Political Hay

Too Many Democrats in Washington

Welcome to America's real health problem.

By 12.23.09

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The Senate's votes this week on the pending government takeover of health care are highly instructive. With all 60 Democrats voting yes, and all 40 Republicans voting no, the simplistic homily that there is no difference between the parties has now proven to be a very costly fallacy.

This has been a persistent pattern all year. When campaigning for office in 2008, candidate Obama promised the American people a new era of post-partisanship, where he would bring Democrats and Republicans together to solve the nation's problems. There was nothing in Obama's ultraliberal background to suggest he would be remotely capable of this. Sure enough, since his election, this promise of post-partisanship has proven to be boob bait for the gullible.

President Obama's first initiative, the almost $1 trillion supposed "stimulus" bill, was passed on a virtual party-line vote, with almost all of the Democrats and almost none of the Republicans. Obama refused to make any significant concession to any Republican ideas for restoring economic growth. "I won the election," he told them in laughing their proposals down. But that is not what he told the voters to get their support.

A couple of weeks later, Congressional Democrats passed a $400 billion Omnibus spending bill on another party-line vote, pumping up federal spending even more. A couple of weeks after that, Congress passed President Obama's budget on a party-line vote, again with no concessions to Republicans to gain bipartisan support, again in violation of his campaign promise to voters. A few weeks after that, the same thing, as the House passed the President's cap and trade tax bill on a virtual party line vote. Then the House did the same with its health bill. Now we have the completely partisan Senate vote as well.

Here is what the Democrats are supporting in their health policy atrocity:

The Government Takeover of Health Care

Democrat apologists want to shout down anyone who calls their historic legislation a government takeover of health care. That is because that label is so devastatingly accurate in explaining the true nature of the bill.

Under the legislation, the government will be telling insurers exactly what benefits they have to cover, who they must cover, and what they can charge. The government even redistributes income among insurers under a new "risk adjustment" policy.

Moreover, the government will be telling doctors and hospitals what medical treatments will work for their patients and what won't under so-called "comparative effectiveness," as if faraway bureaucrats in Washington who don't even know you would know this better than your own doctor, who most intimately does know you. The government will be telling doctors and hospitals what medical treatments are worth the cost under so-called "cost-effectiveness." And the government will be telling doctors and hospitals what their compensation will be for the health services they provide for you, under so-called "pay for performance." They may even tell the doctors and hospitals what the total budget for your care can be under "capitation" or "global budgeting," regardless of how sick you are and what care you may need.

The government will tell you what health insurance benefits you must buy, whether you want those benefits or not, and whether you can use them or not. This will include all the costly, politically correct benefits, such as drug rehab, mental health benefits, maternity benefits for single males and grandmothers, and low deductibles and co-pays with all the wrong incentives.

The Democrats say this is not socialized medicine. But what is left that is not socialized?

Government Rationing of Your Health Care

The government rationing of health care is more overt in the Senate bill than ever before, following what this column has predicted for over a year now. As Betsy McCaughey wrote on December 18 in the New York Post, "Forget the public option, abortion, and all the other divisive questions in the health care debate: The most important issue for patients and their doctors is the transfer of decision-making power from the bedside to the federal government."

The Senate bill requires every American not covered by a government health program to enroll in a "qualified" health insurance plan. Page 149 of the Senate bill states that "qualified" health plans can do business only with a doctor who "implements such mechanisms to improve health care quality as the Secretary [of Health and Human Services] may by regulation require." As McCaughey explains:

But "mechanisms to improve health-care quality" cover everything in medicine…. Now, in the name of quality, the Secretary of Health and Human Services would be empowered to regulate your MD's decisions on everything from cardiac and cancer care to childbirth. The delegation of power is so broad, it's conceivable that Washington will be telling your cardiologist when its appropriate to use stents or imaging tests -- and directing your gynecologist about the use of pelvic sonograms.

McCaughey adds, "Page 1189 [of the Senate bill] gives the Secretary of Health and Human Services 'authority to modify or eliminate coverage of certain preventive services,' based on what the U.S. Preventive Services Task Force recommends. This is the same group that just called for cutting back on mammograms." When news of that mammogram recommendation broke, HHS Secretary Kathleen Sebelius sought to mollify everybody by saying not to worry, it would not have the force of law. But under the Senate health bill, now it would.

