Let's cut to the heart of the matter: First, let's start by setting aside the extraordinary complexity of thousands of pages of health reform legislation. Next, let's throw out the labyrinth of details about the Senate reconciliation process. Not important.
Only one thing matters. President Obama must convince the House to pass the Senate bill. Everything else, including any separate legislation passed through the budget reconciliation process, is a side show at best.
If the House passes the Senate bill in a straight up or down vote — "a simple majority," to quote the president — ObamaCare becomes the law of the land. Nothing else matters.
The president wants the House to act by March 18, promising that problems would be fixed in subsequent legislation.
But if the House passes the Senate bill, then President Obama would be able to sign comprehensive health reform in the form of the Senate bill the next day, and the job is done. Any promises that it would be fixed after that aren't worth the paper they might, or might not, be written on.
The White House is desperately trying to find every vote possible to get to the current majority number of 216 votes in the House to pass ObamaCare. The president cleared his schedule this afternoon for marathon meetings with House members.
Rep. Bart Stupak, Democrat of Michigan, said on ABC this morning that he and 11 colleagues who voted for the earlier version of the House bill will vote "no" this time if abortion language isn't changed from the Senate version.
"Let's face it, I want to see health care," Stupak said. "But we're not going to bypass some principles and beliefs that we feel strongly about."
But they and others are being told that if they want health reform, they have to take the first vote so the leadership has a bill to fix.
The package of fixes being negotiated between the House and the Senate is a distraction at best.
Once House members take the vote on the Senate bill, they have absolutely no control over what the Senate does next. The Senate may or may not be able to get a second bill passed to address concerns of the House.
And that means House Democrats will be on the hook this fall for a vote for:
- The Cornhusker Kickback, the Louisiana Purchase, and every other vote-buying deal buried in the Senate bill.
- Abortion language that clearly allows federal funding for abortion and which the U.S. Conference of Bishops solidly opposes.
- The Cadillac tax on high-cost health insurance policies that labor unions hate.
- Weak enforcement provisions for the individual mandate that health insurers say will cause pools to disintegrate, causing premiums to skyrocket for those still buying policies.
And that's just for starters.
It would be the dupe of all time if House members were to be convinced that they must go first to keep the process moving forward, only to find that ObamaCare passes the finish line in the form of the Senate bill.
It will be interesting to watch them this fall trying to explain to constituents, who already have told them in no uncertain terms that they hate this legislation, that they were promised that they would have a second chance to take a vote to fix it.
In this game, there will be no second chances.
Pickett's Charge: President Obama's speech on Wednesday was anything but the game-changer congressional leaders desperately needed. He offered not a single new idea, and he trashed bipartisanship by suggesting his health overhaul be passed through the ultra-partisan reconciliation process.
The Washington Examiner aptly called this all-or-nothing gambit "Pickett's Charge."
Worse, the president argued for his plan by dusting off the same arguments he's been using for a year but which have since been discredited by numerous independent studies — that you can keep your current coverage, health costs will be lower, and the deficit is reduced.
Let's look at these three examples:
President Obama: "If you like your plan, you can keep your plan."
The steep cuts in Medicare Advantage he supports would mean at least one-third of seniors could lose their comprehensive Medicare Advantage coverage as their plans are forced to withdraw from the program, cut their benefits, or raise premiums. In addition, at least 10 million people with employer-sponsored insurance could lose their current coverage, according to the Congressional Budget Office.
Mr. Obama himself acknowledged at last week's health reform summit that "eight to nine million people…might have to change their coverage."
President Obama said his plan will "bring down the cost of health care for millions — families, businesses, and the federal government."
CBO says health insurance premiums will continue their steady upward climb under the Senate bill. Families purchasing insurance in the individual market would see an increase of $2,100 in the year 2016, over and above increases they already will be facing. That means those families would be paying $15,200 in 2016 for health insurance if the Senate bill passes, and $13,100 if it doesn't.
