Monday, November 30, 2009

Health bills fail to block illegals from coverage

Hundreds of thousands of illegal immigrants could receive health care coverage from their employers under the bills winding their way through Congress, despite President Obama's explicit pledge that illegal immigrants would not benefit.
The House bill mandates, and the Senate bill strongly encourages, businesses to extend health care coverage to all employees. But the bills do not have exemptions to screen out illegal immigrants, who usually obtain jobs by using false identities and are indistinguishable from legal workers.
A rough estimate by the Center for Immigration Studies suggests that the practical effect of the mandates would be that about 1 million illegal immigrants could obtain health insurance coverage through their employers.
Democrats who wrote the House bill said that employer coverage for illegal immigrants is not intentional, but rather the outcome of people breaking the law.
"It's possible an employee could deceive an employer with a fraudulent document, just as under current law, to gain employment, just as it's possible for all sorts of criminal activity to occur, and why we have law enforcement," said Nadeam Elshami, a spokesman for House Speaker Nancy Pelosi, California Democrat, who wrote the final House bill.
Republicans said that loopholes in the bill could allow coverage to just about any illegal immigrant who wants to cheat the system.
"This is a complete cover-all-the-gaps federal health insurance for illegals, whether it be under Medicaid, the refundable tax credit or whether it be under their employers who would not be able to verify their employers unless we fix E-Verify," said Rep. Steve King of Iowa, the top Republican on the House Judiciary Committee's immigration subcommittee.
How to deal with immigrants, both legal and illegal, remains one of the thorniest issues in the health care debate. In his address to a joint session of Congress in September, Mr. Obama specifically challenged Republicans who said his plans would extend coverage to illegal immigrants.
"This, too, is false -- the reforms I'm proposing would not apply to those who are here illegally," Mr. Obama said.
That statement elicited an outburst of "You lie" from Rep. Joe Wilson, South Carolina Republican.
That statement elicited an outburst of "You lie" from Rep. Joe Wilson, South Carolina Republican.
Most of the focus has been on whether the bills in the House and Senate go far enough to screen out illegal immigrants applying for public benefits. The Senate bill is generally considered to have stronger provisions than the House version to exclude participation by illegal immigrants.
The employer mandate could play a major role in coverage for illegal immigrants, but the effect has not been widely understood.
Steven A. Camarota, research director for the Center for Immigration Studies, said about 6.5 million illegal immigrants work in the United States, though nearly half do so off the books and wouldn't be counted for purposes of employer-sponsored health insurance.
Of those who work on the books, about 2.3 million already have insurance through their employers. That leaves at least 1 million who would need insurance and could obtain it from an employer under the proposed mandates.
"It's definitely significant," Mr. Camarota said.
Democrats said their bill doesn't change eligibility for benefits for illegal immigrants but it does change laws on who must provide insurance. Any employer with a payroll higher than $500,000 would be required to provide insurance for employees.
The House bill offers tax credits for two years to help small businesses provide insurance, including businesses that hire illegal immigrants.
But Mr. Elshami said businesses are already prohibited from hiring of illegal immigrants.
The Senate bill is more complex. It would urge companies to provide insurance, then penalize them for each employee who applies for credits for the health care exchange.
Jim Manley, a spokesman for Senate Majority Leader Harry Reid, Nevada Democrat, said the bill includes a screening process to keep illegal immigrants from getting credits in the health care exchange. But even illegal immigrants would be counted in the penalty against employers, so companies would be paying for having hired them.
"In this scenario, an employer would have to provide a responsibility payment for an undocumented worker. But that undocumented worker wouldn't be getting coverage through the exchange," Mr. Manley said.
Robert Rector, a senior research fellow at the Heritage Foundation, called the debate "an absolute charade" because Mr. Obama and Democratic leaders have signaled their intent to try to pass a bill legalizing illegal immigrants next year.
Once their legal status is secured, Congress would have to decide their eligibility for public benefits. Democrats have been pushing for broad inclusion, and their health care proposals give equal treatment to legal immigrants and citizens.
Republicans say the government should do more to push for a legal work force in the first place.
"If it was not bad enough that illegal immigrants take jobs that rightfully belong to citizens and legal immigrants, now they will get health care benefits that should go to Americans," said Rep. Lamar Smith of Texas, the top Republican on the House Judiciary Committee. "If they were not in the country, we wouldn't have to worry about emergency room or health insurance costs at all. And Americans would have these jobs."
A Congressional Research Service report notes that the House Democrats' bill does not expressly prohibit illegal immigrants from getting health insurance and, in fact, would mandate that they obtain insurance if they meet the "substantial presence test."
That test calculates U.S. residency based on the number of days per year a person is in the country.

Friday, November 27, 2009

Big Pharma Sells Out

A business ad campaign could defeat ObamaCare, which is falling in polls.

However the Senate's health-care debate pans out, we'll wager this prediction: The pharmaceutical executives who have endorsed this exercise will eventually be exposed as among the most shortsighted CEOs in the history of capitalism.
In June, the Pharmaceutical Research and Manufacturers of America sealed a deal with the White House and Senate Finance Chairman Max Baucus promising to contribute $80 billion in lower drug costs over the next decade to ObamaCare, plus a multimillion-dollar TV ad campaign. In return they were to be spared from price controls and the reimportation of cheaper foreign drugs.
The loophole is that the deal didn't include the House, and now it may fall apart in the Senate. But even if it does somehow survive, by now it is obvious that the industry's political protection will last only as long as it takes to pass a bill, whereupon the same politicians who are trying to override this deal will get back to work.
"You've heard that as a consequence of our efforts at reform, the pharmaceutical industry has already said they're willing to put $80 billion on the table," President Obama said in July. "We might be able to get $100 billion out or more."
Led by Henry Waxman, the House saw that and raised: The bill that passed earlier this month extracts as much as $150 billion from the industry, including demands for a 23.1% "discount" when Medicare buys prescription drugs for some seniors (much like Medicaid imposes now) and gives the government the power to "negotiate" lower prices for everyone.
The pharma lobby was unfazed. "Despite the shortcomings in the House legislation, we remain completely committed to helping the President and Congress pass comprehensive health care reform this year," a senior vice president said in a statement. "This is a three-act play and a good critic doesn't write a review after the opening scenes."
But now the curtain is coming down. The Senate bill is only going to grow more expensive on the floor. Given that Harry Reid is even relying on a 5% "botax" on cosmetic surgery, the drug makers will become ever more appealing targets as the search for revenue to make ObamaCare appear to be deficit neutral grows more desperate.
Meanwhile, the AARP and its media stenographers are levelling allegations that drug makers are already jacking up prices for brand-name prescriptions. John McCain and Olympia Snowe are cosponsoring a bill with Byron Dorgan that would allow pharmacies and wholesalers to import medications from Canada and Europe.
So how has the industry responded? More or less as Lenin predicted. Big Pharma is now running ads against Joe Lieberman, saying his threat to torpedo the Senate bill could cause drug prices to rise by 20%. It is also funding a campaign that targets the fence-sitters Ben Nelson, Mary Landrieu and Blanche Lincoln.
In other words, the industry is trashing the very Senators who stand the best chance to rescue it from government control. Instead, the drug CEOs are making themselves complicit with the Washington mentality of seeing only the costs of medications, not benefits like longer lives or fewer hospitalizations. They are ensuring that they will always be a political target and making the extortion easier in the bargain.
The shame is that there be will fewer resources for the research and development that drives innovation, particularly for the smaller biotech companies that are the future of cutting-edge medicine. When it takes about a decade and a billion dollars to bring a new drug to market, a CEO of a smaller drug company told us recently, most firms are "living on the edge of extinction."
Associated Press
Pfizer CEO Jeffrey Kindler

