Posts Tagged ‘doctor fix’

The Worm Is Beginning To Turn On ObamaCare

January 21, 2011

Things are rapidly getting out of hand for ObamaCare.

The House just voted to repeal it with a bipartisan vote of 245-189 (with three Democrats joining all the Republicans).

For the record, the vote in favor of repealing ObamaCare was far higher than the vote to pass the damn thing (219 – barely above the minimum necessary for passage).

26 states are now officially on board with Florida to challenge ObamaCare in federal court.  The Florida State Attorney General said last night on Fox News’ “Greta” program that 2 more states have promised that they will be on board, and she has been in talks with several other states.

More than half the states now want ObamaCare tossed into the trash where it belongs.

Democrats and the mainstream media have routinely sneered about what a useless and time-wasting “symbolic” gesture this vote was.  One can only wonder: during the dark and dreadful reign of Nancy Pelosi and the Democrat majority during the last two years, more than 400 bills were passed that were not taken up in the Senate.  And that was during a period in which Democrats RAN the Senate.  Did the Democrats and the mainstream media come unglued over those “time wasting gestures”????  I don’t think so.

Americans for Tax Reform has compiled a long list of new tax hikes that ObamaCare is burdening the US economy with – in direct contradiction to Obama’s incredibly deceitful promise that “your taxes won’t go up one dime.”

These taxes include:

  1. Individual Mandate Excise Tax
  2. Employer Mandate Tax
  3. Surtax on Investment Income
  4. Excise Tax on Comprehensive Health Insurance Plans
  5. Hike in Medicare Payroll Tax
  6. Medicine Cabinet Tax
  7. HSA Withdrawal Tax Hike
  8. Flexible Spending Account Cap – aka“Special Needs Kids Tax”
  9. Tax on Medical Device Manufacturers
  10. Raise “Haircut” for Medical Itemized Deduction from 7.5% to 10% of AGI
  11. Tax on Indoor Tanning Services
  12. Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D
  13. Blue Cross/Blue Shield Tax Hike
  14. Excise Tax on Charitable Hospitals
  15. Tax on Innovator Drug Companies
  16. Tax on Health Insurers
  17. $500,000 Annual Executive Compensation Limit for Health Insurance Executives
  18. Employer Reporting of Insurance on W-2
  19. Corporate 1099-MISC Information Reporting
  20. “Black liquor” tax hike
  21. Codification of the “economic substance doctrine”

And new studies are demonstrating that ObamaCare is a job murderer:

Congressional Budget Office (CBO) Director Douglas Elmendorf recently spoke at the University of Southern California about the economic impact of Obamacare. He predicts that Obamacare will further depress the nation’s employment picture.

CBO’s analysis of Obamacare predicts that it will reduce the amount of labor being used in the economy by roughly half a percent. Elmendorf states that this impact will be small, but in reality the impact is small only in relative terms. For instance, a half-percent loss in jobs in the American economy today would translate into about 750,000 additional Americans losing work.

And the NFIB estimate is even more dismal:

Just as serious for the economy is the fact that Obamacare will cause significant job losses for the U.S. economy. A study by the National Federation of Independent Businesses (NFIB) found that the employer mandate  could lead to the elimination of 1.6 million jobs between 2009 and 2014, with 66 percent of those coming from small businesses.

And the Democrats loaded up ObamaCare with so many faulty assumptions that the actual numbers of jobs destroyed will undoubtedly be worse.

Democrats played all kinds of gimmicks to get a CBO score that created the illusion that ObamaCare will reduce the deficit.  Because Democrats in office agree with fellow liberal Bill Maher’s take on the American people:

“Or take the health care debate we’re presently having: members of Congress have recessed now so they can go home and “listen to their constituents.” An urge they should resist because their constituents don’t know anything.”

But even “stupid” people are smart enough to know that claiming that ObamaCare will ADD 35 million people to the health care rolls and actually cost LESS MONEY is itself a stupid claim.  They may not understand just how despicably deceitful Democrats were in manufacturing the numbers to get the CBO score (such as taxing ten years and only giving benefits for 6 years; such as double counting savings from revenue sources such as Medicare and Social Security; such as imposing all kinds of taxes that nobody knew about when this monstrosity was passed; omitting the so-called “doctor fix”, etc.), but they know something is very wrong.

Most Americans also know what the overwhelming majority of doctors know:

Nearly two-thirds of U.S. doctors surveyed fear healthcare reform could worsen care for patients, by flooding their offices and hurting income, according to a Thomson Reuters survey released Tuesday.

The survey of more than 2,900 doctors found many predict the legislation will force them to work harder for less money.

“When asked about the quality of healthcare in the U.S. over the next five years, 65 percent of the doctors believed it would deteriorate with only 18 percent predicting it would improve,” Thomson Reuters, parent company of Reuters, said in a statement.

The worm is indeed beginning to turn on ObamaCare, indeed.

And maybe the worm is beginning to turn inside Obama’s scrawny gut, too.

