Fix Health Care Policy

A First Look at the President’s Health Summit Proposal: Liberal Proposal Number Three

In the run-up to his proposed health care summit, President Barack Obama this morning unveiled an 11-page outline of his health care proposal. Within the outline, there are 33 specific policy changes. Of course, there is no legislative text yet, so the full impact of what the President is proposing will not be known for some time.

The President’s revisions are based on the Senate bill, as amended by Senate majority Leader Harry Reid (D-NV), and passed last Christmas Eve. According to the February 22, 2010, edition of Congress Daily, on paper, at least, the President’s outline would increase the cost of the Senate bill from $871 billion to $950 billion over ten years. Of course, the real costs depend upon the years of implementation, counting both the revenues and the benefits together.

Bridging the Gap between House and Senate Liberals. The President describes his proposal as a set of policy changes that would “ bridge the gap” between the unpopular House and Senate health care bills. The President stresses that his proposal “… adds new provisions to crack down on waste, fraud and abuse.” He also says that his proposal “puts American families and small business owners in control, of their own health care.” This latter claim is, in point of fact, disingenuous. Americans would have less control over health care decisions today, what kind of plans and benefits they get, and Washington would exercise even more control over health care financing and delivery than it does today.

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Tags: Cornhusker Kickback, employer mandate, new taxes, ObamaCare, President's proposal, public plan

Beware a Public Health Plan in Private Disguise

In the ongoing attempts of Congress to find an alternative to the “public plan” in health reform, the Senate bill includes a provision to give the Office of Personnel Management (OPM), which oversees the Federal Employee Health Benefit Program (FEHBP) a new role: sponsoring health plans to compete against private health plans in every state in the nation.

As Kay Cole James, a former director of OPM, points out in a recent op-ed, the FEHBP works because OPM plays the neutral role of an umpire: federal employees choose the private plan they like from a wide variety of different plans, all of which compete against each other to attract the most enrollees. The federal government provides its employees with a defined contribution towards their health costs, and it doesn’t micromanage their choices. OPM allows variety and flexibility in the program, and limits its regulatory role to ensuring consumer protections. Sen. Reid’s proposal would have OPM sponsor new multi-state plans. OPM would set the premiums for plans it sponsors. (more…)

Tags: Federal Employee Health Benefits Program, Kay Cole James, Majority Leader Harry Reid, OPM director, public plan

Morning Bell: The Six Key Issues the House Must Cave On Before Obamacare Becomes Law

This morning at around 8 AM, the Senate passed, again on a straight party-line vote, Majority Leader Harry Reid’s (D-NV) manager’s amendment to the Senate’s version of Obamacare. This keeps the Senate on pace to pass the bill at 9 PM on Christmas Eve despite the fact that Americans overwhelmingly opposed the legislation. But even after the Senate gives President Barack Obama his $2.5 trillion Christmas present, the bill, assuming it is to be considered in regular order, still must go through a House and Senate conference.

President Barack Obama attempted to downplay differences between the House and Senate bills telling American Urban Radio Networks yesterday: “The Senate and the House bills are 95 percent identical. There’s five percent differences, and one of those differences is the public option. This is an area that has just become symbolic of a lot of ideological fights. As a practical matter, this is not the most important aspect to this bill.” We’ll let President Obama fight with his base abut how important a strong public option is to health reform, but a government run plan is just one of six key differences between the House and Senate bills:

Soak the Rich or Tax Everybody: The Senate bill relies heavily on a new excise tax on high cost health plans: a 40 percent tax on plan exceeding $8,500 for an individual and $23,000 for a family. The AFL-CIO and SEIU both call this a tax on working families. The Senate bill also includes a new premium tax on all insurers and the CBO confirms that the cost of this tax will be passed on to all Americans with private insurance. The House bill depends on a heavy new income tax targeted at top-earning taxpayers and small businesses. The 5.4 percent tax on individuals with incomes above $500,000, and on families with incomes above $1 million, is structured in a way that over time more and more Americans will be hit by this tax and small business owners would be particularly affected. (more…)

Tags: employer mandates, excise tax, individual mandates, Majority Leader Harry Reid, Medicaid Expansion, ObamaCare, public plan, senate health care bill, taxpayer funded abortion

The Reid Compromise Does Nothing to Improve A Very Bad Senate Health Bill

Although the details have not been released, Majority Leader Harry Reid (D-NV) has floated yet another potential “compromise” to his health care bill. There appear to be two broad elements: a federal insurance plan run by the Office of Personal Management and a Medicare buy-in option for Americans over 55.