But it is the biggest players who are engaged in political gamesmanship. At a speech in February at the Economic Club of Chicago, Pfizer CEO Jeffrey Kindler laid out what he called his company's "new approach to legislation and public policy." Rehearsing the health industry's role in stopping HillaryCare in 1994, he announced that the difference this time is that pharma will be "actively supporting appropriate reforms, rather than simply trying to stop things we don't agree with."
Mr. Kindler, a lawyer and former McDonald's executive, went on to endorse even such political inspirations as comparative effectiveness research, which while fine in theory will inevitably be used to "prove" that more expensive medications aren't worth the costs to government when ObamaCare's spending detonates. In England, these kinds of studies were used to try to ban Pfizer's Stutent, a treatment for kidney cancer. The Senate bill contains a Medicare commission with a mandate to go after drugs, though only about 10 cents of every U.S. health dollar goes toward prescriptions.
The irony is that if business began to educate the public about what the current bills will mean for U.S. health care, it might be able to defeat them and force a more modest, sensible reform. National Journal's composite of all health polling finds that 50.9% of the public now opposes health reform in general, up from about 15% in February. Only 43.9% are in favor. The most recent polls put support even lower: Just 35% from Quinnipiac, 38% from Rasmussen.
A Washington Post-ABC poll found that 52% of the public believes ObamaCare will increase their personal health costs and that 37% expect their quality of care will deteriorate. They're right. A survey of registered voters by Public Opinion Strategies found that the more people hear about the plan, the less they like it, and that voter hostility is higher now than it ever was for HillaryCare.
Yet now this son of HillaryCare is headed toward passage, and when shareholders start griping about lousy returns, Mr. Kindler and his fellow executives will be long gone. It's one more reminder that when it comes to protecting economic freedom, you can never trust big business. The biggest losers will be patients, who lack the millions to lobby Congress and in the future will have fewer innovative medicines.


Wednesday, November 25, 2009

Most Opposed to Healthcare Legislation

WASHINGTON — As the debate over a health care bill enters a critical stage, a new USA TODAY/Gallup Poll finds Americans inclined to oppose congressional passage of the legislation this year.
The survey, taken Friday through Sunday, finds 42% against a bill, 35% in support of it. Despite nearly a year of presidential speeches, congressional hearings and TV ad campaigns by interest groups, more than one in five still doesn't have a strong opinion.
When pressed about how they were leaning, 49% overall said they would urge their member of Congress to vote against a bill; 44% would urge a vote for it.

The findings underscore the difficult battle ahead as President Obama presses Congress to enact the legislation by the end of the year. The House passed its version this month, and Senate debate on its health care bill is slated to start in earnest next week. A sharp partisan divide in public opinion helps explain the mostly party-line votes in Congress.
Those Democrats surveyed were overwhelmingly in favor of a bill: 76% to 17%. By an even wider margin, 86% to 12%, Republicans were opposed. Independents were against it by 53% to 37%.
Obama has seen his approval rating on handling health care policy slide a bit since the summer. Now, 40% approve, 53% disapprove, down from a 44% approval rating in July.
The poll of 1,017 adults, taken by landline and cellphone, has a margin of error of +/— 4 percentage points.
For more results from the poll, see Wednesday's USA TODAY.

Winner take all on healthcare

Trying to come up with bipartisan compromise is a a losing game. Let both sides place their bets -- and one will pay the price.

Reid's Numbers Game: To Public Option, Or Not?

Democrats may have scored a big victory on the first Senate health care overhaul vote, but party unity lasted only as long as it took to bring down the gavel on Saturday's vote.
Sixty senators -- exactly the number needed to pass a bill -- voted Saturday night to move forward with debate. But even as they voted yes on this first procedural votes, several Democrats warned they'll vote no on the next vote if the bill isn't changed.
"I'm prepared to vote against moving to the next stage of consideration as long as a government-run public option is included," said Sen. Blanche Lincoln, D-Neb., who has been a swing Democratic vote on the Senate's bill.

Tuesday, November 24, 2009

Liberals and Mammography

Rationing? What rationing?

The flap over breast cancer screening has provided a fascinating insight into the political future of ObamaCare. Specifically, the political left supports such medical rationing even as it disavows that any such thing is happening.
No sooner had the Health and Human Services Department's U.S. Preventative Services Task Force recommended against mammography for women under 50 than Secretary Kathleen Sebelius rushed to say don't worry. The decision had "caused a great deal of confusion and worry among women," she said, promising that no policies would change. New Jersey's Frank Pallone vowed to hold hearings, and Senator Dick Durbin leveled the gravest charge Democrats can make: The task force was "appointed by President Bush."
The political duck-and-cover was also on display in that vanguard of ObamaCare known as the New York Times, which ran at least four much-ado-about-nothing items even as it endorsed the reduced screening. On the same day as an editorial and op-ed, a front-page "news analysis" lectured that what the public really needs is "a transformational shift in thinking" about the "evidence-based" medical future that the mammogram decision portends. Yes, and no doubt the Times will tell us what "evidence" to follow.
Even more revealing was Princeton's Uwe Reinhardt, a leading liberal health-care economist, writing on the New York Times Economix blog. Mr. Reinhardt sees the task force's handiwork as an exemplar of "rational decision-making" that had nothing to do with cost analysis, even as he claimed that rationing based on cost is inevitable.
You have to admire Mr. Reinhardt's partisan dexterity. He knows that no government task force is ever going to justify a treatment denial with an overt claim to costs. Instead, the task force found a sneaky way to use clinical data to take costs into account without admitting it. It cites all sorts of harm associated with the problem of "overdiagnosis"—i.e., too many costly procedures. This is a reference to mammograms that lead to further tests and treatments that in hindsight are unnecessary.
The HHS task force concludes that this harm outweighs the benefits of saving lives through early detection, yet this makes little sense unless financial costs are a priority. For instance, the panel cites patient anxiety from false positives, yet the literature also shows overwhelmingly that women would rather risk a scare than allow a cancer to progress—especially considering that about 75% of all breast cancers develop in women who do not have special risk factors.
In any event, the distinction between cost effectiveness and clinical effectiveness will be moot if ObamaCare passes. The House bill gives the HHS task force the mandate to review "the benefits, effectiveness, appropriateness, and costs of clinical preventive services" in making its de facto insurance coverage rulings. As Mr. Reinhardt notes, "at some point soon the rising cost of American health care actually will force Americans to bring monetary costs into the analysis as well."
What's really going on here is that the left knows its designs will require political rationing of care, but it doesn't want the public to figure this out until ObamaCare passes. Then it will begin the campaign to instruct the rest of us that we must follow the guidance of Princeton professors about what medical care we can receive. Americans will simply have to accept that the price of government-run health care in the name of redistributive justice is that patients and their doctors must bow to the superior wisdom of HHS task forces.
Just don't admit it until after the White House signing ceremony.


The Other Senate Maverick

Joe Lieberman is a party apostate on health care.

When John McCain ran for president, he positioned himself as "the original maverick." The dissenting votes that so annoyed his fellow Republicans—on tax cuts, campaign-finance reform, offshore drilling—were hailed as evidence of these maverick credentials.
But there may be another man in Washington who better deserves the maverick label. Sen. Joe Lieberman. Once the Democrats' nominee for vice president, today Mr. Lieberman is arguably the most hated man in that party because he is threatening to filibuster the health-care bill.
On NBC's "Meet the Press" this Sunday, Mr. Lieberman was pretty categorical. "If the public option is still in there," he said, "the only resort we have is to say no at the end to voting the bill off the floor."
Technically, Mr. Lieberman has not been a Democrat since he lost the 2006 Democratic primary in Connecticut and then ran and won as an independent. Nevertheless, he still caucuses with the Democrats. Indeed, Sen. Tom Harkin (D., Iowa) tartly notes that Mr. Lieberman enjoys his chairmanship of the Homeland Security Committee only because the Democrats let him.
The decision to let Mr. Lieberman keep a juicy chairmanship was a calculation by Senate Majority Leader Harry Reid to keep Mr. Lieberman in the Democratic fold. It wasn't an unreasonable calculation. On most issues—from abortion and marriage to the stimulus and union-related legislation—Mr. Lieberman largely votes with the Democrats.
Still, there are issues, and there are issues. However much Mr. McCain may have departed from Republican orthodoxy, it wasn't enough to deny him his party's presidential nomination. By contrast, Mr. Lieberman is proving himself a maverick on the kind of tribal issues that define today's Democratic Party.
First, at a time when Democrats were pushing for withdrawal, Mr. Lieberman spoke up publicly in support of a more aggressive plan for victory in Iraq. He then backed Mr. McCain for president at the expense of the Democratic candidate, who also happened to be the first African American to win the nomination of a major party. Now he threatens to filibuster what for many Democrats is the Holy Grail: a vast new health-care entitlement.
Associated Press
Sen. Joe Lieberman

