By Peter Ferrara on 8.19.09 @ 6:08AM
Keeping up with the president’s chronic lies, deceptions, misrepresentations and other health-care fairy tales.
Last week, Barack Obama treated us to a traveling road show crusading for his heath care overhaul plan. But what he actually said at those staged, orchestrated, town halls packed with his fervent supporters was so unhinged from the reality of the Congressional legislation he is supporting that he must have consciously decided to challenge us all with the dare: “Catch me if you can.”
President Obama keeps repeating over and over that his plan does not include any cuts in Medicare. But the legislation he is supporting specifies $500 billion in reduced funding for Medicare, scored by CBO. When arguing that his health overhaul is paid for, he wants credit for these cuts. But when challenged, he wants to deny before the whole country in broad daylight that he is doing it. I can’t recall any precedent for such a Presidential disconnect from reality.
In trying to deny these Medicare cuts, President Obama said at one town hall that AARP had endorsed his plan. He said, “AARP would not be endorsing a bill if it was undermining Medicare, okay?” But just the night before, AARP was on national television denying that it had endorsed the Obama health plan. It issued a press release saying the same just after Obama’s town hall misstatement.
President Obama also repeats over and over in these town halls that his health plan will reduce health costs, thereby reducing federal spending and deficits. But CBO, which is now in complete control of the Democrat Congressional majorities, says just the opposite. It says the Obama health overhaul plan will increase federal spending by close to a trillion dollars or more, and increase the federal deficit by hundreds of billions. On health costs, CBO Director Doug Elmendorf told Congress,
In the legislation that has been reported we don’t see the sort of fundamental changes that would be necessary to reduce the trajectory of federal spending by a significant amount…[O]n the contrary, the legislation significantly expands the federal responsibility for health costs….[The government public option for health insurance] raises the amount of [spending] that is growing at this unsustainable rate.
And here’s a dirty little secret. The CBO surely underestimates the costs of the Obama health plan, just as it regularly does for new government programs, health programs in particular. The official government estimates for Medicare when it was adopted in 1965 projected that the program would cost only $12 billion by 1990. But the actual costs of the program by that year were $109.7 billion, nine times larger than the original estimate.
Independent private estimates have ranged far higher than what CBO projects. HSI Network used its proprietary ARCOLA simulation model to estimate that the House bill would cost $3.5 trillion in additional federal spending alone over 10 years. HSI estimates that the Senate bill would cost $4.1 trillion over 10 years. These estimates seem far more realistic than the CBO estimates. In my study of the Obama health plan for the Heartland Institute (www.heartland.org), I explain in thorough detail how and why the Obama health overhaul will raise rather than lower health costs.
But in the town halls, President Obama just goes from bad to worse. In Colorado on Saturday, President Obama even suggested that his health overhaul scheme would “bend the cost curve,” reducing “health care inflation” so much that the enormous long-term deficit of Medicare (unfunded liability: $89 trillion) would be eliminated! He said that without his health overhaul plan, “We’ll either have to cut Medicare, in which case seniors then will bear the brunt of it, or we’ll have to raise taxes, which nobody likes.” But the CBO has never ever come anywhere near to confirming anything like this. This is just abusive.
Screwing Seniors on Medicare Advantage
Among the cuts in Medicare under the Obama health plan is $177 billion in cuts for what he misleadingly calls “subsidies” for health insurance companies, or “sweetheart deals for insurance companies that don’t make anybody any healthier.” Translating this into straight talk, what Obama is talking about here are the reimbursements Medicare pays to the private insurance companies operating the Medicare Advantage option. Seniors enjoy the freedom today to choose one of these Medicare Advantage insurance companies to provide their coverage and benefits under Medicare. Almost one-fourth of seniors have chosen this Medicare Advantage option because they believe they get better benefits from it than from standard Medicare.
But Obama thinks that what Medicare is paying to these insurance companies to provide Medicare coverage and benefits is somehow a “subsidy” or a “sweetheart deal.” So he is proposing to pay for his health care overhaul in part by slashing these payments by $177 billion. At a minimum, these cuts will force these plans to cut back on the benefits they provide to seniors. Or the Medicare Advantage plans may just go out of business altogether, dumping the almost one-fourth of seniors who have made this choice because they are getting a better deal from these plans.
President Obama continually promises over and over that if you like your health insurance, you can keep it. He said at the town hall in Colorado on Saturday, “I just want to be completely clear about this: I keep on saying this but somehow folks aren’t listening — if you like your health care plan, you keep your health care plan.” But this promise apparently doesn’t extend to seniors on Medicare Advantage, which he is slashing because he is ideologically opposed to private options for Medicare.
Nor can anyone else rely on this false promise either. If you have employer-provided health insurance, under the Obama health plan the decision as to whether you keep that insurance will not be up to you. It will be up to your employer, who Obama entices with incentives to dump you into the public option government health insurance plan so beloved by the Far Left. The employer can just dump your current health coverage and pay an 8% payroll tax instead. If you make $50,000, the payroll tax will cost $4,000 for you, which is probably less than the cost of your current coverage.
This is why the Lewin Group, an independent, expert, health care consulting firm, estimates that under the Obama health plan “about 88.1 million workers would shift from private employer insurance to the public plan” to start. That’s a lot of workers not keeping their current health coverage if they like it.
Even if you purchase health insurance directly on your own, you will not be able to keep that insurance if your insurer is driven out of business by the public option, government health plan. One big reason that will happen is that the government has the power to dictate what doctors and hospitals would be paid by the government plan. Medicare now pays doctors almost 20% below market rates, and hospitals more than 30% below market. Medicaid pays 30% to 40% less than Medicare. The health reform bills now pending in Congress authorize the public option to follow these payment practices.
