The Right Prescription

Obamacare: Still a Threat to Your Life

Now, post-summit, more than ever.

By 3.3.10

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The true reality of last week's health care summit, what was really going on between the lines, was ugly and scary. I have been deeply involved in these health care debates for almost 30 years, ever since I co-authored the first paper published on Health Savings Accounts (HSAs) with John Goodman in 1981. What the health summit made clear to me is that the Democrats do not understand what the Republicans are talking about on health care. Indeed, they have no idea what the American people are talking about either, or why growing majorities of us oppose what they are trying to do.

But it gets even worse. The health summit made clear that the Democrats do not understand what they themselves are doing on health care. They have been misled and manipulated by left-wing ideologues.

Why Your Life Is At Risk

Let me reveal my personal stake in this health care debate. My life is at risk. So is yours, as well as the lives of our children, our parents, and everyone else in our families. For the thorough government takeover of health care in America the Democrats are feverishly pursuing, and the outdated socialized medicine policies from other countries they are so religiously committed to adopting, would trash the very ability of the system to provide the health care many of us are likely to need in coming years to extend our lives, and to maintain our basic quality of life.

The decimation of our health care system under Obamacare begins with government mandates, regulations, bureaucracies, and controls. The House and Senate health care bills that President Obama and the Democrats refuse to take off the table create close to 100 new health care bureaucracies, boards, commissions and programs. This is the government takeover of health care.

These new authorities arrogate to the government the power to decide "what works" in health care, and what doesn't. The code words they use include "best practices" -- a government bureaucracy in Washington is going to decide what are the "best practices" in providing health care for you and your children, not you and your doctor. Another code phrase is "reward doctors for quality not quantity." Government bureaucracies in Washington do not know how to do this. But they will make a huge mess out of your health care in trying to.

These government bureaucracies will also have the power to cut off your health care when they decide it is no longer worth the money. We have already seen a glimpse of this in the declaration by a bureaucracy, to be expanded with more powers under Obamacare, that women over 72 should not have mammograms. What they are saying here is that if you are over 72 and get breast cancer, they don't want to know about it. Just take the painkiller and go home, to paraphrase President Obama. They believe they can buy more votes taking the money for your care and spending it somewhere else. This is called "cost effectiveness."

The destruction of the health care system is then expanded through the payment system. Among the code words here are "pay for performance" and "accountable care." This is how the bureaucracy will enforce its dictates concerning what works and what doesn't, best practices, cost effectiveness, and termination of health care no longer deemed worthy. Doctors and hospitals will be rewarded through payments if they follow the centralized bureaucracy's dictates; they will be penalized with reduced payments if they don't. You will never know what happened to you. The doctor is not going to tell you, "I could have saved your daughter's life with this new treatment, but that is not yet a best practice according to the government."

Health care obliteration then continues by constricting the payments overall to doctors, hospitals, specialists, surgeons, health care innovators, and other health providers. This is where the $500 billion in Medicare cuts come in, which is $800 billion in the first 10 years of full implementation under Obamacare. Seniors will soon find out that constricted payments mean constricted services, because President Obama has already begun cutting payments under Medicare, particularly for cancer and heart specialists, treatments, and diagnostics. But this is just part of the constricted payments to the entire health system under Obamacare, which is how President Obama thinks he will bring the cost curve down. The sad truth is that the only cost control in Obamacare involves health care rationing, which means denying you health care. Those union orchestrated sad sacks marching in the streets chanting for "health care" are suckers.

The final component ultimately leaving us with Potemkin Village health care is the effect of all of this on investment incentives. Nobody is going to invest the capital necessary to develop the new, life-saving health care treatments and technologies and miracle cure drugs, and build the new facilities and purchase the new equipment to provide them, with the constricted payments of Obamacare as their reward. That money will instead join the capital fleeing to build new factories providing good jobs in the increasingly booming economies of Brazil, India, and China.

We can begin to see these effects of Obamacare in Massachusetts, which adopted some of the Obamacare policies a few years ago. As John Goodman writes in his Health Alert ("Scaling the Summit") for February 26, "As a result, the waiting times to see a new doctor in Boston are twice as long as in any other U.S. city. And there are still as many people going to emergency rooms for care in Massachusetts today as there were before the Massachusetts health plan was adopted."

But none of the supporters of Obamacare -- the bloggers, the talk show hosts, the literal clowns like Bill Maher, Jon Stewart and Wanda Sykes that now get media coverage to lecture us on public policy -- understand any of this. They have their heads firmly and deeply stuck in the sand, and insist it is all made up. And as for Democrat members of Congress, they don't have a clue.

Fighting for Their Lives

But when their own lives are at risk, suddenly they can understand it quite well. Consider the case of Danny Williams, age 60, Premier of Newfoundland, Canada, who secretly snuck into the U.S. for his own heart surgery. After his surgery at Mount Sinai Medical Center in Miami, Williams told reporters, "This was my heart, my choice, and my health. I did not sign away my right to get the best possible health care for myself when I entered politics."

Why Williams felt he had to come to America was further illuminated by the recent heart surgery of former President Bill Clinton. As Dr. Marc Siegel explained in the New York Post,

Clinton, of course, got the best of care -- a cardiac stent (a tiny metal cylinder) coated with a drug to help keep his artery open. Recent studies in the New England Journal of Medicine and elsewhere have shown that these drug-eluting stents are more effective than bare metal ones. But they cost two-to-four times more -- and the technology is relatively new. That combination has left government run health-care systems slow to adopt them….Per capita, our neighbors to the north receive only half as many coronary [operations]. And only 30% of the stents placed in Canada are drug-eluting, compared to a whopping 80% in the United States. So a Canadian cardiac patient is less than a quarter as likely as an American to be outfitted with the kind of state-of-the-art stent that Clinton had. In Canada, land of single payer health insurance, you're also less likely to get the stent as soon as the need is clear.

