James C. Capretta is a Fellow at the Ethics and Public Policy Center.
During August, in scores of meetings which were held in all parts of the country and attended by thousands, concerned citizens sent unmistakable signals to their elected political leaders that if Congress is going to produce anything on health-care this year - and many openly stated they hope nothing at all will pass - they want it to be a more targeted, less expensive, and less controversial product, and one based on bipartisan consensus and not ideological ambition. Polls show most Americans are strongly opposed to a full governmental takeover of U.S. health-care, and they rightly sense that is exactly what would happen if the bills currently under consideration were to pass.
And so how are Democrats responding to this spontaneous display of widespread public disapproval of their planned agenda? Not with a sensible course correction, it seems. No, by all appearances, it's still full steam ahead.
On Tuesday, Pres. Obama delivered a campaign-style speech to his union supporters which made news mainly because the president went off of his prepared remarks to deliver a false attack on his political opponents. The president said those who are against his government-heavy plan have offered no alternatives, which is flatly not true. Months ago, Senators Coburn and Burr, and Congressmen Ryan and Nunes offered the Patients' Choice Act which would build a true consumer-driven marketplace for insurance and medical services.
Also on Tuesday, Senate Finance Committee Chairman Max Baucus distributed a summary of his long-awaited plan to selected members of his committee, and it looks to be the same plan that was under discussion in June and July, with only the most modest of tweaks. It is built on the same flawed foundation as the House bills, starting with a so-called "individual mandate" that would penalize any American who didn't sign up with government-approved insurance. Employers would also pay a tax if any of their lower wage workers ended up on government-subsidized plans, which would create a strong disincentive for hiring such workers in the first place. The federal government would vastly expand health-care entitlement spending by enrolling millions of people in Medicaid and standing up a new entitlement for persons with incomes between 133 and 300 percent of the poverty line. The new spending in the Baucus plan is said to be near $900 billion over a decade, but no official estimates are available.
To "pay for "the additional federal costs, Sen. Baucus wants to impose a vast array of new taxes, on health insurers, drug companies, device manufacturers, and clinical labs, all of which will be passed on to patients, of course. In addition, Sen. Baucus wants to impose payment rate reductions in Medicare and Medicaid which will save between $400 and $500 billion over ten years. Among the cuts would be a deep reduction in Medicare Advantage payment rates, which would force millions of seniors out of their current coverage and back into the traditional Medicare program and expensive Medigap plans.
The Baucus plan is flawed from the get-go because it starts from the same misguided premise as its counterparts in the House. It seeks to achieve "universal coverage" but without building a functioning marketplace to slow the pace of rising costs. And so, if it were to pass, costs would escalate just as rapidly in the future as they have in the past, and it would only be a matter of time before the current administration or its successor proposed new and draconian "cost control" measures to hold down governmental health-care spending.
At that point, federal central planners would resort to the same kinds of price setting devices that have been tried for years in others settings, including Medicare. And the predictable result would be a large reduction in the willing suppliers of medical services, which would mean queues and lower quality care all around.
By James C. Capretta
Reprinted with permission from National Review Online
National Review Online