But the problem is even worse and more fundamental than this. The health bill would sharply constrict payments to doctors, hospitals, specialists, health equipment manufacturers and other health providers. This would result from the expansion of Medicaid to 15-20 million more people, the $800 billion in Medicare cuts over the first full 10 years of implementation, any public option included in the final bill, and the new pay for performance, capitation, and global budgeting payment systems. With those constricted resources, doctors, hospitals, specialists, and others will no longer have the finances to provide the standard of care to which the American people are accustomed.

Moreover, these constricted payments will slaughter any incentive to invest in health care. As McCaughey further explains, "Whatever your age, and whether you are in a public program or the richest 'Cadillac' plan, you'll also lose out if you need to be hospitalized -- you'll find fewer nurses on the floor, less diagnostic equipment, longer waits for tests and an overall environment of scarcity….In the end, all patients will suffer when hospitals are dirtier, ill equipped, and understaffed."

The Wall Street Journal added in an editorial on Monday,

With so large a chunk of the economy and medical practice itself in Washington's hands, quality will decline. Ultimately, "our capacity to innovate and develop new therapies would suffer most of all," as Harvard Medical School Dean Jeffrey Flier recently wrote in our pages….Democrats believe that more advanced health technologies like MRI machines and drug- coated stents are driving costs too high, though patients and their physicians might disagree….For no other reason than ideological animus, doctor owned hospitals will face harsh new limits on their growth and who they're allowed to treat. Physician Hospitals of America says that ObamaCare will "destroy over 200 of America's best and safest hospitals."

Indeed, Richard Foster, Chief Actuary for Medicare, issued a report on November 13 documenting the severe impact the bill would have on hospitals.

Americans today enjoy the best, most advanced health care in the world. That is why people come here from socialized medicine systems all over the world, when they are really sick and need the most advanced care. And that is why these other health care systems copy our health care innovations and breakthroughs. This is a key component of the high standard of living Americans have enjoyed.

But that will be gone under this Democrat socialized medicine bill. Instead you will suffer the equal sharing of misery that the Democrats mistake for social justice, as our current system is looted and sacked, with the resources redistributed to where the Democrats think they can buy more votes than by spending huge sums on seriously ill people that need truly advanced medical care to save their lives.

Higher, Not Lower Costs

President Obama continues trying to sell his government takeover of health care with the counterintuitive claim that it will reduce health costs. "Anybody who says otherwise simply hasn't read the bills," he said last weekend, a shockingly ridiculous statement given how Congressional Democrats have been hiding the various versions of the bill until springing them just before a vote.

Health insurance premiums will soar after the bill passes because of costly new regulations and taxes on health insurance, increased cost shifting from the expanded and new government programs, counterproductive incentives, and the high costs of the politically correct mandated benefit plan. As the Wall Street Journal explained on Monday:

The best and most rigorous cost analysis was recently released by the insurer Well-Point, which mined its actuarial data in various regional markets to model the Senate bill. WellPoint found that a healthy 25-year-old in Milwaukee buying coverage on the individual market will see his costs rise by 178%. A small business based in Richmond with eight employees in average health will see a 23% increase. Insurance costs for a 40-year-old family with two kids living in Indianapolis will pay 106% more.

Many other studies now have accumulated to show the same thing. As indicated, younger workers will be hurt the most with their premiums, which they will be required by law to pay, increasing 2 to 3 times. That is because today their health insurance is relatively inexpensive due to their low health costs on average. But the bill would prohibit insurers from continuing to provide this benefit to younger workers, with the increased money from the young, already paying so much for Social Security and Medicare, redistributed elsewhere.

During last year's campaign, President Obama pledged a health reform plan that would reduce health insurance costs by $2,500 per year per family. If health insurance costs soar under his plan instead, wouldn't it be reasonable to ask him to resign for defrauding his way into office?

Notice also that you do not hear President Obama say anymore that if you like your health insurance plan you can keep it. That is because in the face of these soaring costs, employers will have powerful incentives to save substantial costs by dropping their coverage and paying the fines for doing so. The Chief Actuary of Medicare also estimates that 9-10 million seniors will lose their Medicare Advantage plans because of the steep cuts for those plans under the legislation. Would it not be reasonable for those who lose their health coverage under his health plan, contrary to his promises, to ask him to resign?