Conservatives and Republicans rattle off any number of objections to the bill: It would bust the budget; it would force many families to replace private coverage with government; it would subsidize abortion; it would ration care, etc. These are all variations on the major argument: It's not going to work.
None of this really persuades Democrats, because they see it differently. For Democrats, getting a big health-care bill to Barack Obama's desk is akin to FDR's signing the Social Security Act.
Never mind if it costs too much or has some bad consequences. Ask yourself this: Whether it's Social Security or public education, when have Democrats ever cared whether government programs are meeting their goals? The important thing is that massive health-care spending shows they care.
So when Mr. Lieberman says he's going to filibuster, he's not just working against a piece of legislation. He's taking on an almost religious faith—and the opportunity to push through something Democrats believe will secure their place in history.
In fairness to the Democrats, it's hardly unreasonable to be irritated with a man who endorses a Republican for president and opposes Democrats on its signature issues. Surely, however, these signature issues speak to what has happened to the Democratic Party. It wasn't so long ago that the centrist Democratic Leadership Council was thought to be the party's future.
That's all vanished now, and with it the Democratic center. Though there are still Democrats who have centrist voting records, they have no movement. The animating philosophy today comes from Netroots Nation, MoveOn, and so on. Were it not for the war, Mr. Lieberman likely would never have lost the 2006 Democratic primary, or become the maverick on gut Democratic issues.
In the end, that primary may have been the liberation of Joe Lieberman. Tom Scott, a former Republican state senator in Connecticut who now runs a Web site on state politics (, thinks Mr. Lieberman's position on health care puts him in a strong position at home. In 1988, Mr. Scott played an important role in helping Mr. Lieberman win his Senate seat when Mr. Scott endorsed him over the liberal Republican incumbent, Lowell Weicker.
"If Joe plays a central role in defeating this health-care bill," says Mr. Scott, "he has a good chance of getting the Republican nomination [for Senate]—and still getting all those Democrats and independents who would vote for him no matter what party is by his name on the ballot."
May be just another of this bill's many unintended consequences.
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On Health Care, Should Dems Fear Failure or Success?

In fear of death, Democrats risk political suicide.

By Rich Lowry

EDITOR’S NOTE: This column is available exclusively through King Features Syndicate. For permission to reprint or excerpt this copyrighted material, please contact:, or phone 800-708-7311, ext. 246.

Otto von Bismarck at one point called the prospect of Germany waging preventive war against other European powers “committing suicide out of fear of death.”

Little did the Iron Chancellor know that he was forecasting 21st-century Democratic political strategy. Democrats so fear the consequences of failing to pass Obamacare that they’ve convinced themselves that embracing $370 billion worth of tax increases and more than $400 billion worth of Medicare cuts is good for them. This will long make for a compelling case study in the Annals of Abnormal Political Psychology.

Tax hikes undid Presidents George H. W. Bush and Bill Clinton (Bush lost his presidency, Clinton his congressional majority), and Medicare cuts undid Speaker Newt Gingrich (taking the air out of his “Republican revolution”). All of those figures undertook their foolhardy exertions in order to reduce the deficit. Democrats will ingest their double dose of taxes and Medicare cuts on behalf of legislation that almost certainly will increase an already $1 trillion deficit. It’s fiscal pain for no fiscal gain.

If Democrats can’t afford failure on this course, what makes them think they can afford success? They created a hellish dilemma for themselves by refusing to scale back their bill once it became persistently unpopular. Take half a loaf, disarm your critics, call it victory. How complicated is that? As Pres. Ronald Reagan said, “There are simple answers, just not easy ones.” And it wouldn’t have been easy to wean the Democratic core from its perfervid dream of nationalized health care.

As it stands now, the sprawling monstrosity of Democratic health-care reform violates almost every major reassurance Pres. Barack Obama has made about it. Its latest iteration, the Reid bill in the Senate, costs more than $1 trillion over ten years when fully implemented; bends the cost curve up; covers abortion; and knocks people out of their current coverage.

For all that, it only covers half the uninsured. Republican Sen. Tom Coburn counts no fewer than eleven studies that say provisions in the bill will raise premiums. According to the Kaiser Family Foundation, a family of four headed by a breadwinner making $66,000 annually still would pay almost 10 percent of its income on health insurance — even after it gets a federal subsidy.

If Obama meant his major promises about health care, he’d start over. But all his soothing words were just sugar to make the medicine of a vast left-wing project go down in a center-right country. Pres. George W. Bush had his “16 words,” a one-sentence dubious claim in a State of the Union address for which he caught hell for years; Obama has his “5,427 words,” his health-care address to a joint session of Congress, shot through with misrepresentations and false assurances.

The White House has lived up to its promise of “post-partisanship” in only one sense. It’s wielding health care as a wedge issue against its own side, forcing moderates like Arkansas
Sen. Blanche Lincoln into possibly career-ending votes out of fear of an aroused liberal base. Her moderate compatriot Sen. Mary Landrieu of Louisiana was simply bought off — for a mere $300 million, cheap by today’s standards — on the first key Senate procedural vote. She maintains she still doesn’t necessarily support the underlying bill, apparently in the tradition of former Louisiana Sen. John Breaux, who said his vote couldn’t be bought, only rented.

Democrats desperately want to keep the health-care debate from dragging too far into next year. Obama plans to pivot onto jobs and deficit reduction come January. This shift will be even more ludicrously incredible if he’s still occupied with creating a new entitlement set to grow at 8 percent a year and cost $2.5 trillion during its first ten years of full operation. As Democratic Sen. Dick Durbin said, in an understatement, in 2010 the health-care debate becomes “more complex.”

When they elected Obama, most voters wanted competence, bipartisanship, sobriety, and responsibility. On health care he’s 0
4, but the only option the Democrats have is to keep going. In fear of death, they’ll risk suicide.
Rich Lowry is the editor of National Review. © 2009 by King Features Syndicate

The Democrats' Health Care Delusion

By Rich Lowry
Saturday night's health-care vote in the Senate was a theatrical fizzle. Sure, Majority Leader Harry Reid made senators sit at their desks for their vote to create a sense of "history" -- but everyone knew that he'd get the 60 votes he needed to start debate on ObamaCare.
If a $100 million Medicaid payoff to her state wasn't enough to keep Louisiana Sen. Mary Landrieu bought for at least a few days, there truly is no honor among thieves. Landrieu bragged about her swag, calculating that the "Lousiana Purchase" was really worth $300 million.