Don’t Be Fooled. There is nothing new or original about these ideas. Both these policies have been recycled from previously failed efforts. Senator John Kerry’s (D-MA) health care proposal from his 2004 failed Presidential bid included a federal plan run by the Office of Personal Management (OPM). The Medicare buy-in was proposed by President Clinton in 2000. Those ideas were bad when they were introduced and are no better today.

– New Federal Insurance Plan. The compromise proposal appears to envision giving the Office of Personal Management the authority to contract with a private, non-profit to administer a special federal health plan. There are several key problems with such an approach. First, running a stand alone health plan, in effect, a public plan for the entire nation, will undoubtedly result in higher taxpayer costs. In other words, the size of government, once again will grow. Taxpayers can expect new demands for funding. Second, if OPM was given broad power to negotiate and determine services, benefits, premiums, etc., this federal plan would be no different than the older version of the “ public plan” that so many are bitterly opposed to; merely because the public plan is ”private” in name only doesn’t change a thing. Finally, shifting this public plan option to OPM means the Director of OPM could end up as the ultimate health care czar, reporting directly to the President.

– Medicare Buy In. The compromise proposal suggests allowing individuals 55 to 64 to “buy-in” to the Medicare program early. This too has multiple problems. First, opening Medicare will lead to selection issues. As CBO points out, enrollees would likely be higher users of medical services which would be reflected in higher premiums. To address this, the government may likely subsidize these enrollees, adding more cost to the taxpayers. Second, it would also likely create a crowd-out effect, where the government buy-in option squeezes out the availability of private coverage, including retiree coverage from a former employer. Finally, Medicare is already fiscally unsustainable. This solution would only accelerate its doom.

– Medicaid Expansion. While reports claim that the idea of expanding Medicaid even further beyond what is currently in the bill appears to be off the table, it should be noted that while the Senate bill includes a Medicaid expansion to 133% FPL, the House bill goes much further, raising eligibility to 150% FPL. Therefore, an even bigger Medicaid expansion may not be a dead deal.

Still Plenty Wrong With The Bill. Regardless of the merits of Majority Leader Reid’s latest attempt at a compromise, there is plenty wrong with the Patient Protection and Affordable Care Act — massive consolidation of regulatory authority over health care to the federal government; unintended consequences of the employer mandate; constitutional concerns over the individual mandate; inequities created through the subsidy structure; massive Medicaid expansion; Medicare “savings” shifted out of Medicare; and a flood of new taxes that impact Americans regardless of income — to name just a few.

Tags: Medicaid Expansion, Medicare buy-in, Office of Personnel Management, public plan

A Thinly Disguised Power Grab: The Latest Senate “Compromise” On The Government-Run Health Plan

Details are diabolical. Very soon, the fine print of the latest Senate scheme on the government-run health plan will be unveiled. If the Senate leadership has its way, the newly hatched “compromise” on the “public plan” will move quickly by the fleeting light of day toward passage.

In their relentless drive to overhaul one sixth of the American economy, Senators are obviously making it up as they go along. In the latest desperate search to find some form of government-run health plan to compete against private health plans that is somehow acceptable to Senate liberals and moderates alike, the Senate Democratic leadership is entertaining the idea of stripping the existing “public option” from the big Senate health bill (H.R. 3590), and replacing it with a combination of public options: an OPM/FEHBP sponsored plan (that will be “private” in name only) and an expansion of the two giant — and financially troubled or debt ridden — Great Society entitlements: Medicare and Medicaid. If the original idea of the public option was to keep costs down, As its champions have tiresomely insisted, a proposal to expand Medicaid and Medicare is curious to say the least: Both are major drivers of the health care spending curve upwards — well into the stratosphere.

More Debt. Medicare and Medicaid expansions are nothing new. The latest proposal to expand Medicare, a program for senior and disabled Americans, down the age scale was proposed by the Clinton Administration in the late 1990’s, after the collapse of its 1,342-page health care bill. The same proposal is under consideration now, expanding Medicare to cover people between the ages of 55 and 64 years of age. Depending on how the amendment is written, this could jump start a massive enrollment of the Baby Boom generation before 2011, when the first wave of Boomers is set to retire. No details are available, nor is there any kind of cost estimate. Medicare already has a long-term debt of $38 trillion.

Higher State Costs. A major Medicaid expansion is already embodied in both the House and Senate bills. The Senate bill would expand Medicaid up the income scale to 133 percent of the federal poverty level, and the House bill would expand it to 150 percent of the poverty level; in both cases there would be massive erosion of private health insurance among families in these income categories. Which is the key point, apparently. For those who are enrolled in it, Medicaid delivers poor quality care compared to private health insurance. But Senate liberals are undeterred, and the issue of poor quality is rarely even discussed in the largest of the government’s health programs. Of course, the problem with the massive Medicaid expansion is that it will also add to the already burdensome Medicaid costs on the states.

