Stalling Out


No vote. House leaders and the White House are working furiously to try to get a floor vote on health reform legislation before the August recess, but a rebellion inside the Democratic party and alarm bells from constituents are virtually certain to delay action until the fall.

The American people are increasingly focused on the details of the reform plans making their way through Congress, and they don't like what they see. President Obama's news conference on Wednesday did nothing to allay their fears, as The New York Times reported yesterday in an article, "For Public, Obama Didn't Fill in Health Blanks."

Just wait until Members go home in August! I predict they will force their leaders to go back to the drawing board as constituents fire back over key elements of the bills: The employer mandate, the individual mandate, government control over health decisions, cuts to Medicare, tax increases that hit small businesses, and a "public option" that would run tens of millions of people out of their private coverage and into a government-run plan. Any one is a huge problem; together, the combination is explosive.



Sleeper issue: Ceci Connolly wrote a front-page article for The Washington Post on Wednesday about bipartisan support for a mandate that would force all Americans to buy health insurance. The only conceivable reason Ceci could think there is agreement about an individual mandate is that this simply hasn't become an issue. The one constituency which doesn't have millions of dollars to spend on advertising lobbyists is the American people.

Mr. Obama has changed his campaign position and now supports an individual mandate. John Fund writes in today's Wall Street Journal that young people, one of Obama's key constituencies, will be hit hardest:

"If the government mandates that everyone must have health insurance, healthy young people will have to buy policies that don't reflect the low risk they have of getting sick. The House and Senate bills do let insurers set premiums based on age, but only up to a 2-to-1 ratio, versus a real-world ratio of 5 to 1. This means lower prices for older (and wealthier) folks, but high prices for the young. 'They'll have sticker shock,' says Rep. Paul Ryan, ranking Republican on the Budget Committee."

Members will surely be hearing about this in their town hall meetings. YouTube videos show it already is happening. There is not bipartisan support for a mandate. This inevitably would lead to government control over our health sector.



The bipartisan solution. The Wall Street Journal's lead editorial today moves us into the next phase of the health reform debate: What should we do instead? This is a must read.

It describes the strong bi-partisan support for providing tax credits for the uninsured and capping the tax exclusion for job-based health insurance — both policies that move incentives in the right direction. The Journal encourages the president to turn to this "middle way to success" that could gain votes from Democrats and Republicans and turn away from "the liberal dream of government-run health care."



No public plan needed. Health insurance plans offered to state employees could provide an option for people to obtain coverage and get away from the politically-volatile and dangerous government-run health plan that congressional leaders and the White House want.

I mentioned this in my testimony last week before the Senate Commerce Committee, and Chairman Pryor and Ranking Member Wicker were both intrigued.

State employees may not want others to buy into their health plans, but the private insurers that do offer coverage in that closed marketplace could be required, as a condition of offering plans to state employees, to offer mirror coverage to those outside.

In most plans on the table, the uninsured would be empowered with new credits to help them buy coverage. Plans offered to state employees could provide a fall-back place for them to buy coverage without throwing 90 million Americans out of their current private coverage. The Heritage Foundation has published a new study by The Lewin Group with an updated analysis of the number of people who would lose private coverage if a new federal health insurance program were introduced and made available to everyone. It makes an important contribution to the debate, and we provide the link below.



Welcome! Jeff Lungren has joined the Galen Institute as Communications Director responsible for focusing and amplifying our messages. He has more than twelve years of senior public affairs and government relations experience as a White House legislative aide and congressional communications aide.

Jeff most recently was a Special Assistant to the President for Legislative Affairs in the Bush Administration, where he served as the liaison to more than 100 House Members and helped to devise and implement the Administration's agenda on numerous issues before the Congress.

Here's more of his very impressive bio. He's a terrific new addition to our superb team at the Galen Institute.

Grace-Marie Turner

Recent News Articles and Studies

Galen in the News
Analysis of the July 15 Draft of The American Affordable Health Choices Act of 2009
Health Care Reform and the American Character
Charitable Expectations of Nonprofit Hospitals: Lessons From Maryland
The Ethics of Health Care Reform
2009 U.S. Index of Health Ownership
Working Paper: An Illustration of the Impact on Hospitals in California of a Government-Run Health Plan that Pays Medicare Fee-for-Service Rates
Competitive Pricing for All Medicare Health Plans


We reached at least five million people this week through our radio interviews and commentaries, helping people to understand what's actually in the health reform bills making their way through Congress and what it would mean for them. We sent you earlier this week aler
ts about some of them. Grace-Marie has done nearly 30 radio interviews this week, spoke to an over-flow crowd at a Tea Party event in Charlottesville, VA, and wrote several commentaries. Here is her latest article in National Review Online, with links below to two others published this-week.

In Governors Alarmed about Health-Reform Costs, Grace-Marie wrote that the president's remarks during his news conference were detached from the reality of the bills making their way through Congress. He appears to believe he can continue to talk the American people into taking this poison pill of sweeping health reform, but his promises simply don't square with what's actually in the legislation before Congress. The bills set strict federal standards mandating what benefits must be covered by health insurance that would steamroll over patient preferences and extend sweeping federal regulation into virtually every corner of the health sector. The softball questions from reporters at the news conference failed to draw him out on that or any number of other crucial issues.

Here are links to two more of our pieces from the New York Post and New York Times.