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The two other centrist Democrats whose votes were in doubt -- Blanche Lincoln of Arkansas and Ben Nelson of Nebraska -- took refuge in the explanation that they had only a Socratic interest in opening a debate on the bill, and who could be against that?
But there was real drama Saturday -- the same drama playing out every day the Democrats persist in the political and fiscal heedlessness that characterizes their push for ObamaCare. It's as if they don't realize that they're led by a marginally popular president (dipping below 50 percent public approval in the Gallup poll last week for the first time), are deeply unpopular themselves and are pushing for legislation that is opposed by more people than support it in almost every single opinion poll.
But they do realize it -- they just don't care. They've talked themselves into the ludicrously self-delusional notion that what ails them and the president is that they haven't yet passed the hundreds of billions of dollars of tax hikes and Medicare cuts that finance (albeit incompletely) ObamaCare.
This will long be a case study in the annals of abnormal political psychology. Tax hikes undid George H.W. Bush and Bill Clinton (Bush lost his presidency, Clinton his congressional majority), and Medicare cuts undid Newt Gingrich (taking the air out of his "Republican revolution"). Obama's Democrats are prescribing themselves a strong dose of both, in an exercise in self-destructive quackery.
They believe that Obama can't afford failure, that's it's the defeat of ClintonCare that killed the Democrats in 1994. But such are the grave political and substantive flaws of ObamaCare that Democrats can't afford success or failure.
If they pass it, they have tax hikes and Medicare cuts around their necks, as well as the increased insurance premiums the bill is sure to cause. If they fail, they've demonstrated their own ineffectual ideological fervor, while still putting themselves on record in favor of tax increases and Medicare cuts.
The Democrats got themselves into this hellish dilemma by not taking the obvious step of scaling back the bill once it became clear it engendered fierce public resistance. Take half a loaf, disarm your critics, call it victory, hail yourselves at the signing ceremony -- and come back for more later. It's not complicated.
Instead, they've stayed on a maximalist course. They've pushed to the point where the effort could collapse -- and, even if they succeed, they'll have done themselves and the nation's fiscal future grave harm.
This is the other element of the drama that inheres in the health-care debate: If it passes, people years and even decades from now will look back and ask, "What were they thinking?" It's a rare opportunity to see a train wreck at its inception, as the conductors make the decisions with malice afterthought that will ramify disastrously.
Everyone agrees that the nation is on an unsustainable fiscal path. So Democrats will add a $2.5 trillion entitlement to hurry us further along the path. Tax hikes that could go to reducing the deficit they'll plow into the new entitlement. Medicare cuts that could shore up Medicare's own shaky finances, they'll plow into the entitlement too (if the cuts happen at all). The new entitlement will grow at a projected 8 percent a year, and it's only through gimmickry it's made to look deficit neutral in the first decade. The cost curve of health care will be bent up, and insurance premiums, too, will rise. For all of this, ObamaCare will still leave 24 million people without health insurance.
If nothing else, watching the Democrats sacrifice so much on behalf of this monstrosity is fascinating, appalling -- and dramatic. Common sense suggests that they shouldn't do it. The basic laws of political physics say they can't do it. And yet on they march.

Monday, November 23, 2009

Lieberman's Stand: No Public Option

[Sen. Joe Lieberman talks to the press after a Democratic policy luncheon on Oct. 27.] Getty Images
Sen. Joe Lieberman talks to the press after a Democratic policy luncheon on Oct. 27.
Sen. Joseph Lieberman, speaking in that trademark sonorous baritone, utters a simple statement that translates into real trouble for Democratic leaders: "I'm going to be stubborn on this."
Stubborn, he means, in opposing any health-care overhaul that includes a "public option," or government-run health-insurance plan, as the current bill does. His opposition is strong enough that Mr. Lieberman says he won't vote to let a bill come to a final vote if a public option is included.
Probe for a catch or caveat in that opposition, and none is visible. Can he support a public option if states could opt out of the plan, as the current bill provides? "The answer is no," he says in an interview from his Senate office. "I feel very strongly about this." How about a trigger, a mechanism for including a public option along with a provision saying it won't be used unless private insurance plans aren't spreading coverage far and fast enough? No again.
So any version of a public option will compel Mr. Lieberman to vote against bringing a bill to a final vote? "Correct," he says.
This is, of course, more than just one senator objecting to one part of health legislation. This is the former Democratic vice presidential nominee, now an independent, Joe Lieberman, still counted on to be the 60th vote Democrats will need to force a final vote on health legislation. In opposing a public option, he is opposing the element that some Democratic liberals have come to consider the cornerstone of health legislation.
Maybe the Lieberman stance is posturing, or a maneuver to force a watering down of the public option into something he and like-minded Democratic conservatives can swallow. In any case, as Senate Majority Leader Harry Reid tries to solve the Rubik's Cube that is health legislation, Mr. Lieberman just might represent the hardest piece to flip into place.
In spite of that, Mr. Lieberman insists he wants a bill. He voted with Democrats over the weekend on a procedural motion to let debate begin on a version that definitely includes a public option, albeit one states could choose not to join. "I want to get to the health-care debate, and I want to be part of creating, working on and passing health-care reform," he says. "I've been working on it for years, so that's my goal. But I'm not going to vote for anything and everything called health-care reform."
He says he wants the government to help uninsured Americans get coverage, as the bill envisions, and likes the provisions designed to bring down overall health costs. And he favors the consumer protections it would impose on private insurers, including one that bans insurance companies from denying coverage to those with pre-existing health conditions.
But none of that trumps his opposition to a public option, Mr. Lieberman says. And he insists his objection isn't based on the oft-expressed conservative fear that a public option would lead to a government takeover of health care. He says he doubts this or any subsequent Congress would allow that.
Rather, his objection is based on fiscal risk: "Once the government creates an insurance company or plan, the government or the taxpayers are liable for any deficit that government plan runs, really without limit," he says. "To me, with our debt heading over $21 trillion within the next 10 years…we've got to start saying no to some things like this."
Mr. Lieberman also notes that the public option simply wasn't a big feature of past health-overhaul plans or the campaign debate of 2008. So he says he finds it odd that it now has become a central demand -- which it has, he suspects, because some Democrats wanted a full-bore, single-payer, government-run health plan, and were offered a public option as a consolation.
Critics, of course, think Mr. Lieberman is merely protecting insurance companies from his home state of Connecticut. He, of course, insists otherwise, arguing that regulation and litigation are the traditional and more appropriate ways to keep the private market honest. The real risk he sees, he insists, is government debt.
Yet he still thinks that, somehow, health legislation will get done, probably not by Christmas but early next year. "At the end of the day," he says, "I feel strongly health-care reform will pass the Senate and the Congress."
How? Mr. Lieberman says he has made his position absolutely clear to Mr. Reid. And Mr. Reid, all agree, is a wily tactician. So does he think Mr. Lieberman, and the two or three conservative Democrats who share his inclination, will give in at the end? Or is there some artful compromise that can be seen as including and not including a public option at the same time?
Here's another possibility: Maybe Mr. Reid plans to push as far as he can with a bill that includes a public option, to show his party he has done all humanly possible, before yanking out the public option at the last moment, just before the whole effort goes off a cliff. We've proven that a bill is possible, he might say then, but also that a public option isn't.

