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'Conceptual Language' Hides Health Care's Costs
Michael Barone
Some of the headlines in recent days are not worthy of belief. No, I'm
not referring to the headlines that Barack Obama won the Nobel Peace
Prize, however odd that many seem to many (including, it seems, Obama
himself). I'm referring to the headlines earlier in the week to the
effect that the health care bill sponsored by Senate Finance Committee
Chairman Max Baucus will cut the federal deficit by $81 billion over
the next 10 years.
Yes, that is what the Congressional Budget Office estimated. But, as the CBO noted, there's no actual Baucus bill, just some "conceptual language." Actual language, CBO noted, might result in "significant changes" in its estimates. No wonder Democratic congressional leaders killed requirements that the actual language be posted on the Internet for 72 hours before Congress votes.
More significant is the number most publications did not put in their headlines and lead paragraphs: CBO's estimate that the Baucus "conceptual language" would increase federal spending by $829 billion over 10 years. So how do you increase federal spending and cut the deficit at the same time?
One way is taxes. The Baucus conceptual language includes a tax on high-cost insurance plans ($210 billion), penalties for not having insurance ($27 billion) and "indirect offsets" (whatever they are -- $83 billion).
In addition, costs are fobbed off on state governments in the form of more Medicaid spending, and savings are projected from future reductions in Medicare that will surely turn out to be imaginary (Congresses of both parties have acted to prevent such reductions every year since 2003).
We know from past experience that cost estimates of all government health care programs (except the 2003 Medicare Part D prescription drug benefit, which has private market competition) tend to understate actual costs. So the Baucus bill -- er, conceptual language -- if enacted is likely to expand government spending by more than the estimated $829 billion.
And perhaps quite a bit more. The Baucus measure enables families without employer-provided insurance to obtain it at exchanges with subsidies that make it cost less than what those with employer-provided insurance pay. The latter are a majority of voters -- how long are their elected representatives going to let this disadvantage stand?
The Baucus measure subsidizes low-income families. Say you make $48,000 a year and get a $900 subsidy. As your income rises, this subsidy would be phased out, raising your effective marginal tax rate to as much as 70 percent. How long will Congress let this stand?
And perhaps even more. The Wall Street Journal's Kimberley Strassel points out that well-placed senators are getting special favors in the bill. Majority Leader Harry Reid gets the feds to pick up Nevada's extra Medicaid spending. Charles Schumer gets many high-cost insurance plans in New York exempted from tax. How long before other members seek similar breaks for their states?
The Baucus bill attempts to force more Americans to buy health insurance policies designed according to government specifications, which means they will be very expensive and consumers will be shielded from costs. But that's likely to produce an increased demand for health care procedures and bend the cost curve not downward but upward.
Market incentives like those in Part D that might shift it downward are pretty much absent from the Baucus bill. All this will still, according to CBO, leave 25 million Americans without health insurance.
CBO estimaters are constrained by budget rules from guesstimating how costs will skyrocket because of political pressures. The rest of us are not. We can regard CBO's estimate of $829 billion in additional spending not as a ceiling but as a floor.
We can reasonably conclude that the Baucus bill -- or whatever similar measure Reid and Schumer concoct -- would vastly and permanently increase public sector spending and impose a crushing burden on the private sector in a weak economy. That burden would be particularly heavy on low earners forced to buy expensive policies or else pay stiff fines, with money they would otherwise receive as wages or salaries.
There are no good public policy reasons to pass such a bill hurriedly and before it can be fully analyzed and debated. Only political reasons: line up enough Democratic members before they can process the public opinion polls that show most voters hostile to such measures and before they are faced with probable though not certain Democratic defeats in Virginia and New Jersey in November.
Too bad the Nobel committee doesn't have a vote.
========
Michael Barone is senior political analyst for The Washington Examiner. To find out more about Michael Barone, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.
Copyright 2009 U.S. News and World Report. Distibuted by Creators Syndicate Inc.
This news arrived on: 10/12/2009
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Posted Comments:
10-20-2009 13:21
casey42 wrote:
For 6 years king George the second had a rubber stamp congress that would give him any thing he asked for. He did not ask for drilling off shore, he did not ask for regulation of financial institutions,he did not ask for protection from the government invasions of privacy and he did not ask for health care reforms. Now we have a president that is trying to help the workers and the obstuctionists of the minority party are trying to sabatoge his efforts, go team.
10-12-2009 14:49
JCE wrote:
The voter is no more idiot than when they backed Bush to the hilt. Of course the voter is, and has been, and idiot, for decades, to allow this to happen. Only idiots would allow huge bills, more than 50 pages. Only idiots would allow lobbying, or printing money, or borrowing like crazy, and not having a balanced budget. And only idiots would let the insurance companies write a bill, which is what has happened. And only an idiot could see any resemblance to what Obama has asked for, and what the insurance companies and both parties are coming up with. And only an idiot could believe that anything the insurance companies and both parties make into a bill won't cost far more money than the present impossible situation is costing. How to determine how many idiots? Look at the population that doesn't vote, and then at those that do, then add the big business and corporation execs and owners, and then the politicians, and government officials, state and federal, past and present, and that number will tell you pretty close the precise number of idiots in the country today.
10-12-2009 13:08
I wrote:
Excuse me - but how does penalizing those who don't have insurance going to help them? Or taxing insurance plans?
It would seem to me that those who don't have insurance can't afford it. Penalizing them and taxing other insurance plans is nothing short of extortion.
It seems to me that the only plan Pres. O. knows is spend money and raise taxes. It's no wonder the rest of the world is now looking to the Asian market to take the lead in the world's currency. Our dollar is being devalued left and right, the government is getting away with strong-armed tactics, and the media is applauding it. We've become a bunch of idiots!
It would seem to me that those who don't have insurance can't afford it. Penalizing them and taxing other insurance plans is nothing short of extortion.
It seems to me that the only plan Pres. O. knows is spend money and raise taxes. It's no wonder the rest of the world is now looking to the Asian market to take the lead in the world's currency. Our dollar is being devalued left and right, the government is getting away with strong-armed tactics, and the media is applauding it. We've become a bunch of idiots!
10-12-2009 09:52
redneck wrote:
"wrote"?????
I'm not sure I understand what you are saying? Are you saying that even with a college education there are no jobs? Or are you saying that "idiots can be educated". As proven by Biden! Or as I found out, with a degree in engineering I can't make as much as someone who spent their time in college partying, and takeing High school over again as in "Liberal Arts". That partying (frats) made connections that got the idiot a "position", not a job! No qualifications neccessary! Maybe just play golf with the boss (a former frat brother).
10-12-2009 03:35
wrote:
conceptual language...transformational grammar
Mandatory education never stopped failure! When are we going to get over the idea that failure is actually success or that failure should be rewarded with federal aid? Failure, organized or disorganized, is still failure. No one in government has to prove to the taxpayer that government has the power to incur debt. It is the knowledge that government does NOT have the power to reduce debt that is a bit disconcerting! If that is because knowledge is not power, then we are in trouble especially in the field of education. No one could see a justification for it if it does not work. Is it worth the cost? Not if one is going to die anyway. How much figuring do they need to do? H-E-L-L-O????????????
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