Realities of Risk and Debt

AEI's Tom Miller and Jim Capretta of the Ethics and Public Policy Center have a good post about the high-risk pools that were launched this week to great fanfare. They explain best the serious flaws in this program:

This week, the Obama administration finally launches a poorly designed, hastily constructed, and severely underfunded high-risk pool program across the fifty states.

It's a shallow attempt to appear to be doing "something" soon to help Americans lacking health insurance due to pre-existing health conditions. But apart from its stumbling start, it's also the initial poster child for the core flaws of ObamaCare. It misrepresents the real problem, promises more than it can deliver, tries to hide the real costs, and gives sensible reforms a bad name — all because the administration is more committed to its long-term vision of central government control than to actually building a sustainable solution.

High-risk pools can address pre-existing conditions without the costs and burdens of the heavy-handed federal regulation of insurance planned for 2014. In short, we can do more by doing less, in a transparent, targeted, and adequately funded manner.

Learn more here about how "the Obama team has both overstated the problem and underfunded the solution" and what we should be doing instead.

********

Unsustainable debt. The American people are aghast at the reckless spending of this Congress and administration, with a recent Gallup/USA Today poll showing 79 percent of Americans consider government debt an "extremely serious" or a "very serious" threat to the U.S.

A government report this week shows we are right to be very, very afraid.

The Congressional Budget Office has issued its long-term budgetary outlook, and it sends chills up our spines.

Under the most realistic forecast of likely congressional actions, CBO says the nation's debt will swiftly be pushed to "unsustainable levels." And that takes into account "all the effects of the recently enacted health care legislation."

Huge budget deficits and unchecked entitlement spending will mean that a larger and larger share of our nation's wealth will be gobbled up by taxes, leading to reduced economic growth, lower personal income growth, and ever higher debt, leading to a spiraling fiscal crisis.

What is the answer? We must stop the out-of-control spending, including the costs of ObamaCare that will cost many times the estimates that Congress tortured out of CBO.

The answer is not higher taxes, which the president implied this week he will recommend after the November elections. Rather, we need a completely different approach to government taxing and spending policy.

********

To that end, our upcoming major Galen summer conference could not be more timely.

Budget expert Jim Capretta of EPPC is writing an important paper for us that we will release at a briefing on Capitol Hill on Thursday, July 15. Jim will explain that instead of solving our entitlement and budget problems, ObamaCare will make them worse. The health overhaul law is based on the flawed assumption that the federal government has the capacity to manage the nation's complex health care arrangements efficiently, despite all evidence to the contrary.

Rep. Paul Ryan, the ranking Republican on the House Budget Committee, will lead off the briefing, and we will ask him to talk about his visionary "Roadmap for America's Future." His Roadmap is a detailed plan to put the nation's entitlement programs on a sustainable path, boost economic growth, lower taxes, and increase the income of working Americans.

In this A-list briefing, we have two more top budget experts as respondents: Former CBO Director Doug Holtz-Eakin, now of the American Action Forum, and former senior Treasury Department official Gene Steuerle, now of the Urban Institute.

You won't want to miss this event, so register today. And it will be webcast if you can't join us in Washington. Watch your email and visit our website at www.galen.org for details.

********

Kaiser Health has a new survey on public opinion about ObamaCare. Some takeaways:

The new release says that those with "favorable views of the new law increased seven percentage points over the past month to 48 percent, compared to 41 percent who have 'generally unfavorable' views."

Reporters concluded this means that people are warming to ObamaCare. But the biggest reason that the needle has moved is that a slightly larger percentage of people think the overhaul law is not going to affect them or their care.

But it will, of course, affect them … As health costs go up faster than they did before … As people start to find out that their employers are rethinking whether they can continue to offer health insurance … As seniors find it harder to find a doctor to see them … As the costs of the individual mandate start to sink in …

And the individual mandate is, by the way, the single most unpopular provision in ObamaCare, with only 14% of those surveyed by Kaiser thinking this is a very good idea. How on earth can you impose a mandate on everyone to purchase very expensive health insurance with this level of public support?

You can't. This will have to be changed. Even with the subsidies that some people will be eligible for, the American people don't want this.

********

Transparency: I traveled to Orlando this week to do a formal debate with Harvard Professor David Cutler about ObamaCare before at least 750 members of the American Society of Actuaries.