Support for Health Care Plan Falls to New Low

Just 38% of voters now favor the health care plan proposed by President Obama and congressional Democrats. That’s the lowest level of support measured for the plan in nearly two dozen tracking polls conducted since June.
The latest Rasmussen Reports national telephone survey finds that 56% now oppose the plan.
Half the survey was conducted before the Senate voted late Saturday to begin debate on its version of the legislation. Support for the plan was slightly lower in the half of the survey conducted after the Senate vote.
Prior to this, support for the plan had never fallen below 41%. Last week, support for the plan was at 47%. Two weeks ago, the effort was supported by 45% of voters.
Intensity remains stronger among those who oppose the push to change the nation’s health care system: 21% Strongly Favor the plan while 43% are Strongly Opposed.
Rasmussen Reports is continuing to track public opinion on the health care plan on a weekly basis. Next week’s Monday morning update will give an indication of whether these numbers reflect a trend of growing opposition or are merely statistical noise.
(Want a free daily e-mail update? If it's in the news, it's in our polls). Rasmussen Reports updates are also available on Twitter or Facebook.
Only 16% now believe passage of the plan will lead to lower health care costs. Nearly four times as many (60%) believe the plan will increase health care costs. Most (54%) also believe passage of the plan will hurt the quality of care.
As has been the case for months, Democrats favor the plan while Republicans and voters not affiliated with either major party are opposed. The latest numbers show support from 73% of those in the president’s party. The plan is opposed by 83% of Republicans and 70% of unaffiliated voters.
Other recent polling shows that Democrats consider health care reform to be the top priority for the president. Republicans and unaffiliated voters see deficit reduction as most important.
Among the nation’s senior citizens, 34% favor the health care plan and 60% are opposed. A majority of those under 30 favor the plan, but a majority of all other age groups are opposed (Premium Members can see full demographic crosstabs).
Support for health care has declined along with President Obama's approval ratings. For the first time in the Obama era, the Rasmussen Reports daily Presidential Approval Index has been in negative double digits for nine straight days.
Despite the decline in support for the health care plan, 50% still say it is at least somewhat likely to become law this year. That figure includes 17% who say passage is Very Likely.
While Senate Democrats this weekend assembled enough votes to begin debate on the plan, many challenges remain. All Republican Senators and several Democrats, for example, have expressed opposition to the so-called “public option.” Sixty-three percent (63%) of voters nationwide say guaranteeing that no one is forced to change their health insurance coverage is a higher priority than giving consumers the choice of a "public option" government-run health insurance company. Most liberal voters say giving people the choice of a "public option" is more important. But most moderates take the opposite view and say guaranteeing that no one is forced to change their health insurance is the top priority.
Overall, 46% favor the creation of a government-sponsored non-profit health insurance option that people could choose instead of a private health insurance plan. However, if the plan encouraged companies to drop private health insurance coverage for their workers, support for the public option falls to 29%, and opposition rises to 58%.
As Scott Rasmussen, president of Rasmussen Reports, wrote in the Wall Street Journal: “The most important fundamental is that 68% of American voters have health insurance coverage they rate good or excellent. … Most of these voters approach the health care reform debate fearing that they have more to lose than to gain.”
Other challenging issues in the Senate debate include abortion and illegal immigration. Ever since the House's passage of the Stupak Amendment which says the "public option" would not cover elective abortions and that recipients of federal insurance subsidies could not use them to buy abortion coverage, the divide among Democrats has been visible.
Earlier polling showed that 48% nationwide favored the abortion ban, but most supporters of health care reform didn’t want to address the issue. Just 13% of all voters wanted abortion coverage mandated in the legislation.
On immigration, 83% say that proof of citizenship should be required before anyone can get health care assistance from a government program. Most Democrats while claiming the plan will not cover illegal immigrants are opposed to including a proof-of-citizenship stipulation.
Other polling shows that 47% trust the private sector more than government to keep health care costs down and the quality of care up. Two-thirds (66%) say an increase in free market competition will do more than government regulation to reduce health care costs.
While voters are skeptical of the plan working its way through Congress, 54% say major changes are needed in the health care system. Sixty-one percent (61%) say it’s important for Congress to pass some reform.
Only 31% believe Congress has a good understanding of the proposed health care reform.
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How health care reform could fall apart

Senate Majority Leader Harry Reid eked out 60 votes on a procedural motion to start the health care debate Saturday night – but there’s no guarantee he can pass a bill on the merits.

And as he struggles, the reasons are clear: deep divides among Democrats on a public insurance plan, abortion, tax hikes and cost-cutting. Liberals want the plan to be generous enough. Moderates fear a budget-buster. And everyone is trying to avoid angering seniors.

Even in the blush of Saturday’s victory, Reid (D-Nev.) is far from having the votes to move his $848 billion package to final passage. At least four centrists have pledged to oppose it in its current form, largely over the public option. Reid is in a bind. Stay to the left, and moderates vote no. Move a tad to the right, and Reid faces insurrection from the left, as liberals in his own caucus and in the House vow not to compromise any further on their signature issue.

As one of the Senate most liberal members, Bernie Sanders (I-Vt.), told POLITICO’s The Arena: “I have made it clear to the administration and Democratic leadership that my vote for the final bill is by no means guaranteed.”

Health care reform proponents considered Saturday’s vote a major milestone, one that significantly boosted the odds of passing a bill. But, as Senate Minority Leader Mitch McConnell (R-Ky.) vowed Saturday, “the battle has just begun.”
Here are the battle lines where President Barack Obama’s vision of reform could falter.
No good option for public option

A Democratic dream – expanding the government’s role in guaranteeing health care to the uninsured – might well be reform’s undoing.

Public option proponents, including Sanders and Sen. Sherrod Brown (D-Ohio), say they have already given up enough. They agreed to forgo a single-payer system. They decided not to push a government plan tied to Medicare rates. And they accepted Reid’s proposal to include the opt-out provision. That’s it, they say.

The more conservative members of the caucus won’t budge either. They agreed Saturday to allow the debate to begin, but effectively killed the opt-out idea – Reid’s attempt at compromise.

Right now, there is no public option plan that could garner 60 votes. A public plan “trigger” if private insurers fall short could come close – saying, losing Sanders but picking up Olympia Snowe (R-Maine) – but there’s no guarantee it would fly in the House.

Enter “The Hammer,” an idea from Sen. Tom Carper (D-Del.) States that lack affordable choices would be required to offer a national insurance program that wouldn’t be government-financed or government-run.

Carper had already attempted a compromise with Sen. Chuck Schumer (D-N.Y.) – and came up empty-handed. Brown and others sound prepared to walk away if Democrats can’t work this out.

“Four members of the Senate aren’t going to tell the other 55 what to do on these issues,” Brown said of the public option.

No room for abortion compromise

It’s one of the most emotionally charged issues in the debate, with anti-abortion activists insisting that health reform cannot expand federal funding for abortions.

But when it comes down to whether Democrats can accomplish health reform this year, it becomes a vote-counting problem – how many anti-abortion Democrats would walk away from a bill they don’t like?

Reid can’t afford a single defection – and already, Sen. Ben Nelson (D-Neb.), who opposes abortion rights, says weak language could be enough to oppose final passage.

House Speaker Nancy Pelosi (D-Calif.) could lose at least 10 Democrats if the Senate tried to water down the tough anti-abortion language in her bill.

At the same time, about 40 Democrats in the House say they can’t vote for a bill that goes as far as the House bill does now, with the so-called Stupak amendment that prevents a public insurance plan from offering elective abortions.

The big player here isn’t Reid or Pelosi but the Catholic Church, which helped get the Stupak amendment into the House bill. Any abortion language may have to win the backing of the church for members to sign on – and the church is sticking by a tough anti-abortion stance that angers many liberals.

Is there a middle ground? That’s not at all clear.

Millionaires vs. Cadillacs

Republicans pounded one big talking point all day Saturday: health reform raises taxes. And it’s true, the plans would.

What’s worse for Democrats is that the House and Senate have starkly different visions of how to pay for reform. The House hates the Senate tax, and the Senate hates the House tax.
Not surprisingly, politics are at play. The House went with a populist soak-the-rich tax on “millionaires” to pay for almost half the near-trillion dollar price-tag in its bill. And bowing to pressure from powerful union backers, Democrats steered clear of any tax on the so-called “Cadillac” plans – high-cost policies that many unions have negotiated for their workers over the years.

Reid relies heavily on taxing the Cadillac plans – but won’t touch a millionaires tax, which was never debated in the Senate.

Is there any give?
Reid signaled he might be inclined to get a little closer to the House by saying he’d bump up the Medicare tax on high-earners. The “botax” on cosmetic surgery also seems aimed at the wealthy but only raises $5 billion. So, this will be one of the hottest debates when the House and Senate try to merge their bills.

Scaring seniors: Medicare cuts, higher premiums?

Republicans also tried to stir this sleeping giant Saturday, pounding Democrats for big cuts in Medicare under the Senate plan – at least $300 billion worth.

“So, here we are telling the American people that we’re going to fix health care in America and the way we’re going to pay for the massive government takeover of health care is through cuts in Medicare?” said Sen. John McCain (R-Ariz.)

The reductions will almost certainly cut some benefits for seniors, a fact that has become a central opposition argument echoed from Capitol Hill to K Street. The cuts are likely to bump more than half the seniors currently enrolled in the popular Medicare Advantage program.

Democrats are keenly aware of the danger in a senior revolt and note that AARP, the nation’s largest seniors’s lobby, would not have endorsed reforms if they hurt seniors.

