you will be treated, not your doctor”.
Of course critics of EBM are many and claim that it has some utility in outlining suggested treatment for populations as a whole, but has limited utility when taken down to the individual situation since each is unique.
And then there’s the inference that medicine to this point hasn’t been based on science. As Abraham Verghese said:
“Evidence Based Medicine” is a term which makes about as much sense as “Sex-based intercourse”–Were we practicing based on zodiac signs before EBM came along?
That brings us to the bit about “doctors always want to do the right thing for their patients”. Yes, of course. But what he says next hints that “the right thing” may be what the technocrats think is right, not necessarily what the doctors might think is right. He says doctors will do that “if they’ve got good information, and if their payment incentives are not such that it actually costs them money to provide the appropriate care.”
Anyone know right now instances when “appropriate care” costs a doctor “money to provide”? Yup, Medicare and Medicaid. It’s the reason so many opt out of treating Medi patients.
How then does he plan on changing their payment incentives so it doesn’t cost them money? Well to do that you either change the reimbursement rate or you change what is “appropriate”, don’t you? EBM promises the latter.
That brings us to the final part of his answer:
And right now, what we have is a situation, because doctors are paid fee-for-service, and there are all sorts of rules governing how they operate, as a consequence often times it is harder for them, more expensive for them, to do what is appropriate.
And we should change those incentive structures.
Now this is simply a load of road apples.
Litigation is part of the problem. Obama refuses to address that as a basic health care cost problem. It drives up costs and it also induces doctors to use unnecessary tests in a CYA gambit. Want to “change incentives?” Here’s a great place to start.
The second problem is chronic underpayment by the government through Medicare and Medicaid – something Obama and Congress want to again reduce by up to 20%. That causes cost shifting to the private side of things. But insurance companies have gotten smart and now refuse, in many cases, to pay more than the Medis. That is an artificial distortion of the market introduced by government arbitrarily deciding what a medical procedure is worth.
And the rules under which doctors operate are no less stringent under the Medis than under any private insurance plan.
That’s one question from the staged ABC “town hall meeting”. There was an amazing amount of info in that one question and answer. Enough information that you should be absolutely shaking in your boots, because what he said is he plans on doing precisely what he has been telling you he wouldn’t do – design a system which will decide how your doctor will treat you. It is all there, and no one has even bothered to take the close look it deserves.
I’ll parse a few more questions from the interview as I have the time, but suffice it to say, if you look hard enough you can figure out exactly where this guy wants to take us.
Daniel Henninger gives us a little walk down memory lane to remind us of the effect of our first attempt at “health care” reform.
Back before recorded history, in 1965, Congress erected the nation’s first two monuments to health-care “reform,” Medicaid and Medicare. Medicaid was described at the time as a modest solution to the problem of health care for the poor. It would be run by the states and “monitored” by the federal government.
The reform known as Medicaid is worth our attention now because Mr. Obama is more or less demanding that the nation accept another reform, his “optional” federalized health insurance program. He suggested several times before the AMA that opposition to it will consist of “scare tactics” and “fear mongering.”
Whatever Medicaid’s merits, this federal health-care program more than any other factor has put California and New York on the brink of fiscal catastrophe. I’d even call it scary.
Anyone who has paid any attention to the health care debate know full well that Medicare and Medicaid have become huge black holes with future funding obligations in the tens of trillions of trillions of dollars.
Now, pointing that out and doubting the government’s ability to do any better is apparently “scare tactics” and “fear mongering”. Reminds me of the AGW nonsense.
After 45 years, the health-care reform called Medicaid has crushed state budgets. A study by the National Governors Association said a decade ago that because of “new requirements” imposed by federal law — meaning Congress — “Medicaid has evolved into a program whose size, cost and significance are far beyond the original vision of its creators.”
There is nothing to convince anyone that the same won’t happen with a “public option”. And although the present plan is to have such an option pay for itself through premiums, there’s nothing to stop Congress from deciding the taxpayer should pick up the tab at some point in the future.
In his speech, Mr. Obama said the cost of the Public Option won’t add to the deficit: “I’ve set down a rule for my staff, for my team — and I’ve said this to Congress — health-care reform must be, and will be, deficit-neutral in the next decade.” If we’re honest, that means tax increases are inevitable.
The thing to remember – “deficit-neutral” doesn’t necessarily mean cuts in spending. It means that revenue must equal spending and that obviously means that spending increases must have added revenue – tax increases.
There is some resistance starting to form to the “reform”. The Democrats plan on rushing this through with limited debate. If they succeed, “Son of Medicare” will wander out the government lab and bankrupt this nation much more quickly than now anticipated.
Bruce Bartlett gives you a different way of looking at the mess your political leaders, over a number of generations, have gotten us into and what it will cost, at a minimum, to fulfill the promises they’ve made over the decades.
To summarize, we see that taxpayers are on the hook for Social Security and Medicare by these amounts: Social Security, 1.3% of GDP; Medicare part A, 2.8% of GDP; Medicare part B, 2.8% of GDP; and Medicare part D, 1.2% of GDP. This adds up to 8.1% of GDP. Thus federal income taxes for every taxpayer would have to rise by roughly 81% to pay all of the benefits promised by these programs under current law over and above the payroll tax.
Since many taxpayers have just paid their income taxes for 2008 they may have their federal returns close at hand. They all should look up the total amount they paid and multiply that figure by 1.81 to find out what they should be paying right now to finance Social Security and Medicare.
To put it another way, the total unfunded indebtedness of Social Security and Medicare comes to $106.4 trillion. That is how much larger the nation’s capital stock would have to be today, all of it owned by the Social Security and Medicare trust funds, to generate enough income to pay all the benefits that have been promised over and above future payroll taxes. But the nation’s total private net worth is only $51.5 trillion, according to the Federal Reserve. In effect, we have promised the elderly benefits equal to more than twice the nation’s total wealth on top of the payroll tax.
We again have a new crop of political leaders making similar promises about a range of things, from energy to the environment to health care. Look at what they’ve done with the portion of health care they were given previously?
Someone – anyone – tell me how, given the performance of government to this point with Medicare and Medicaid, it is going to provide lower cost health care when it is obvious that it has been instrumental in doing just the opposite?
For some reason, I just can’t get past that negative and inconvenient truth enough to suspend disbelief and decide that once government is running the whole show, everything will fall in line and we’ll have world-class health care at a much lower price – all managed by government.
And one other point Bartlett makes – this mess was made by politicians and, as our laws are written, can only be fixed by politicians. But politicians rarely, if ever like to make decisions which will be unpopular and cause them to have to find new employment. No one likes to be the bad guy. So don’t expect much in the way of “fixing” this mess. You’re more likely to see the whole house of cards collapse because it is unsustainable and the administration in charge at the time blame the previous one (kind of like what you’re seeing now on just about everything else) than to see any political leader actually make the hard decisions necessary (and then win over the Congress) to actually take care of these looming problems.
Enjoy your Sunday.