Families who get health insurance through small businesses will be paying $19,200 in six years, and those working for large firms, $20,100.
PricewaterhouseCoopers released a study, commissioned by America's Health Insurance Plans, which showed the cost of a family plan in 2019 would be $4,000 a year higher if reform passes.
And Chief Medicare Actuary Rick Foster estimates that, under the Senate bill, "Federal expenditures would increase by a net total of $279 billion" between 2010 and 2019.
So his plan would cost families, businesses, and the federal government more, not less.
President Obama says his plan "brings down our deficit."
Congressional leaders hammered the CBO into submission as they drafted their legislation, using the CBO's scoring tactics against them to pretend the legislation reduces the deficit. But former CBO Director Doug Holtz-Eakin concludes the bills "can claim to be deficit-neutral only because during its first decade it offers 10 years of taxes compared with six years of subsidies.
"The Republican staff of the Senate Budget Committee estimates that, fully implemented, Democratic legislation would cost $2.4 trillion over 10 years, nearly three times the cost projected by the Congressional Budget Office," Holtz-Eakin said. This would significantly expand, not shrink, the deficit.
Further, CBO shows the Senate bill double-counts Medicare savings. Savings to the Medicare program "would be received by the government only once … they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs."
Medicare Chief Actuary Richard Foster makes the same point: A series of accounting maneuvers makes it appear that Medicare's Part A trust fund would be in better shape under the Senate bill that is the basis of the president's plan, but that's not so. "In practice, the improved Part A financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansion under [the Senate bill]) and to extend the trust fund," Foster writes.
Further, Foster says that making the cuts to Medicare that the Senate
bill requires in order to get its deficit score would "represent an exceedingly difficult challenge."
So just on these three examples – keeping your current coverage, lowering costs, and reducing the deficit – the president is wrong. It is though he simply dusted off the same speech he has been giving for a year, using arguments that have been proven as inaccurate by independent studies and analyses, and hoping that maybe, just maybe, this time the speech will work.
The president and his aides may twist arms and torture Congress into passing ObamaCare, but the more he tries to force this into law, the more the American people will reject it. The White House is dreaming if they think people will ultimately accept a plan they clearly oppose.
Ryan's Charge: Our video of the week features remarks by Rep. Paul Ryan at last week's summit that is a must-view if you haven't seen it. The Wall Street Journal today publishes excerpts from his point-by-point critique of the claims the president is making about his health plan.
In the paper's lead editorial, "Paul Ryan v. the President," also today, the Journal concludes, "The President was (miraculously) struck dumb by Mr. Ryan's critique."
It was an astonishing moment. Neither the president nor his advisers laid a glove on Ryan's fact-based analysis.
Ryan absolutely agreed that health reform is essential — for individuals and families, businesses, and the government — but he cited independent analyses of the Senate bill (which is the basis for Mr. Obama's plan) that show, "This bill does not control costs. This bill does not reduce deficits. Instead, this bill adds a new health care entitlement when we have no idea how to pay for the entitlements we already have." And Ryan added, "It bends the cost curve up, not down."
The American people are engaged as never before in the health reform debate. They are focusing on the details. They know that the numbers just don't add up and that the legislation itself breaks the promises the president is making.
White House Press Secretary Robert Gibbs said today the next step is for the House to pass the Senate bill so the process of reconciliation can move forward. The President says he wants this to happen by March 18 — two weeks from now.
The American people are watching in utter amazement as the Congress makes plans to pass health reform in a stealth maneuver in full view of the American people.
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CLIP OF THE WEEK
Congressman Paul Ryan on the Blair House summit
Congressman Paul Ryan of Wisconsin has been a prominent advocate for the rights of America's health consumers in the ongoing health reform debate. He has also been a great friend of the Galen Institute, appearing as a keynote speaker at our "Value of Innovation in Health Care" conference this past December (audio of Congressman Ryan's keynote speech can be found here). In this week's "Clip of the Week", Congressman Ryan offers his thoughts on President Obama's health overhaul at the Blair House Health Reform Summit, challenging the president's statement that his health reform plan will not add to the federal deficit.