But there’s another danger to Democrats lurking in the bill – dissent toward the White House deal with the drug-makers. Many Democrats feel PhRMA got off easy by only having to kick in $80 billion in cuts toward health reform. So some liberal Democrats want to change the deal’s terms and force the industry to sell drugs to the federal government at a discount.

PhRMA insists that would bump up the seniors’s Medicare prescription drug premiums by 20 percent. If the Senate includes the rebates, industry officials privately say that they’ll consider running ads slamming senators for voting to increase seniors’s drug costs.

“PhRMA would have to let people know the truth,” said a senior pharmaceutical lobbyist. “I don’t know why they would want to increase premiums.”

Health fix fuels deficit worries

When Obama campaigned on enacting reform, he pledged to cut premiums, reduce the spiraling growth in medical costs and not add a dollar to the federal deficit.

It’s not completely clear that he’ll be able to accomplish any of those goals, and the public is catching on.

That’s bad news indeed for Obama’s efforts, especially at a time when voters already are giving him low marks for the sputtering economy and the 10 percent unemployment rate.

A Quinnipiac poll found that only 19 percent of voters believed Obama’s pledge that health reform wouldn’t boost the deficit in the next 10 years.

Doug Elmendorf, director of the Congressional Budget Office, found that neither the House bill nor the Senate bill would add to the federal deficit. But federal spending for health care would go up under both bills in the next decade -- as much as $598 billion under the House bill over 10 years, roughly $85 billion in the Senate Finance Committee bill, the CBO said.

No one has been able to guarantee premiums won’t rise. And there are serious questions about whether the bills go far enough to rein in costs.

That may explain why Democrats are now talking more about how the bills will expand coverage than about whether they will lower premiums for most families. And that's a big problem for the president and his congressional allies, given how uneasy independent voters and moderate Democrats feel about health care at this point.

In the absence of CBO data on premiums, expect Republicans to keep exploiting this weakness.

Chris Frates contributed to this story.

Splits widen for Democrats over health reform

By Sarah O’Connor in Washington
Published: November 22 2009 18:44 | Last updated: November 22 2009 18:44
President Barack Obama’s mission to reform US healthcare vaulted another legislative hurdle over the weekend, but the scramble to secure his own party’s votes sheds light on the messy compromises that may be needed to get it to the finish line.
Fissures between liberal and centrist Democrats cracked open on Sunday in the aftermath of a procedural vote, which paved the way for the estimated $848bn (€570bn, £514bn) draft Senate bill to be debated on the floor. Leaders hope there will be a vote on the bill by Christmas. If passed, the House and Senate versions will have to be mashed together.
If this weekend is anything to go by, it will not be a pretty process. All Democrats and Democrat-leaning independents voted to push the bill forward – creating a filibuster-proof majority of 60 – but some of those votes came far from quietly. A group of centrist Democrats, unhappy about elements of the bill such as a public insurance option, managed to wring concessions from the leadership in return for their acquiescence.
In what wags have already dubbed the “Louisiana Purchase”, Mary Landrieu was offered at least $100m in extra federal money for her state. Ben Nelson won the omission of a provision that would strip health insurers of their anti-trust exemption. Blanche Lincoln won more time.
The group’s disproportionate power in the debate has antagonised some liberal Democrats. “In the end, I don’t want four Democratic senators dictating to the other 56 of us and to the country, when the public option has this much support, that it’s not going to be in it,” said Sherrod Brown of Ohio on Sunday on CNN.
“But in the end, I think that all four of our colleagues surveyed this . . . and I don’t think they want to be on the wrong side of history. I don’t think they want to go back and say, ‘You know, on a procedural vote, I killed the most important bill in my political career’.”
As the debate gets going, the centrists will face increased pressure at home, where they are vulnerable to losing their seats if they are seen to let their colleagues in Washington push them too far to the left. Lobbyists on both sides of the debate are well aware of this, and are blitzing their home states with adverts.
Ms Lincoln claimed that groups had spent $3.3m on advertising in her state of Arkansas. She said she would refuse to yield to either side, but was shocked by the “unbelievable type of threats” she had received.
“These ad groups seem to think this is all about my re-election. I simply think they don’t know me very well,” she said on the Senate floor.
The group, which also includes independent senator Joe Lieberman, all said they wanted more changes made to the bill in the coming weeks.
“When I saw the bill I said, ‘This can be amended, this can be improved’,” Mr Nelson said on Sunday on ABC. He said language on federal funding for abortion, which is softer than that of the House bill, was one problem. He did signal he was willing to compromise on a public option, but said it would have to be much weaker than the current version, which has already been watered down to allow states to opt out.
“We could negotiate a public option of some sort that I might look at, but I don’t want a big government, Washington-run operation that would undermine the . . . private insurance that 200m Americans now have,” he said.
Mr Lieberman, though, was more intransigent.
“[A public option] is a radical departure from the way we’ve responded to the market in America in the past,” he told NBC. “We rely first on competition in our market economy. When the competition fails then what do we do? We regulate or we litigate.”
The weekend’s vote was a victory for Harry Reid, Senate leader, but he acknowledged that it was simply an opening skirmish in a battle that is now set to break into full force. Much of that battle will take place within his own party.
“Tonight’s vote is not the end of the debate,” he said on Saturday night. “It is only the beginning.”

Saturday, November 21, 2009

Peter Schiff: Health Care = Socialized Medicine

The Health-Care Buffet

The obesity bubble is in no danger of bursting.

While lawmakers like to vilify insurance and pharmaceutical companies for driving up health-care costs to make fat profits, obesity is actually a far bigger reason for ballooning costs. Call it the obesity bubble, and a study out this week shows that it's in no danger of bursting.
Obesity is defined as having a body-mass-index (BMI) of 30 or greater. For example, a person who is 5'8 and weighs 200 pounds has a BMI of 30 and would be considered obese. According to the study's author and the executive director of the Partnership to Fight Chronic Disease, Kenneth Thorpe, 43% of American adults will be considered obese by 2018 if current trends continue. That's up from 34% today. Mr. Thorpe notes that obesity is the fastest growing health condition in this country and a huge impediment to bending the health-care cost curve.
According to the Centers for Disease Control, obesity was responsible for $147 billion of medical costs in 2008. Mr. Thorpe calculates that obesity accounted for 27% of the rise in health-care costs between 1987 and 2001. But here's the real whopper: If current obesity trends continue, obesity-related health-care costs will total $343 billion in 2018. Who knew that fat could weigh so heavily on our health-care system?
Mr. Thorpe figures that obesity's health-care toll today is $361 per person per year (and that's not counting the economic costs of missed work, workers' compensation, etc). He puts that number at $1425 in 2018 if trends continue. That's a pretty hefty price for Americans to pay regardless of whether they're consuming their share of the health-care pie. On the other hand, just holding obesity constant for the next ten years could save each American $821 and the nation a collective $198 billion per year by 2018.
Unfortunately, the pending health-care legislation in Congress isn't going to help reduce obesity-related costs, despite the supposed increased emphasis on "prevention." Sure, there's a provision mandating that chain restaurants include calorie counts on their menus, but two scientific studies have come out this year demonstrating that New York City's calorie labelling law hasn't had a significant impact on people's caloric intake. People see the information and then usually choose to ignore it.
What's more, the House legislation specifically bars incentives for Americans to lose weight. The National Association to Advance Fat Acceptance (NAAFA) lobbied against provisions that would help businesses use financial incentives to promote weight loss. The NAAFA also opposed allowing insurers to use a person's weight or BMI to differentiate rates or deny coverage. With two thirds of the population overweight or obese---and that share is predicted to increase to at least three in four in the next 10 years---a slim portion of the population is going to be bearing disproportionately the health-care costs of the large majority. That's a fat tax on thin people.
But most Americans regardless of their size are already paying this tax through Medicare and Medicaid payroll deductions. Today, government entitlement programs pay for about half of all obesity-related health-care costs, largely because poor and elderly people are more likely to be obese and suffer obesity-related health complications. The CDC estimates that obesity is responsible for 36% of Medicare and 47% of Medicaid spending. Americans can expect to pay an even bigger toll when Medicaid is expanded to 150% of the federal poverty level.
Because of the nature of our third-party payer health-care system, the costs of obesity aren't just borne by the over-eaters. This can result in the demonization and scapegoating of overweight people ("I wouldn't be paying so much for health care if you didn't keep eating Cheetos!). No one likes to feel that they're picking up the tab for other people's unhealthy behaviors, but most people don't like to feel that they're unfairly costing other people money either.
The public option, expansion of Medicaid, and government health-care subsidies will just exacerbate these resentments by making the costs of obesity more dispersed among the public. As Marilyn Wann, author of "Fat! So?" and a strong advocate of the public option, notes "We're all in this life raft together."
Obesity has become a collective action problem with people failing to take positive action because they don't reap the benefits. If Americans were told that they could save $821 a year by maintaining their current weight for the next 10 years, most people probably would. If told that they could double those savings by dropping 20 pounds, most probably would. So why don't they? Because they don't have any skin in the game. If they lose weight, they don't reap the financial benefits through lower insurance premiums, though they may reap the health benefits. Unfortunately, for many people, that's just not enough.
The solution to this collective action problem isn't to impose a tax on soda and sugary beverages to offset the externality. Rather, the solution is to make the problem less collective. It's easier to make Mark pay more for his health insurance than to make Mark, Mary and Paul pay a tax on sodas to cover Mark's higher health-care costs. Once Mark sees that his fast food predilection is costing him twice as much, he may think twice as hard about ordering that twice-as-big cheeseburger.
People are remarkably receptive to financial incentives. A 2006 survey of CEOs by the Conference Board, an organization that collects and analyzes business information, reported that wellness programs yield up to $5 of health-care savings per dollar invested. CEOs noted that awarding employees who drop weight with cash, extra vacation days, and insurance rebates has helped them reduce their health-care costs. And no doubt such incentives could work on a national scale with insurers offering reduced premiums or rebates to individuals who maintain a healthy weight. But the House health-care legislation prohibits such incentives because it is "discriminatory."
That's right. It is price discrimination. Health care shouldn't be a buffet where everyone pays the same amount no matter how much they consume, though that seems to be what Congress wants. But we all know the problem with buffets. It's too easy to consume too much.
Ms. Finley is Assistant Editor of


