While until this point most of the health care focus has been on
the Senate side, today the House Democrats released a draft of
their own plan. I just read through the
outline, though you can check out the full 850 pages
here. The short version is that there's a reason that
liberals like it -- it reads like their Christmas wish list.
The trouble is, that it doesn't explain how Democrats expect to
pay for the legislation. And if the Congressional Budget Office's
valuation of the various Senate bills is any indication, the
price tag will be off the charts. Okay, so here are more details.
Most significantly, the House bill includes a government plan at
a time when there's an emerging consensus that there's not enough
votes to get one through the Senate. House Democrats claim that
the plan would be "self‐sustaining ‐‐ financed only by its
premiums" and thus be on a "level playing field" to compete with
private insurers. Of course, in real life, we have to assume that
the government plan will ultimately have access to general
government revenues if it's in any danger of failing. A good
example is Fannie Mae and Freddie Mac. Though they operated as
private companies, they benefited from the implicit backing of
government, which allowed them to become the dominate players
mortgage market. While the companies' Democratic defenders
brushed aside conservative critics who claimed it was in effect a
government enterprise, when push came to shove, government did
step in to bail out the companies because they had a piece of a
majority of mortgages in America. When private insurers can't
make a profit they go out of business. But who in reality thinks
the government plan will be allowed to fold if it's losing money?
Is government going to close a plan that provides health
insurance to tens of millions of Americans or is it going to pump
general revenues into saving it? Anybody who is being
intellectually honest knows the answer to that. Private insurers
trying to compete against a government plan would be like a
gambler trying to beat the house -- over time, the house always
wins.
The bill also calls for the creation of a national,
government-run insurance exchange, in which individuals would
receive government subsidies to purchase either the government
plan or chose among government-designed private plans. The
subsidies would be on a sliding scale and go up to 400 percent of
the poverty level ($43,000 for an individual or $88,000 for a
family of four), which is at the midpoint of the range being
advanced in the two Senate bills. One key fact worth
highlighting: "Over time, the Exchange will be opened to all
employers as another choice for covering their employees." This
directly contradicts President Obama's pledge that everybody who
is happy with the health care they receive can keep it. About 63
percent of covered Americans get their insurance through their
employers, meaning that encouraging employers to dump workers
into the government run exchange will effectively threaten the
current health care plans of most of the covered population.
The plan would also bar insurers from excluding those with
preexisting conditions or charge them different rates based on
their health status, and it would create federal mandates forcing
individuals to purchase health care and empoyers to cover their
workers or pay a tax.
Curiously the plan calls for, "More training of primary care
doctors and an expansion of the pipeline of individuals going
into health professions, including primary care, nursing and
public health..." But the biggest problem in attracting more
medical students to go into primary care is that Medicare has
driven down reimbursement rates for physicians, and instead of
dealing with this problem, the bill would actually exacerbate it
by allowing the government plan to reimburse doctors at rates
"similar" to
Medicare levels. Typical liberal thinking -- government
policy creates a problem and the solution is yet more government.
The plan also calls for a massive expansion of Medicaid to 133
percent of the poverty level. "Recognizing the budget challenges
in many states," the outline reads, "this expansion will be fully
federally financed."
Of course, this triggers the question: "financed how"? The
federal government, as you know, is not awash in cash these days.
Well, the outline conveniently leaves out that tricky financing
part. Though we now know that among other new taxes, they are
considering a national sales tax (or VAT), a prospect that I
wrote about
earlier.