GALEN IN THE NEWS
The Next Health Fight
Grace-Marie Turner, Galen Institute
New York Post, 02/27/10
The dialogue at last week's health summit helped the American people see the wide ideological gulf between Republican and Democratic ideas on health care reform. Republicans simply don't believe it is possible to fix the Democrats' bills because the specter of government control is woven into their fabric. Democrats, meanwhile, strongly distrust the market and will never agree to the competition-based ideas that are integral to the Republicans' reforms. The summit didn't move the needle. Yet the White House remains absolutely determined to pass this legislation. Read More »
Reform Is Best Left to the States Anyway
Grace-Marie Turner, Galen Institute
Investor's Business Daily, 02/25/10
The focus of the health reform debate is likely to shift yet again to the states where policymakers can find examples of state-level health policy experiments that have proven successful in expanding access to coverage and getting costs under control, Turner writes. She describes plans in Idaho, Indiana, and North Carolina that could serve as models for viable reform because they are more flexible and can better balance needs with resources. Read More »
Washington-Knows-Best the Wrong Approach to Health Care Reform
Grace-Marie Turner, Galen Institute
The Daily Caller, 03/01/10
President Obama could have used last week's health care summit as an opportunity to redefine success by agreeing to incremental steps through a targeted, smaller bill, Turner writes. Such an approach would garner bipartisan support and could pass Congress. But Senate Majority Leader Harry Reid says he is ready to pursue the ultra-partisan path of reconciliation. This route is wrought with political peril for Democrats as they would be betting that their constituents will suddenly share their belief that with health reform, Washington knows best. Read More »
A Far Cry From Argentina
Grace-Marie Turner, Galen Institute
National Review Online: Critical Condition, 03/03/10
Turner responds to Howard Fineman's Newsweek column about the hospital care he received during his recent trip to Argentina. Fineman notes that "most Argentines rely on a rickety public system" while those who are "better off rely on private, for-profit hospitals." Two-tier medical care is what most socialized health systems produce, Turner writes. Now Fineman has seen what happens when you have a centralized, government-run health-care system: Rich people buy their way out.Read More »
The Obama Administration's Proposed 2.9% "HI" Surtax Would Harm the Economy and Lose Revenue
Stephen J. Entin and Michael
Schuyler, IRET and Gary Robbins, Fiscal Associates
Institute for Research on the Economics of Taxation, 03/01/10
President Obama has recommended imposing a 2.9% "HI" surtax on "passive income" (income from saving and investment) to help fund his health insurance overhaul, Entin et al write. Extending the Hospital Insurance tax to income from savings would be a sharp departure from previous practice and very bad economics. The authors estimate that the Obama plan's 2.9% surtax would: depress GDP by about 1.3%; reduce private-sector capital formation by about 3.4%; lose about 70% of its anticipated income tax revenue due to lower GDP and incomes across-the-board; and decrease other federal tax revenues, causing total federal receipts actually to fall by about $5 billion a year (at 2009 levels). Read More »
Democrats, Republicans Begin Scheming Reconciliation Strategy
Human Events, 03/02/10
Lambro provides a concise guide to the reconciliation process that Democrats are plotting to use in a last ditch bid to ram their unpopular health care bill through the Senate. While Democratic leaders, eager to use whatever means are necessary to break the GOP's blockade, have peddled the end-run process as a fast-track maneuver to muscle the president's massive $1 trillion bill into law, it is anything but that. "This process is not designed to do a lot of policy making and it would be very difficult to achieve a number of things that people want to achieve" in health care reform, said Robert Dove, former Senate parliamentarian. Read More »
ObamaCare with Lipstick
John Goodman, National Center for Policy Analysis
John Goodman's Health Policy Blog, 03/03/10