The End of HSAs

Harry Reid wants to kill consumer-driven health care. 

About the best that can be said about the Senate health-care bill that Harry Reid revealed this week is that it's marginally less destructive than the House monster. By a hair. Its $1.2 trillion cost (more like $2.5 trillion if you discount the accounting gimmicks), multiple and damaging new taxes, and new regulations will make health insurance more expensive for most Americans while reducing the quality of medical care.
We'll dissect the damage in the days to come. But for today let's focus on the damage the bill would do to consumer-driven health plans—the kind that give individuals more control over their health dollars and insurance choices. The 2,074-page bill crushes them with malice-aforethought.
Getty Images
Senate Majority Leader Harry Reid

Start with its attack on flexible spending accounts that are an important part of many employer plans. Flex accounts let employees set aside some portion of their pre-tax pay for out-of-pocket costs or medical services that their insurance plan doesn't cover, such as a child's orthodontics or testing supplies for diabetics. The Reid bill caps these now-unlimited accounts at $2,500 per year and imposes new restrictions on qualifying medical expenses, raising some $5 billion by exposing income above the non-indexed cap to taxes.
Democrats say flex accounts encourage wasteful spending, because an arbitrary "use it or lose it" rule doesn't allow balances to roll over year to year. But they really hate them because they give consumers a more active role in managing spending, instead of having the government decide.
The Reid bill also assaults health savings accounts, or HSAs, which allow individuals to accumulate tax-free funds for future medical expenses when coupled with low-premium, high-deductible insurance. The Reid bill changes tax provisions to make HSAs less attractive, but the real threat comes via increased regulation.
These insurance products will likely be barred from the insurance "exchanges" that will demolish and supplant today's individual market. Employers will also find them more difficult if not illegal to offer once the government has new powers to "define the essential health benefits" that all plans must eventually offer. Plans that focus mainly on catastrophic health expenses, instead of routine procedures, aren't generous enough for Democrats.
Liberals claim people who choose these options aren't helping as much to finance a common pool and may encourage adverse selection if too many young or healthy people opt out. While all insurance involves some degree of risk-sharing, Democrats want to impose true social insurance a la Europe by obliterating the flexibility of insurers to design products that are tailored to suit different individual needs.
In fact, about 40% of tax filers with HSAs earn under $60,000, according to the IRS. The Employee Benefit Research Institute reports that 4% of adults with private insurance have an HSA this year—up from 1% in 2006—and about 9% are enrolled in some form of consumer-directed health plan. It also found that beneficiaries are evenly split between those with health problems and those without.
The Blue Cross Blue Shield Association, whose members dominate the HSA market, says that enrollees are more likely than those with traditional insurance to be better consumers. They're more likely to track expenses (63% to 43%), save for the future (47% to 18%), and search for information on physician quality (20% to 14%). They're also more likely to participate and see results from wellness programs like weight loss, fitness and smoking cessation. This makes intuitive sense: They've got skin directly in the game.
David Goldhill, a media executive, recently wrote in the Atlantic Monthly that if a 22-year-old starts at his company today earning $30,000 and health costs grow at 3%, by the time he retires he'll have paid out $1.77 million in premiums, lower wages, out-of-pocket costs and both sides of the Medicare payroll tax.
If all that money were instead available via an HSA, including by borrowing against future contributions, "wouldn't you be able to afford your own care?" Mr. Goldhill asks. "And wouldn't you consume health care differently if you and your family didn't have to spend that money only on care?"
This is precisely the future liberals fear because it would make health care less susceptible to political control. The Reid bill makes it impossible for people to choose better reform alternatives, the ones that can only be discovered through innovation and competition in a dynamic marketplace.
Not that any of this seems to matter at this stage of the health-card debate. The polls show the public opposes the Democratic bills, President Obama is below 50% job approval in the Gallup poll, and business and medical providers are increasingly horrified at what reform will do to consumers and patients. But so what? This is about putting government in charge of health care, whether Americans like it or not.


Friday, November 20, 2009

Saturday Night Fever

GOP senators preview the weekend’s cloture debate for NRO.

By Robert Costa

In the 2008 presidential race, John McCain often dueled with Barack Obama over health care. Over a year later, Obama is in the White House and McCain finds himself back on Capitol Hill. The battle, however, continues.

With the president and Senate Majority Leader Harry Reid (D., Nev.) making a final push to pass Obamacare in the upper chamber, McCain tells NRO that it is crucial for Senate Republicans to make every effort to defeat Reid’s 2,074-page blueprint, which is expected to come to a cloture vote on Saturday night. That vote will determine whether the bill can move to the Senate floor for a final debate. Reid, who leads a caucus of 58 Democrats and two independents, needs to secure 60 votes in order to proceed.

Democrats, says McCain, “are trying to fundamentally change health care in America.” Reid’s bill, he adds, is “like a big fish in the sun: After a short period of time out there, it really begins to stink.” McCain’s concerns are numerous: the bill’s spending, its new taxes, its Medicare cuts, its abortion language, its public option, its employer mandates, and its lack of medical-malpractice reform. The last item really irks the Arizona senator. “The total absence of meaningful malpractice reform just shows you the incredible influence of the trial lawyers of America,” says McCain. “It’s just blatant.”

The Congressional Budget Office’s recent score of Reid’s bill puts the cost at $848 billion over ten years. McCain says that number is misleading. Unlike the House and Senate Finance Committee health-care bills, whose reforms were set to start in 2013, Reid’s bill pushes back the implementation date to 2014. McCain calls the move “outrageous.”

“People will start paying taxes right away, but now the benefits won’t kick in until years later,” says McCain. “It’s like buying a house and starting mortgage payments only to be told that you have to wait five years to move into your home. And when you look at the actual cost of implementation, once the taxes come into effect, the ten-year cost is $2.5 trillion.”

