Breaking Promises

How can President Obama possibly endorse the bill that Speaker Pelosi unveiled to such great fanfare on Thursday? The House bill breaks major promises he has made to the American people about his goals for health reform. To name just a few:

Cost: The president has assured us that health reform would lower health costs. But the House bill would bend the federal cost curve UP, not down, according to the Congressional Budget Office's preliminary analysis.

And only by using budget gimmicks were House leaders able to get the reported cost to $894 billion over 10 years, just barely under the president's somehow magic $900 billion number. But that's not the real cost. Robert Pear of The New York Times reports today, "By the most commonly used yardstick, the bill would cost $1.05 trillion over 10 years, roughly $150 billion more than President Obama had said he wanted to spend on the legislation."

So the real cost will be over $1 trillion — and that doesn't include the "Doc Fix." The Speaker had the audacity to introduce that bill separately so the $245 billion price tag wouldn't get counted in the total cost of the bill. Senate Majority Leader Harry Reid tried that trick last week, and went down in flames. Can the AMA possibly still stay on board with the House bill, since its deal has now been broken?

And health insurance premiums will soar, especially for younger families because the insurance regulations in the House bill allow only a 2 to 1 premium variation between the youngest and healthiest policy holders and the oldest and sickest.

And this doesn't even count the huge economic distortions, cost-shifting, and new taxes that surely will be passed along to consumers.

Middle-class taxes: The president promised no tax increases on the middle class, but they surely will be paying the lion's share of the $500 billion in new taxes to finance the bill. Americans for Tax Reform posted a listing of the new taxes in the House bill which violate the president's pledge.

And add to that the estimated $33 billion in taxes the CBO says will be collected from individuals who don't buy the expensive, government-mandated health insurance.

Keeping health insurance: A coalition of major business groups late Thursday sent a letter to Speaker Pelosi and Republican Leader John Boehner saying the House bill falls short of the bipartisan goal of controlling costs and could jeopardize group health insurance provided by employers to 160 million workers.

These are people who should know because they represent the companies that provide health coverage to the majority of Americans: The American Benefits Council, Business Roundtable, Corporate Health Care Coalition, the ERISA Industry Committee, National Association of Manufacturers, National Association of Wholesaler-Distributors, National Business Group on Health, National Coalition on Benefits, National Retail Federation and U.S. Chamber of Commerce.

No savings from the public plan: CBO concludes that the government insurance option would typically charge higher premiums than private plans available in the new Health Insurance Exchange. "That surprising conclusion raises doubts about Democratic promises that a government-run insurance plan would provide a lower-cost alternative to consumers," Politico reports. And it adds, "At the same time, it calls into question Republican charges that the plan amounts to government takeover of health insurance — because only 6 million people would enroll in the plan, according to the CBO."

The 400,000-word House health reform bill is absolutely astonishing in the level of government intrusion it would shove into the lives of every American, every business, and every health care professional. I won't bore you here with the legislative jargon, but pick a page, any page, and you will see what I mean. Here is a link to the bill and a much more reader-friendly section-by-section analysis. You will see that all power and control vests to the government.


Hitting small business hard: Don't miss the new analysis by WellPoint that mined its own actuarial data to model the basics of the plan incorporated in the House bill, using data from 14 states where it runs Blue Cross plans.

In all 14, it found that the legislation would drive up premiums for small businesses and individuals. Young and healthy consumers would see the largest increases, with premiums more than tripling in some states.

The head of the National Federation of Independent Business, Dan Danner, said the huge cost of the health reform bill "will ultimately come out of small business owners' pockets and prohibit them from growing, investing in their business and hiring new employees."

The bill requires detailed recordkeeping on employee health insurance, imposes new taxes and new civil penalties for not complying with the barrage of new federal health insurance laws, and puts burdens on virtually every company to pay for this expensive insurance, in perpetuity. See my article, linked below, in Tuesday's Wall Street Journal for a report on how this is (not) working in Massachusetts.