Obama's health plan would completely disrupt the American labor market by providing a huge incentive for employers to drop health insurance coverage so that their workers can receive a much larger federal subsidy, Goodman writes. In 2016, ObamaCare will require almost everyone to have insurance that costs an estimated $15,000 for a family (House version). If the employer is providing the insurance, the total tax subsidy from the federal government will be about $2,295. However, if the employee were not getting insurance from the employer, he would qualify for the better insurance (less out-of-pocket exposure) in a new health insurance exchange — with a federal subsidy that would be $17,105 higher! Read More »
Back to the ObamaCare Future
The Wall Street Journal, 03/01/10
Massachusetts is teaching the country a valuable lesson in how not to reform health care, The Wall Street Journal writes. The bills for "universal coverage" are now coming due, and it appears the state political class is prepared to do lasting damage to one of America's top-flight health care systems. Last month, Democratic Governor Deval Patrick landed a neutron bomb, proposing hard price controls across almost all Massachusetts health care. State regulators already have the power to cap insurance premiums, which Mr. Patrick is activating. He also filed a bill that would give state regulators the power to review the rates of hospitals, physician groups and some specialty providers. Those that are deemed too high "shall be presumptively disapproved." The goal is to engineer a cheaper system through brute force so government can pay for health care for all. All of this is merely a preview of what the entire country will face if Democrats succeed with their plan to pound ObamaCare into law in anything like its current form. Read More »
The Impact of Comparative Effectiveness Research on Health and Health Care Spending
Anirban Basu and Tomas J. Philipson, American Enterprise Institute and University of Chicago
National Bureau of Economic Research, 01/10
Comparative effectiveness research (CER) may well increase spending and adversely affect patient health, write Basu and Philipson. Their analysis of the impact of CER-responsive subsidies suggests that a better understanding is needed as to how CER should be stratified towards obtaining the right treatments for the right subpopulations rather than focus on the best treatment for all patients. There may not be a "one size fits all" for the entire patient population so having reimbursement based on such a policy induces inefficiencies. In particular, their analysis suggests that data generated by CER should not only consider aggregate measures of response but more individualized measures beyond standard demographics such as gender, age, or race. Read More »
Hoosiers and Health Savings Accounts
Gov. Mitch Daniels
The Wall Street Journal, 03/01/10
Individually owned and directed health care coverage has a startlingly positive effect on costs for both employees and the state, writes Governor Daniels. Five years ago, Gov. Daniels asked that health savings accounts be added to the conventional plans then available to state employees. In Indiana's HSA, the state deposits $2,750 per year into an account controlled by the employee, out of which he or she pays all his or her health bills. Indiana covers the premium for the plan. Unused funds in the account — to date some $30 million or about $2,000 per employee and growing fast — are the worker's permanent property. For those who use their entire account balance, the state shares further health costs up to an out-of-pocket maximum of $8,000, after which the employee is completely protected. State employees enrolled in the plan will save more than $8 million in 2010 compared to their co-workers in preferred provider organizations and the state will save at least $20 million in 2010 because of its high HSA enrollment. Read More »
SAVE THE DATE!
Intelligent Health: Exploring the value of innovation in health care
Galen Institute Conference
Thursday, March 25, 2010
8:30am – 1:00pm
Better Care — Lower Costs: Exploring the Promise of Patient Engagement
Alliance for Health Reform Briefing
Friday, March 5, 2010
12:15pm – 2:00pm
First Annual CQ HealthBeat Conference
CQ-Roll Call Event
Tuesday, March 9, 2010
7:00am – 1:30pm
Health Reform and Women's Health Issues
George Washington University Event
Tuesday, March 9, 2010
12:00pm – 1:00pm
Are Your Medicines Safe?
Stockholm Network Webinar
Wednesday, March 10, 2010
Health Care Round Table
Independence Institute and The Heartland Institute Event
Wednesday, March 10, 2010
2:00pm – 5:00pm
Medicaid Everyone Can Count On: Public Choices for Equity and Efficiency American Enterprise Institute Book Forum
Thursday, March 11, 2010
9:30am – 11:30am