Beyond the CBO numbers, “this bill is an atrocity, it’s awful,” says Sen. John Barrasso (R., Wyo.), an orthopedic surgeon. “The overall costs are hidden. A huge part of Medicare that seniors depend on is going to be cut, and the bill includes major new taxes.”

Also worrisome, says Barrasso, is that rationing is on the horizon: “The U.S. Preventive Services Task Force, a government panel, just came out with an astonishing report on mammograms that [encourages the government to step] between people and their doctors. It’s amazing that the government and the Democrats would show their hand this soon. This report is clearly the first step toward rationing and a glimpse into the future of health care in America.”

Knowing that the public is growing increasingly uneasy about Obamacare, the Senate GOP is more than ready to raise objections at every turn, says McCain.

“Our amendments will be our alternative,” he adds. “We’ll propose a group of reforms to bring down costs, from malpractice reform and enabling people to purchase insurance across state lines to rewards for wellness and fitness and cost-savings for small businesses. Cost is the fundamental schism here. Republicans know that the focus needs to be on bringing down costs. The Democrats, meanwhile, are intent on changing the whole system.”

But before the Senate GOP has a chance to offer those amendments on the floor, they’ll have to try to topple Reid’s bill this weekend. Abortion is already at the center of the debate, a major hurdle for Reid as he attempts to cobble together 60 votes.

Pro-life Democrats are giving Reid heat for his decision to leave out the abortion language from the health-care bill that recently passed in the House. There, pro-life congressman Bart Stupak (D., Mich.) was able to force Speaker Nancy Pelosi (D., Calif.) to adopt a strict limit on abortion funding when he secured 240 votes for a related amendment. Now, in similar fashion, pro-life senator Ben Nelson (D., Neb.) has threatened to filibuster a final vote on Reid’s bill if the language on restricting federal funds for abortion is not strengthened.

“Saturday’s vote is not just some meaningless procedural vote,” says Sen. Lamar Alexander (R., Tenn.), chair of the Senate Republican Conference. “In this case, procedure equals policy, as it often does in the Senate. If you care about right to life, if you’re a pro-life senator, then you know that this is probably the only chance we have to get that provision changed.”

“I’ve always thought that Senator Reid could get his 60 votes on the motion to proceed,” adds McCain. “He’s good at that kind of thing. But there will be a backlash in this country when they find out that federal dollars may be given to cover abortion. That is a radical departure from the Hyde Amendment. When the abortion language in this bill is correctly analyzed by experts, Americans will notice. The majority of Americans, be they pro-life or pro-choice, do not want federal dollars directly or indirectly funding abortion.”

Sen. Mike Johanns (R., Neb.) agrees. “Saturday’s vote is an abortion vote,” he says. “We often use arcane procedures in the Senate that just lose people. Things can get complicated on the process side here, so let me be clear: This cloture vote is a make-or-break vote on the pro-life issue. Reid’s bill has language that includes a mechanism for public funding and a significant extension of abortion coverage. If this bill moves to the floor with 60 votes this weekend, the only way to change it is to get 60 votes again. That will be very tough to achieve once the bill goes to the floor. A vote to proceed is thus a vote for extending abortion coverage.”

Republicans and pro-life Democrats need to unite on Saturday night, says Johanns. “Stupak didn’t give in to Speaker Pelosi. Every Democrat who has run as a pro-life senator, anyone who has gotten an endorsement from the National Right to Life, needs to stand up on this. This is the pro-life vote of their Senate career.”

Thanks to these and other concerns, three Democratic senators remain publicly undecided on whether to move Reid’s bill toward a floor debate — Arkansas’s Blanche Lincoln, Louisiana’s Mary Landrieu, and Nelson. Lincoln is facing growing unpopularity back home and a tough reelection battle in 2010. So far, she and Nelson have issued noncommittal statements. Landrieu has said she may deep-six the Democrats’ plan. Knowing this, Reid gathered the wary trio in his office on Thursday for a private briefing on the bill’s “particulars.”

“I’m sure they were talking about more than the weather,” says McCain, who’s concerned that Reid may be sweetening the bill at the last minute for the three fence-sitters. “There should not be a surprise boost in Medicaid funding for states that have been declared disaster areas in the last seven years,” says McCain. “If you look at what’s in that provision on page 432, you see the benefits those states will receive, especially Louisiana, which suffered from Hurricane Katrina in 2005.”

ABC News reports that the Congressional Budget Office expects this added component of Reid’s bill to cost $100 million. “We need to engage in an extensive debate over these things,” says McCain. Reid, he adds, with such fine-print favors, could be seen as trying to “buy” Landrieu’s vote. “In a 2,074-page bill, there’s a lot of room for mischief.”

Reid isn’t the only Democratic leader trying to help Obamacare along tomorrow, of course. The White House is also doing everything it can to make sure Reid gets 60 votes. For example, a handful of top Obama strategists — including Deputy Chief of Staff Jim Messina and pollster Mark Mellman — addressed Democratic senators on Thursday afternoon. Vice President Biden, they said, is ready and willing to travel to help any worried Democrat sell voters on Obamacare in red-tinged states. Obama himself has also gone out of his way, even during his recent trip to Asia, to praise Reid’s bill.

GOP Senate staffers tell NRO that they expect Reid to get his 60 votes. Nonetheless, Alexander says that he’s not giving up on trying to change some minds. The GOP is “doing everything we can” to reach out to moderate Democrats,” says Alexander. “We respect their autonomy, but we know they pay attention to what happens in their states. For example, Senator Johanns held two press conferences recently about Saturday being a right-to-life vote. Those events were surely noticed in Nebraska and especially by Senator Nelson.”

Alexander adds that in the final run-up to the Saturday-night vote, the GOP will continue to remind Democrats that they “won’t be able to explain away a ‘yea’ vote on Saturday night as ‘just trying to move the bill to the floor.’ They’re going to have to realize that if they vote for cloture on Saturday, then they’re going to have to go home and explain to voters why they think voting to raise premiums, raise taxes, encourage taxpayer-funded abortions, and cut Medicare equals ‘health-care reform.’”

The debate on Reid’s bill is set to begin at 10 a.m. on Saturday, with the cloture vote to come around 8 p.m. If it passes, then the Senate will likely take a week off for Thanksgiving and come back to begin the floor debate on Monday, November 30. If it doesn’t pass, it will simply be a disaster for Democrats. President Obama would have little to no chance of signing any piece of legislation until early 2010 and the Senate would become mired in even more debate over cloture that could stretch on for weeks.

Regardless of Saturday’s outcome, it will be important for Republicans to “keep going out to the American people,” says McCain. “I intend to try and get out of Washington during the final weeks of debate to have town-hall meetings. We need to keep the American people stoked up and informed and do everything we can to galvanize support. The American people overwhelmingly do not want this legislation. They’re already fired up and frustrated in a way I have never seen before. We have to help make sure that their voices are heard and engage in an extensive debate.”

Alexander says he already has a plan. “We’re going to organize Republican senators today and Saturday into teams to go to the floor and read the text of the bill to help the American people understand how it affects their individual health care,” he says. “If the American people have a chance to read the text of the bill and understand its costs, then it has no chance of passing. That’s a very big challenge for the next few weeks, but we’ll take Friday and Saturday to explain the bill to the American people, through the Internet and town halls. We’ll be very active now and all through December.”

Then again, some staffers say that if Reid clearly has 60 votes, then the GOP may back off its promise to read the bill in order to let their colleagues go home for the recess, keeping their procedural weapons in their holsters, if only for a week.

Whether the Republicans will have much to give thanks for over the break is unclear. Though Reid may appear to be a couple of votes short on cloture, his ability to toss around big-dollar carrots to cautious Democrats like Landrieu should help to pave the way for a floor debate.

Saturday night’s debate may be nothing more than a preview of politics to come. Don’t discount it, though, says Barrasso, the doctor.

“The Reid bill is the wrong prescription,” he adds. “On Saturday, we’ll give Americans a second opinion.”