Lock out: Speaker Pelosi's announcement of the House bill had all the trappings of a major campaign rally. The only problem was that the public was locked out. Big chain link fences surrounded the West Front of the Capitol — usually a very open, public space — to make sure only supporters of the bill were allowed in.

This is so symbolic of the whole process: The American people are being shut out of the debate. All congressional recesses have been cancelled since August to keep members away from their constituents as much as possible, doors are locked while negotiations over the bills are taking place (breaking another presidential promise of an open and public process), and now, the public was even shut out of the public space outside the Capitol for the announcement rally.

This legislation is going to have an impact on the economic and health care freedom of Americans for decades to come. It is beyond irresponsible for Congress to be on the verge of passing these bills with this kind of disregard for the will of the people.

Politico carried a full-page ad yesterday with the pictures of 36 former members of Congress defeated in the 1994 elections in the aftermath of HillaryCare. It could happen again unless members open up this process to heed the fears of their constituents about a government take-over of the health sector.

The Independent Women's Forum conducted its own poll that found women want to make their own choices and decisions about their and their family's health care and they do not want politicians intruding.


Finally, the Hub: Please visit our new Health Reform Hub website for the best and most up-to-date news, information, and commentary about the debate. Our articles summary below has highlights of just a few of them, but there is so much more to learn! Visit us and join the conversation!

Featured Articles


Costs Keep Rising
Grace-Marie Turner, Galen Institute
The Wall Street Journal, 10/27/09

Three years after Massachusetts enacted its sweeping health reform legislation, rising health costs continue to bedevi
l the state and threaten to derail reform efforts, Turner writes. The regulatory burden on residents and businesses also continues to grow. Another undelivered promise of the Massachusetts health reform is that unpaid-for emergency room visits would decline if everyone had access to doctors. But many people still show up at the safety-net hospitals, and the hospitals say they now receive much less if any compensation for treating these patients. Some of these hospitals are threatening to file for bankruptcy. Washington might want to see how Massachusetts does in solving these problems before proceeding with a similar model for the country, Turner concludes. Read More »

More Drugs, Less Crime: Health Reformers Should Worry About Setting Back Pharmaceutical Innovation
Grace-Marie Turner, Galen Institute
New York Daily News, 10/26/09

Prescription drugs are the most important tools in the medical arsenal, but drugs don't merely make individuals healthier — they also can improve society as a whole in subtle and unexpected ways, Turner writes. A new study from the National Bureau of Economic Research examined evidence dating from 1997-2004 and found a clear pattern: As prescriptions for psychiatric drugs increased, the incidence of violent crime decreased. In particular, they found that sales of the newest, most cutting-edge drugs meant to treat Attention Deficit Hyperactivity Disorder correlated most strongly with drops in violent offenses. If regulators take steps to encourage — not undermine — pharmaceutical innovation, we can witness even greater public health successes in the future, Turner writes. Read More »

Read more about pharmaceutical issues on the Health Reform Hub >>

An NRO Symposium: Can Obamacare Be Stopped?
Grace-Marie Turner, Galen Institute
National Review Online Symposium, 10/28/09

Whether or not Congress passes health reform legislation depends largely upon whether policymakers in Washington start listening to the American people, Turner writes. A poll released last week by the Galen Institute shows the public is overwhelmingly opposed to critical aspects of ObamaCare. A better approach, which is much more in line with the wishes of the American people, would be helping the uninsured get affordable private coverage, encouraging genuine competition to get health costs under control, making health insurance portable, making sure those with pre-existing conditions can get coverage, and medical malpractice reform. Read More »

Read more about health reform proposals on the Health Reform Hub


Waiting Your Turn: Hospital Waiting Lists in Canada, 19th Edition
Nadeem Esmail
Fraser Institute, 10/29/09

