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.