More Central Control. The more interesting element of this proposal is the creation of an “FEHBP Plan” administered by the Office of Personnel Management (OPM). OPM is the agency that runs the popular and successful Federal Employees Health Benefits Program (FEHBP) that covers members of Congress and federal workers and retirees. There are no details about any of this yet, beyond some discussion of broad concepts in the media. However, it appears that under the Senate Democrats’ compromise proposal, OPM would be given authority to contract with private, nonprofit insurers (such as Blues and Kaiser) to compete in the federally designed health insurance exchanges that would be erected in each of the states under the Senate bill. It appears that the government would sponsor certain favored health plans to compete against the private health plans in the states. It is not clear how a restricted set of plans would add much to competition or to expand personal choice of benefits, particularly if the benefits are politically standardized.

The key question is what authority OPM would have in the negotiation of rates and benefits, and in the financing and the administration of the program. These details are crucial. If OPM were given absolute authority to set premiums and benefits, it could conceivably set premiums below the market prices, thus undercutting private health plans on an un-level playing field, leading to the kind of erosion of private health coverage that was envisioned under the “robust” public plan favored by the Left. If it sets rates and benefits on the basis of the market rates, of course, it would fail to achieve the Left’s goal of a “robust:” administered pricing system, a central rationale for the public plan in the first place. But, of course, that could change over time. The key issue in health care policy is the infrastructure of power and control; the levers of power and domination, additional staff and funding, can be always added later, especially if an artificially low priced, government-sponsored health plan (or plans) starts to run deficits.

Meanwhile, consider the existing power of OPM. Under current law, the Director of OPM has plenary authority in negotiating rates and benefits with private health plans, a vast authority repeatedly upheld by the federal courts. The OPM Director reports to only one person: The President of the United States. If the goal is for government to dominate the health insurance markets through the creation of a new “public option” — private health plans that are private in name only — the end result could be a national health insurance market literally run out of the West Wing of the White House.

Tags: FEBHP, Office of Personnel Management, public plan, West Wing

Senate Votes Obamacare One Step Closer to the Finish Line

The Senate voted this evening by a 60-39 majority to commence debate on Senate Majority Leader Harry Reid’s bill that would radically expand government control over private health care decisions. The bill is over 2000 pages long, costs an estimated $2.5 trillion over the first ten years of implementation and carries a half trillion dollars in new taxes. Many Americans have to be thinking right now — they have heard from their dissenting constituents at Town Hall meetings and have seen the poll numbers for Obama’s health care bill dropping like a rock so why would they keep moving this bill forward?

This debate will center around many issues including huge taxes increases, economy-killing employer mandates and:

1. Abortion: Congressman Bart Stupak (D-MI) offered an amendment to the House bill to ban all federal funds flowing into the health care system from funding abortion. Senator Reid put language in the bill that allows some funds to go to abortion services by using an accounting gimmick. This issue could take the bill down, because the House approach is far different from the Senate approach. If this bill becomes a referendum on abortion policy, it may fail. (more…)

Tags: abortion, cost, Harry Reid, Landrieu, Lieberman, Lincoln, mandate, Nelson, Obama Health Care Plan, ObamaCare, public plan, Senate, Snowe, Stupak, taxes

The Government Takeover of Health Care in Pictures

Conservatives may have defeated Hillarycare fifteen years ago, but in the intervening years the left succeeded in passing a slew of incremental reforms that have led to a slow but steady march toward a government takeover of health care in this country.

These Hillarycare-lite measures include adding more middle-class kids to the children’s health care program (known as SCHIP), along with expanding Medicaid eligibility. As of 2007, the federal government controlled 46% of every health care dollar spent compared to 44% in 1993.

But should Obamacare become law (specifically the House bill) the government takeover of health care would be greatly accelerated. According to the Centers for Medicare and Medicaid Services in the Obama HHS department, the government could control more than 50% of all health care spending –even before most of the major spending provisions in the House bill are implemented.

Government takeover of the health care sector? You decide.

Tags: government-run health care, Medicaid, public plan

House Minority Leader John Boehner (R-Ohio)

“Whether you call it a public option, a trigger, or a co-op, the fact is all of these proposals put us on the path to government-run health care.” — (October 26, 2009, FoxNews.com)

Tags: Co-Op, opt-out, public plan, Trigger