Private health plans will not be able to compete with a public government plan that has lower costs because it dictates lower payment rates to doctors and hospitals. Indeed, the current experience with Medicaid and Medicare is that these government plans drive up the cost of private health plans, as doctors and hospitals underpaid by the government health plans try to recover the losses by charging more to privately insured patients. Private health plans trying to compete with the government public option would consequently be at even more of a competitive disadvantage.
Obama also repeatedly says that under his health plan if you like your doctor, you will be able to keep him, or her. But the question is whether under his plan, with the government so sharply underpaying the doctors, your doctor will be willing to keep you.
Government-Run Health Care
In the town hall meeting in New Hampshire last week, Obama said about his health care overhaul plan “This is not about putting the government in charge of your health insurance.”
Oh, really. Faithfully to the Obama plan, the bills before Congress create a government bureaucracy that will dictate to the insurance companies exactly what benefits and coverage they must provide. The bills also dictate who the insurers must cover, with guaranteed issue for whoever shows up regardless of health condition. The bills also specify in detail what the insurance companies can charge, with community rating for everyone who applies, regardless of health condition. The government will let the insurer vary premiums by age up to a ratio of 2 to 1. How flexible.
The government will also dictate what deductibles, co-pays, and other out of pocket expenses the insurance company can offer. If you are one of the almost 12 million Americans with low cost Health Savings Account insurance plans or similar high deductible plans, and you like it, too bad, because Obama’s promise of allowing you to keep your plan does not apply to you.
The bills also provide for a government bureaucracy that will “risk adjust” premium income to insurance companies by redistributing funds from insurers whose covered customers are healthier and lower cost than average, to insurers whose covered customers are sicker and higher cost than average, as determined by the bureaucracy.
Oh, no. The Obama plan “is not about putting the government in charge of your health insurance.” No way.
Peddling Still More Falsehoods
Also in the New Hampshire town hall last week, President Obama said that under his health plan,
[I]nsurance companies…will not be able to drop your coverage if you get sick. They will not be able to water down your coverage when you need it. Your health insurance should be there for you when it counts — not just when you’re paying premiums, but when you actually get sick. And it will be when we pass this plan.
But dropping or watering down your health insurance coverage after you get sick has long been illegal in America, and well it should be. Health insurance that can be cut off after you get sick is like fire insurance that can be cut off after your house catches fire. That is not health insurance, it is fraud.
The prohibition against this fraud was nationalized by the Congressional Republican majorities in the landmark HIPAA legislation in 1996. That legislation even provided that if you lose employer provided health insurance coverage for any reason (changing jobs, layoffs, employer goes out of business, divorce) any private insurer you apply to within 2 months must take you, regardless of health condition. Even failing that, Republicans have long advocated uninsurable risk pools for every state, which would provide government subsidized coverage to anyone who couldn’t get coverage anywhere else. Such risk pools have long worked quite well in over 30 states.
There may still be some loopholes in the employer group market that should be closed. But in making this argument, President Obama is trying to take credit for solving a problem that has already been basically solved, and does not require the massive government takeover of health care that he is advocating.
Rationing and Denying You Health Care
Finally, President Obama and his left wing supporters laugh off the notion that there will be any government health care rationing under his plan. Again, my recent study on the Obama health plan for the Heartland Institute explains in full detail exactly how this rationing would be imposed under that plan. The talking heads who appear on TV or radio flatly denying that as misinformation either haven’t read the bills or don’t understand what they have read.
The legislation already provides for the establishment of government bureaucracies with the power to decide on “cost-effectiveness” in health care, which means the government will decide whether the benefits of your health care to you are worth the costs to the government or other payers. This is the grounds for the extensive government health care rationing we see in other countries with such systems such as Great Britain and Canada, or even in Oregon in the Medicaid program, where those needing life saving care have been told that such care is not cost effective, but the government will pay for physician assisted suicide instead.
The legislation already provides for bureaucracies with the power to decide “comparative effectiveness,” where the government is empowered to decide what health care “works” and what doesn’t. This is what your doctor is for, to decide what will work and what won’t for you. But now a government bureaucracy that doesn’t even know you will be involved, and if your doctor doesn’t follow its decisions, he will be penalized in his reimbursements for your care under “pay for performance.”
And when the steep underpayment of doctors and hospitals under the payment practices of Medicaid and Medicare is extended more generally through the public option government health plan, incentives to invest in health care will be obliterated. That means no investment in new, expanded clinics and hospitals, or even the maintenance of existing ones, no investment in the high tech medical equipment Americans have far greater access to than anywhere else in the world, no investment in the scientific breakthroughs that would provide for the next generation of high tech medical advances, no investment in development of new life saving and pain saving miracle drugs. It means the departure of doctors, specialists and surgeons from current practices, and far fewer new ones coming up. There’s your rationing, your long waiting lines we see in all these other countries, the people dying while waiting for care from their government. Even this is not the whole story, which again is discussed in my Heartland study. The bottom line is, as others have said, the whole Obama health plan is a death panel.
What all of the above means is that Obama is willing to say anything no matter how transparently ridiculous and absurd to pass his government takeover of health care. At this point, you can’t believe a word he says about it.
Peter Ferrara is Director of Entitlement and Budget Policy at the Heartland Institute, General Counsel of the American Civil Rights Union, Senior Fellow at the National Center for Policy Analysis, and Senior Policy Advisor on Entitlements and Budget Policy at the National Tax Limitation Foundation. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush.
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