Wanda Sykes owes Sarah Palin an apology.

Why Your Country Is at Risk

The Health Care Summit highlighted another issue that too many of us too easily conceded. House Republican Budget Chief Paul Ryan articulately exposed Obamacare as increasing the deficit by $460 billion over the first 10 years, and $1.4 trillion over the second 10 years. That is with half a trillion in tax increases, and half a trillion in Medicare cuts, over the first 10 years alone.

One of the chief tricks to hide these deficits is to provide for reversing some of the draconian cuts for doctors and hospitals in a separate bill scored as increasing the deficit by $371 billion. The Obamacare legislation also counts on raiding $52 billion in Social Security revenues. Still another trick to claim deficit neutrality is to count the 10 years of tax increases and Medicare cuts against only 6 years of increased Obamacare spending.

While we can't pay for all the entitlement programs we already have, Obamacare adds a new entitlement providing handouts to help pay for health insurance for families with incomes as high as $88,000 a year. That is why the true 10 year cost for Obamacare is really $2.3 trillion, as Ryan explained.

Filibuster Falsehoods

The ugly in the health care summit was the transparent trap President Obama and the Democrats laid for the Republicans. Obama was not the least bit interested in anything the Republicans had to say. He filibustered for 119 minutes of the summit, talking more than all the rest of the Democrats combined at 114 minutes. The Republicans were allowed only 110 minutes to speak altogether.

And as we have seen over and over on health care, much if not most of what President Obama had to say during his filibuster was just not true. The most embarrassing was the exchange with Sen. Lamar Alexander over whether Obamacare would cause health insurance premiums to rise. After Alexander cited CBO as saying they would, Obama imperiously disputed him as "not factually accurate," and then launched into a confused and convoluted argument as to why CBO had really said health insurance premiums would be going down. "But they didn't say that the actual premiums would be going up," Obama insisted. "What they said was they'd be going down by 14 percent to 20 percent." He insisted that he was sure he was right, and that he had gone over and over this with CBO, challenging Alexander to resolve the issue publicly "before we leave today" because "this is an example of where we've got to get our facts straight."

And so it was resolved before they left that day when Sen. Jon Kyl read from the CBO report saying that premiums would indeed rise under Obamacare, and Rep. Eric Cantor tried to explain to President Obama, "We just can't afford this. This government can't afford it, businesses can't afford it." Obama then retreated to saying, well, the premiums would be higher because his plan mandated richer benefits. But that is a concession that premiums would, in fact, be rising, not a demonstration that they would be falling. In fact, premiums will soar by much more than CBO admits, as much as 100% to 200% for young workers, as mathematically demonstrated in studies by WellPoint and others, which Obama and the Democrats have refused to even consider. Yes, the whole point is that premiums would be rising because of the benefits that the Democrats would mandate. And what the public and the critics have been telling them is that we can't afford those increases, and that in many cases the same can be achieved by different means.

President Obama and HHS Secretary Kathleen Sebelius perpetrated another falsehood in criticizing high risk pools, which, when done right, provide a safety net for the uninsured who have become too sick to buy insurance anywhere else. When you concentrate all the high cost risks in one pool, Sebelius insisted, then costs in that pool become very high, and it becomes too expensive for people. But the risk pools are all subsidized by tax funds precisely because those covered by the pool can't be expected to pay all the costs themselves. The point many conservatives and Republicans have been trying to make is that rather than trying to force these high cost uninsured onto the same insurance as everyone else, and massively increasing everyone's premiums as a result, provide them their own risk pool charging no more than they can afford, and subsidize remaining costs so that the pool is a real safety net ensuring that no one need lack essential health coverage and care. Experience shows this can be done at modest cost.

But the greatest ignorance of the day was reflected when President Obama said that a "high deductible plan" is "basically not health insurance." High deductible health plans are the only real insurance, spreading the risk of the high costs affecting only a few in any one year among the entire pool. It is the retro low deductible plans, covering routine yearly expenses that most incur, that are not health insurance, but prepaid health care involving enormously counterproductive incentives and unnecessary costs. Understanding this is essential to solving the health cost problem, but, again, Obama and the Democrats have no clue.

Instead, they repeated the canard that Health Savings Accounts are not workable for the poor, when the truth is they benefit the poor the most. An HSA includes a savings account that can be used to pay for expenses below the deductible. The poor are most in need of the savings they can keep if they don't waste money unnecessarily on health care. What Democrats don't like about HSAs is that they put the patient rather than the government in charge.

Those Who Live by the Reconciliation, Die by the Reconciliation

What was really going on at the summit was reflected in the persistent, obviously pre-arranged, transparently false theme among the Democrats that, hey, you know, we are not really that far apart, there is really a lot of agreement. That was meant to set the Republicans up so the Democrats could say afterward that the Republicans refused to support Obamacare simply for partisan, political reasons, or because they really were in the pocket of industry, and so the Democrats are justified in ramming it through without them, through reconciliation. That was the real point and goal of the summit.

That didn't work because the Republicans were surprisingly good in articulating their reasons for opposing the legislation, and those reasons resonated strongly with the American people. By giving the Republicans such a high profile forum to express these reasons and their far more common sense alternatives, the summit backfired into yet another disastrous loss for Obamacare.

Reconciliation is a process solely for enacting budgetary measures to reduce the deficit, not sweeping, historic reforms involving adoption of the costliest new entitlement in history. Proceeding with President Obama's health care overhaul through reconciliation would flout Congressional rules way beyond any historical precedent.

But what is adopted by reconciliation can and will be repealed by reconciliation, setting a precedent for future entitlement reforms using the same process.

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About the Author
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.