Big Government Bureaucracy and Runaway Federal Spending

The bill proves the Republicans so, so right in their argument that the Democrats are the party of Big Government bureaucracy and runaway government spending. The bill would create close to 100 new bureaucracies and government programs, and spend $2.5 to $3 trillion over the first 10 years of full implementation.

We can't pay for all the entitlement promises we have already made. But instead of trying to fix that, the Democrats are pouring gasoline on the bonfire in this bill. It would expand Medicaid to another 15-20 million people, adopt an entirely new entitlement subsidizing the purchase of health insurance for families making as much as $96,000 in 2016, and add still another entitlement for long-term care.

The central promise of President Obama's campaign last year was that he wouldn't increase taxes "in any form" on those making less than $250,000 per year. But the health bill includes increased taxes on health insurance, drugs, and medical devices that will be paid by consumers. It also imposes a mandate that individuals must buy insurance and pay the soaring costs, or else pay income tax penalties. If President Obama signs this bill violating his central campaign pledge, wouldn't it be reasonable to ask him to resign now, instead of waiting another 3 years to vote him out of office?

All Completely Unnecessary

This government takeover of health care, government health care rationing, higher health costs, exploding bureaucracy, runaway government spending and record tax increases are what the supposed moderate Democrat and blue dog frauds are now supporting. That includes Senators Evan Bayh of Indiana, Blanch Lincoln of Arkansas, Ben Nelson of Nebraska, Jim Webb and Mark Warner of Virginia, and other phonies who have duped the voters of their state. Worst of all, the health bill's broad sweep of runaway government is all completely unnecessary to achieve the supposed goal of ensuring essential health coverage and care to everyone, which can actually be done far better with a true health care safety net.

Only about 12 million uninsured Americans arguably cannot afford health insurance today. The rest are already eligible for government coverage, or employer coverage, or make over $75,000 per year. We already have a government program that is supposed to provide health coverage for the poor, Medicaid, with costs soon approaching $500 billion per year, and exploding in future years. Reform Medicaid to provide assistance to buy health insurance for all of those who can't afford it today. This could be done for relatively little in additional costs. Yet all of the poor would be much better off, because they would enjoy the same health care as the middle class, with the same private insurance, freed from the Medicaid ghetto where almost half of all doctors and hospitals won't treat them because of the low compensation paid by the government.

Back this up with state uninsurable risk pools for those who nevertheless do not buy coverage and become too sick to do so. This would ensure that everyone has some place to go for essential coverage and care in any event. The insured would pay what they can to such pools based on their income, with the state covering all remaining costs. Few actually end up truly uninsurable, so this ultimate safety net can be provided at relatively little extra cost as well.

The law has long provided that insurance companies cannot cut off those they have accepted for coverage once they get sick with expensive conditions, absent fraud in the original insurance application. That would not be true health insurance protecting against unexpected health costs, like fire insurance that can be cut off once your house catches fire. This law was federalized under the Kennedy-Kassebaum legislation in the mid-1990s. To the extent there are any loopholes, they should be closed.

For over 25 years, John Goodman at the National Center for Policy Analysis has articulately advocated these and other reforms liberating patients to exercise maximum freedom and control over their own health care, doctors and hospitals to innovate to provide better and lower cost care, and employers to provide better deals to their workers at lower costs. Jim Frogue at Newt Gingrich's Center for Health Transformation, Merrill Matthews at the Council for Affordable Health Care, and Greg Scandlen at the Heartland Institute have similarly provided innovative, pathbreaking leadership on health policy that would truly help working people and the poor on health care.

But instead the American people suffer with too many Democrats in power who don't understand any of this, and won't listen to any new ideas from anybody. Harry Reid clearly has no idea what he is talking about on the issue. Nancy Pelosi as usual is lost in her own dream world. Florida Congressman Alan Grayson and Rhode Island Sen. Sheldon Whitehouse cannot even talk sensibly on the subject. Only the American people can fix this, and they can start by demanding resignations from those who have not been honest with them. This includes those who now plan to vote against the bill after voting for it, claiming they were against it all along.

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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.