David is convinced that the Medicare reforms in the legislation will lead to a transformation of health care costs and delivery. I argued we need to get the financial incentives straight to truly put patients and doctors at the center if we ever are going to have a properly functioning market for health care and health insurance.

The Actuaries released a study this week that says they believe that more transparency will help bend the health cost curve down.

********

New HHS website: Central planners are, not surprisingly, good at … central planning. One example is the new website the administration launched yesterday, www.healthcare.gov. While technically proficient, it is yet another example of the HHS propaganda machine and another example of using government resources to produce a sales pitch for ObamaCare.

"This website is supposed to provide seniors, working families and small employers with objective information on all of their health care options," insurance industry spokesperson Robert Zirkelbach told the Politico PULSE. "Unfortunately, it also subjects them to campaign-style propaganda."

But the site, or at least its web address, can be a foundation for the transparency we need in our health sector. Once we get government policies changed to put doctors and patients, rather than government bureaucrats, in charge of medical decisions, the web can help empower patients with access to information they need to make more informed decisions. Providing people with accurate, objective information can be a proper role for government. That is not what we are getting now out of this administration.

********

Health Policy Matters will return after the Fourth of July break. Happy Independence Day, everybody. The fight for freedom never ends.

CLIPS OF THE WEEK

Grace-Marie Turner on the Realities of ObamaCare

In this week's Clip of the Week, Grace-Marie Turner notes that despite attractive provisions like the $250 rebate checks sent to Medicare enrollees and the ability to insure adult "children" until age 26, the realities of ObamaCare — including $575 billion in Medicare cuts, $500 billion in new taxes, and hundreds of new onerous regulations — far outweigh any benefits.
Watch now >>

Rep. Paul Ryan on True Cost of ObamaCare

In this second clip, Rep. Paul Ryan responds to a question at a recent U.S. Chamber of Commerce meeting about the budgetary impact of ObamaCare, highlighting the increasing premiums, expensive new entitlements, cuts to Medicare, and deficit spending that the legislation will bring.
Watch now >>

HEALTH REFORM

Among Some, High Marks for Health Care Overhaul's Beginnings

Robert Pear
The New York Times, 07/01/10

Despite the headline, Robert Pear describes the serious problems ObamaCare is facing, including several developments in recent days that point to problems that could threaten the success of the new health overhaul law. To date, economists see no evidence that the law has slowed the explosive growth of health spending, and some administration officials worry that it could fuel medical inflation, he writes. "There are land mines down the road because the law is fundamentally flawed," said Stuart M. Butler, vice president of The Heritage Foundation. Doctors face a 21% cut in their Medicare fees in December, with a further cut of 5% scheduled for January. The new law calls for a major expansion of Medicaid, but it became apparent this week that some states could not afford the programs they had. Governors said they would have to cut services and lay off employees if they did not receive more help from the federal government.
Read More »

Kagan's Commerce Show-and-Tell

The Wall Street Journal, 07/01/10

Sen. Tom Coburn (R-OK) had a novel way to ask Supreme Court nominee Elena Kagan her views on an individual mandate for health insurance. The Journal observes that she would favor a liberal reading of the Constitution's Commerce Clause — a law that was originally written to restrain government power, not expand it. When asked if requiring Americans to eat three fruits and three vegetables a day would be legitimate under the Commerce Clause, Ms. Kagan remarked that "courts would be wrong to strike down laws that they think are senseless just because they're senseless." In other words: Congress could do it.
Read More »

Safeguarding Electronic Records

Sally C. Pipes, Pacific Research Institute
Atlanta Journal-Constitution, 06/29/10

Health information technology (HIT) initiatives must ensure that doctors will be able to deliver high quality care — and that patients will continue to have access to it. The current government plan fails on this count, Pipes writes. Last year's stimulus package encouraged physicians to digitize their health records by making billions of dollars in subsidies available. Unfortunately, doctors were not eligible for the subsidies unless they complied with an array of "meaningful use requirements" so dizzying that virtually no doctors could meet them — including the most tech-savvy health systems in the country. Other critics of the government standards have expressed concern that the rules will drive physicians to practice one-size-fits-all medicine — perhaps at the expense of improving a patient's condition. Health IT could easily be perverted to push doctors to prescribe the cheapest drug for a given malady even if a more expensive one might work better for a particular patient. Health IT should make it easier — not harder — for doctors to treat their patients.
Read More »