New York Post: Reality Bites Into President's Pipe Dreams

The New York Times: Should the Rich Pay for the Uninsured?


Analysis of the July 15 Draft of The American Affordable Health Choices Act of 2009
John Sheils and Randy Haught
The Lewin Group, 07/17/09

If fully implemented in 2011, the Lewin Group estimates that about 103.9 million people would become covered under the newly established public plan. However, coverage under private insurance would decline by 83.4 million people. This is a 48.4% reduction in the number of people with private insurance (currently 172.5 million people). The study, commissioned by The Heritage Foundation, also examines the impact of legislation before Congress on Medicare payment reforms, physicians, and hospitals.

Health Care Reform and the American Character
Rep. Paul Ryan
The American Spectator, 07/23/09

The American character itself and the principles of free market democracy which protect and preserve it may be lost beyond recovery if Congress chooses the wrong path to health care reform — the path down which the Obama Administration seems determined to lead our country, Rep. Paul Ryan writes.

Charitable Expectations of Nonprofit Hospitals: Lessons From Maryland
Bradford H. Gray, Urban Institute, and Mark Schlesinger, Yale University
Health Affairs Web Exclusive, 07/23/09

Should nonprofit health care providers have to spend a certain amount on activities to benefit their communities in order to retain their tax exemptions? This study shows that in 2007, virtually all Maryland hospitals would have failed to meet a spending threshold proposed that year by the Senate Finance Committee's minority staff, which proposed that nonprofit hospitals, as a condition of their tax exemption, be required to spend at least 5% of expenditures on charity care. Beginning in 2010, all nonprofit hospitals in the country will be required to file reports on community benefit spending with the IRS, using categories that are similar to those in Maryland.


The Ethics of Health Care Reform
Merrill Matthews, Ph.D.
Institute for Policy Innovation, 07/20/09

A consumer-driven health care system is the one that best meets the criteria Americans want from an ethical health care system, writes Matthews. When a third party — government, insurer or employer — controls most of the health care funds, that entity eventually becomes the decision maker, not the patient. The consumer-driven model is the only one that incorporates both our fundamental principle — patient control — and yet balances the consequence-oriented need for access to coverage and quality care that is financially sustainable over the long term.

2009 U.S. Index of Health Ownership
John R. Graham
Pacific Research Institute, 07/24/09

This index uses 24 variables to quantify how state laws and regulations affect the liberty of citizens involved in state government health programs (primarily Medicaid), the private health insurance market, and the provision of medical services. The top five states were North Dakota, Montana, Idaho, New Hampshire, and Alabama in allowing their citizens the highest degree of health ownership. The bottom five were New York, Massachusetts, North Carolina, Rhode Island, and New Jersey, where the government has taken the most control of health care from its citizens.


Working Paper: An Illustration of the Impact on Hospitals in California of a Government-Run Health Plan that Pays Medicare Fee-for-Service Rates
America's Health Insurance Plans, 07/16/09

A new government-run plan would impose significant financial losses on California hospitals, according to this AHIP analysis. If all patients moved to a government-run plan that paid Medicare fee-for-service (FFS) rates, virtually every hospital in California would be forced to operate at a net loss, even if the current losses incurred by hospitals for uncompensated care were eliminated. Some hospitals would face a loss of as much as 34%.

Competitive Pricing for All Medicare Health Plans
Robert F. Coulam, Simmons College; Roger Feldman, University of Minnesota; and Bryan E. Dowd, University of Minnesota
American Enterprise Institute, 07/09

Premiums for FFS Medicare and private Medicare Advantage (MA) plans vary by market area in ways that do not reflect underlying costs, meaning sometimes the government pays too much to provide health care for beneficiaries. Introducing competitive pricing for all Medicare plans, including FFS, could save up to 8% of Medicare expenditures, Coulam et al write.

Upcoming Events

Grace-Marie Turner speaking on the Dan Lovallo Show
WDRC-AM Radio Broadcast
Friday, July 24, 2009, 3:30 p.m.
Bloomfield, CT

Grace-Marie Turner speaking on Health Talk with Dr. Ronald Hoffman
WOR-AM Radio Broadcast
Friday, July 24, 2009, 4:00 p.m.
New York, NY

Grace-Marie Turner speaking on the Mo
rning Air Show

Relevant Radio Broadcast
Monday, July 27, 2009, 8:00 a.m. EDT

Rally Against Government Run Health Care
Independence Institute Event
Tuesday, July 28, 2009, 11:30 a.m. – 12:30 p.m.
Denver, CO

Global Payments: Panacea for Payment Reform
Philips Webinar
Wednesday, July 29, 2009, 1:30 p.m. – 2:45 p.m. EDT

The Value of Laboratory Screening and Diagnostic Tests for Health Care Improvement
Lewin Group Briefing
Thursday, July 30, 2009, 12:00 p.m. – 1:15 p.m.
Washington, DC
For more information, please contact Kim Bernet at or 202-637-9596.

Hurting or Helping Consumers? Destroying Federal Preemption One Industry at a Time
The Heritage Foundation Event
Wednesday, August 5, 2009, 11:30 a.m. – 1:00 p.m.
Washington, DC



Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features a commentary by Grace-Marie Turner on the major developments and issues of the week as well as summaries of writings by participants in the Health Policy Consensus Group and other articles of interest from the health policy world, plus announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at

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The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.