Canadians seeking surgical or other therapeutic treatment are enduring a median wait time of 16.1 weeks, roughly the same delay they experienced in 2000-2001, even though governments have made substantial increases in health care spending since then, according to the Vancouver-based Fraser Institute. Among the provinces, Ontario achieved the shortest total wait in 2009, 12.5 weeks, with Manitoba (14.3 weeks), and Quebec (16.6 weeks), next shortest. Newfoundland & Labrador exhibited the longest total wait at 27.3 weeks; the next longest waits were found in Prince Edward Island (26.7 weeks) and New Brunswick (25.8 weeks). Read More »

Read more about international health systems on the Health Reform Hub >>


Private Health Plans: Where Is the Value? What Is the Point?
Clark C. Havighurst, Duke University
American Enterprise Institute, 10/09

The value of private health plans to the economy does not lie merely in making health care cheap for patients. Instead, their principal reason for being should be their creativity in designing and administering coverage appropriate for people with different preferences and resources. Unfortunately, in the collectivist, one-size-fits-all health system currently being crafted by Congress, it is not obvious that private health plans will serve consumers well enough to justify their preservation. In general, health reform should encourage private health plans to offer different levels of coverage, each with a price tag accurately reflecting the value of the coverage provided. The current reform movement seems pointed in just the opposite direction, toward mandating high-cost coverage for all and hiding or deferring the potentially staggering cost to the nation of paying for it. Read More »

The WellPoint Revelation
The Wall Street Journal, 10/28/09

At the request of congressional delegations worried about their constituents — call it a public service — WellPoint, a national health insurance company, mined its own actuarial data to model ObamaCare in the 14 states where it runs Blue Cross plans. In all 14, the report found that ObamaCare would drive up premiums for the small businesses and individuals who are most of WellPoint's customers. Young and healthy consumers will see the largest increases — their premiums would more than triple in some states — though average middle-class buyers will pay more too. What distinguishes the WellPoint study, the Journal editorialized, is its detailed vigor. Read More »

Fact Check: Health Insurers' Profits 35th of 53
Calvin Woodward
Associated Press, 10/26/09

In the health care debate, Democrats and their allies have gone after insurance companies as rapacious profiteers making "immoral" and "obscene" returns while "the bodies pile up." But in pillorying insurers over profits, the critics are on shaky ground, the Associated Press reports. Health insurers posted a 2.2% profit margin last year, placing them 35th of 53 industries on the Fortune 500 list. HealthSpring, the best performer in the health insurance industry, posted profits of 5.4%. That's a less profitable margin than was achieved by the makers of Tupperware, Clorox bleach, and Molson and Coors beers. Read More »

Read more about private health insurance on the Health Reform Hub >>


Time Release: The Effect of Patent Expiration on U.S. Drug Prices, Marketing, and Utilization by the Public
Frank R. Lichtenberg, Columbia Business School and National Bureau of Economic Research and Gautier Duflos, Paris School of Economics
Manhattan Institute, 10/09

While branded drugs are significantly more expensive than generics, this study does not find any evidence that patent protection reduces utilization of drugs. Lichtenberg and Duflos base their data on nearly all prescription drugs sold in the United States and examine the impact of the expiration of drug patents on U.S. drug prices, marketing, and the quantity of drugs consumed. After patents expire and generic competition slashes drug prices, the authors find that drug utilization remains essentially unchanged. Prices undoubtedly affect utilization, but companies' marketing efforts on behalf of branded drugs also help ensure widespread utilization. When patents expire, both marketing and prices fall by a
bout 60%, resulting in no net increase in utilization. Read More »

Read more about pharmaceutical issues on the Health Reform Hub


Preserving Freedom and Federalism: What's at Stake for Americans in the Health Care Debate
The Heritage Foundation Event
Wednesday, November 4, 2009
12:00pm – 1:30pm
Washington, DC

What Health Care Innovation Means for Consumers
The Brookings Institution Event
Thursday, November 5, 2009
2:00pm – 3:30pm
Washington, DC

Politicians, Public Options, and Patients: What the Canadian Experience Teaches Us About Political Control of Health Care
Galen Institute and Hudson Institute Event
Monday, November 16, 2009
4:00pm – 5:30pm
Washington, DC