By Robert M. Goldberg on 6.16.09 @ 6:07AM
The Kennedy health care bill is out of its mind and out of
control.
Bonaparte famously said to "never ascribe to malice that which
can adequately be explained by incompetence."
Thus stands the Kennedy health care bill, placeholder for the
hard left dream of a government takeover of the American health
system. The bill is a taxpayer-supported monument to the lethal
stupidity of this statist objective that will leave Americans
with fewer choices, more government control over medical
decisions, higher taxes, and a smaller private health insurance
market (mostly union health plans paid for by taxes on the health
benefits of non-union workers) that punishes efforts to reward
healthy behavior.
Over ten years: 16 million more people with new insurance, 23
million forced into public plans. A trillion dollars at least. By
way of comparison, from 1997 to 2006 the number of people with
private health insurance grew by 5.4 million, while Medicaid and
SCHIP coverage grew by 13 million for a total of 18.4 million.
Total cost to the government: $40 billion.
Total health care spending over that
time period increased by one trillion. Meanwhile, most of the
public health care coverage increase during that time -- 60
percent according to a Harvard University study -- displaced
private health insurance coverage.
Could the Kennedy bill be any more inefficient at using taxpayer
dollars to subsidize misshapen forms of health care coverage? Of
course it could. And it is.
Yesterday President Obama told the American Medical Association
that "a big part of what led General Motors and Chrysler into
trouble were the huge costs they racked up providing health care
for their workers -- costs that made them less profitable and
less competitive with automakers around the world."
"If we do not fix our health care system America may go the way
of GM -- paying more, getting less, and going broke."
Which is why Section 133 of the Kennedy bill grandfathers in
every union-negotiated health plan that apes union health plans
for workers and prohibits companies from transferring workers
into the public "option."
Worried about the cost of retiree health benefits? No problem.
"There is established in the Treasury of the United States a
trust fund to be known as the Retiree Reserve Trust Fund that
shall consist of such amounts as may be appropriated or credited
to the Trust Fund as provided for in this subsection to enable
the Secretary to carry out the program under this section. Such
amounts shall remain available until expended." ("Such amounts"
is Washingtonspeak for bottomless pit.) It pays for insurance
benefits and 80 percent of claims from $15,000 to $90,000 for all
retirees (ages 54-64). Initial cost of this "trust fund": $10
billion.
The Kennedy bill pays for $1 trillion in ineptitude in four ways.
First, it borrows. But who's counting or keeping track?
Second, it creates "Gateways" that are supposed to create groups
of purchasers to reduce the cost of insurance. In fact, since
insurance companies have already made it clear that they can
provide guaranteed coverage without regard to the size of
purchasing pools, why are such Gateways necessary? Because, as
agents of the federal government, Gateways collect a tax on the
insurance premiums of the young, healthy and health-conscious to
subsidize the cost of insurance for those who now have no
incentive to improve their health.
In fact, insurance plans that actually do a better job of
controlling costs or keeping premiums low with better quality are
punished under the Kennedy bill: "Any State or participating
State shall assess a charge on health plans and health insurance
issuer (with respect to health insurance coverage) if the
actuarial risk of the enrollees of such plans or coverage for a
year is less than the average actuarial risk of all enrollees in
all plans or coverage in such State for such years."
Third, in order to subsidize the sort of health plans that broke
the bank at GM, the Kennedy bill taxes the health benefits of
others, particular those in self-insured corporations that are
doing the most innovative things to improve quality and reduce
costs.
Fourth, the Kennedy bill gives a Medical Advisory Council power
to determine what new technologies and benefits can be covered
and are introduced. It's the same technique Obama wants to use to
curb the rate of growth in Medicare. John McCain suggested
paying for his health care tax credit plan with Medicare savings.
During the election, Obama said that "would mean fewer places to
get care, and less freedom to choose your own doctors…. I don't
think that's right."
Today, Obama would slash payments and choices to seniors --
mostly the sickest -- to help pay for GM-type health plans,
retiree slush funds, and the mass relocation of middle-class
Americans into a richer version of the Indian Health Service. On
top of that, the Kennedy bill costs $1 trillion to "cover" 16
million new people in the process. By tossing 40 million out of
private insurance no less. Not only is it not right. It's
incompetent.