Want Worse Health Care? Try British Model

The Examiner, 07/01/10

Dr. Donald Berwick's nomination to run the Centers for Medicare and Medicaid Services should be decisively rejected by the Senate, The Examiner writes. Berwick's rigidly ideological view that America's health system should mimic Britain's NHS is inimical to the preservation of individual freedom and high quality care. This is a radical departure from the focus on individual patients and their private relationship with doctors of their choice that has made American medicine the best in the world. Americans live longer, healthier lives than Brits precisely because government bureaucrats have not been in charge of our health care for the past 60 years. If confirmed by the Senate, Berwick will define that quality down to British standards. That would not be choosing well.
Read More »

Revitalizing Federalism: The High Road Back to Health Care Independence

Robert E. Moffit, Ph.D.
The Heritage Foundation, 06/30/10

The health overhaul law is a direct threat to American federalism that, if allowed to stand, will reduce the states to mere instruments of federal health policy rather than the "distinct and independent sovereigns" they were intended to be, Moffit writes. Congress is intruding deeply into the internal affairs of the states, commandeering their officers, specifying in minute detail how they are to arrange health insurance markets within their borders, and determining the products that will be sold to their citizens. State legislatures should consider (among other actions) crafting a constitutional amendment to guarantee the personal liberty of every citizen in the area of health care. Given the trajectory of federal health policy, state officials should take the lead in the next phase of the national health care debate, reclaim their rightful authority, and change the facts on the ground for Congress and the White House.
Read More »

Covering Preexisting Conditions: High-Risk Pools vs. Obamacare Mandates

Jeffrey H. Anderson, Pacific Research Institute
National Review Online: Critical Condition, 06/28/10

GOP lawmakers can immediately provide much-needed help for the uninsured who have pre-existing conditions by providing full funding for state-run high-risk pools (preferably in combination with offering long-overdue tax breaks for the uninsured), Anderson writes. The health overhaul law would address the problem of covering those with expensive pre-existing conditions by mandating that insurers offer them coverage in the regular market, at artificially low rates. For four simple reasons, the high-risk pool approach makes colossally more sense: 1) High-risk pools wouldn't ignite government control of our entire health care system; ObamaCare would; 2) High-risk pools wouldn't raise everyone else's premiums; ObamaCare would; 3) High-risk pools would cost under $20 billion a year; ObamaCare would cost more than $200 billion a year; and 4) High-risk pools won't threaten the private insurance market; ObamaCare's approach would likely decimate the private insurance market.
Read More »

STATE ISSUES

Short-Term Insurance Buyers Drive Up Cost in Mass.

Kay Lazar
The Boston Globe, 06/30/10

The number of people who appear to be gaming Massachusetts' health insurance system by purchasing coverage only when they are sick quadrupled from 2006 to 2008, according to a report from the Massachusetts Division of Insurance, Lazar writes. The result is that the state's insured residents wind up paying more for health care. According to the report, "The active members subsidize some of the costs tied to those individuals who terminate within one year." The number of people engaging in this phenomenon — dumping their coverage within six months — jumped from 3,508 in 2006, when the law was passed, to 17,177 in 2008, the most recent year for which data are available.
Read More »

INTERNATIONAL HEALTH SYSTEMS

What You Don't Know Can Hurt You: Where Does All the Money Go?

Barrie B F Hebb
Atlantic Institute for Market Studies, 06/10

There are critical deficiencies in the information available to the Canadian public about the quality of care they receive for their tax dollars, according to the Nova Scotia-based Atlantic Institute for Market Studies. Given the amount of taxpayer money spent on Canadian health care, data collection activities by hospitals and governments, and assessments of the health care system, there is virtually no specific information that is reasonably publicly assessable about the outcomes from the spending of that money. These deficiencies make it nearly impossible to hold the public health care system accountable. As a result, patients are poorly informed about the quality and risk to care they may receive. This report develops an approach that can be used to identify what the public needs to know, and more importantly, identifies what the public does not yet know. In particular the following areas require immediate attention and improvement: quantity and quality of indicators; transparency; wait times, and; patient safety.
Read More »

Events

Health Reform Implementation: When Sausage-Making Moves Downtown
Alliance for Health Reform Briefing
Friday, July 9, 2010
12:15pm – 2:00pm
Washington, DC

Why the Obama Health Law is Not Entitlement Reform
Galen Institute Capitol Hill Briefing
Thursday, July 15, 2010
10:30am – 12:00pm
Washington, DC
For more information, please contact Sterling Meyers at sterling@galen.org.

SHARE THIS ARTICLE

About the author