Latest ObamaCare ‘Oopsie': HealthCare Destruction Act Already Killing People

December 16, 2010

It’s too expensive…so we’re going to let you die.” – Robert Reich, lifelong Democrat “expert”

A program that saves young people produces more welfare than one that saves old people” – Obama Regulatory Czar Cass Sunstein

At least we can let doctors know — and your mom know — that you know what, maybe this isn’t going to help. Maybe you’re better off, uhh, not having the surgery, but, uhh, taking the painkiller.” – The Hussein himself, informing a woman that it’s basically time to let her mother die.

ObamaCare Factoid: Access To Health Care Doesn’t Mean Squat When Hospitals, Doctors And Pharmacists Bail” – Title of article by Michael Eden now factually demonstrated to have been completely right.

Before I provide the article of the day, allow me to show you some things that I posted/wrote nearly a year ago:

This is nothing compared to what might happen under Democratic health overhaul plans, which would slash Medicare spending by nearly $500 billion over 10 years. As Medicare actuaries recently pointed out in understated fashion, such cuts “may be unrealistic.” But, if Congress actually carried them out, about one in five hospitals, nursing homes and home care agencies could lose money, they warned in their report. As a result, such providers could drop Medicare, leaving seniors with less access.

[…]

Don’t think for a second that this isn’t directly related to the disaster known as ObamaCare.  Democrats are gutting Medicare reimbursements and blocking the essential “doctor fix” from their bill to create the contrived and bogus illusion that their boondoggle will provide “deficit neutrality.”  They are playing all kinds of games and gimmicks, such as taxing for ten years and only providing benefits for five, to support that illusion. It will fail, and a lot of people will die.

[…]

And so, what do you think will happen when Democrats cut the reimbursement rates?  People who have commons sense know: hospitals and doctors will begin to see fewer and fewer Medicare patients, as a matter of simple economic necessity.   That isn’t a “reform,” but a disaster.

And this stuff is why the dean of the Harvard Medical School gave ObamaCare a failing grade.  It’s why the California Medical Association recently came out strongly against the bill.  It’s why more and more state governors – Democrats as well as Republicans – are beginning to scream that ObamaCare merely turns Medicaid into a giant deficit-creating unfunded mandate on the states (again, to create the illusion of being “deficit neutral”).

And, now, without further delay, the article of the day’s latest demonstration that the Democrat Party is the political arm of the devil and Barack Obama is leading America into ruin not seen since the last time socialism devastated Europe when our grandparents were young kids…

It is somehow ironically fitting that this destruction of our health care system would be described in Obama’s hometown.

Medicaid cuts: teeth pulled, transplant called off
By The Associated Press
Posted Dec 15, 2010

CHICAGO —

In Illinois, a pharmacist closes his business because of late Medicaid payments. In Arizona, a young father’s liver transplant is canceled because Medicaid suddenly won’t pay for it. In California, dentists pull teeth that could be saved because Medicaid doesn’t pay for root canals.

Across the country, state lawmakers have taken harsh actions to try to rein in the budget-busting costs of the health care program that serves 58 million poor and disabled Americans. Some states have cut payments to doctors, paid bills late and trimmed benefits such as insulin pumps, obesity surgery and hospice care.

Lawmakers are bracing for more work when they reconvene in January. Some states face multibillion-dollar deficits. Federal stimulus money for Medicaid is soon to evaporate. And Medicaid enrollment has never been higher because of job losses.

In the view of some lawmakers, Medicaid has become a monster, and it’s eating the budget. In Illinois, Medicaid sucks up more money than elementary, secondary and higher education combined.

“Medicaid is such a large, complicated part of our budget problem, that to get our hands around it is very difficult. It’s that big. It’s that bad,” said Illinois Sen. Dale Righter, a Republican and co-chairman of a bipartisan panel to reform Medicaid in Illinois, where nearly 30 percent of total spending goes to the program.

Medicaid costs are shared by the federal and state governments. It’s not just the poor and disabled who benefit. Wealthier people do, too, such as when middle-class families with elderly parents in nursing homes are relieved of financial pressure after Medicaid starts picking up the bills.

Contrary to stereotype, it’s the elderly and disabled who cost nearly 70 cents of every Medicaid dollar, not the single mother and her children.

In California, Medicaid no longer pays for many adult dental services. But it still pays for extractions, that is, tooth-pulling. The unintended consequence: Medicaid patients tell dentists to pull teeth that could be saved.

“The roots are fine. The tooth could be saved with a root canal,” said Dr. Nagaraj Murthy, who practices in Compton, Calif. “I had a patient yesterday. I said we could do a root canal. He said, ‘No, it’s hurting. Go ahead and pull it. I don’t have the money.”’

Murthy recently pulled an elderly woman’s last tooth, but Medicaid no longer pays for dentures.

“Elderly patients suffer the most,” Murthy said. “They’re walking around with no teeth.”

States can decide which optional services Medicaid covers, and dental care is among cutbacks in some places. Last year’s economic stimulus package increased the federal share of Medicaid money temporarily. But that money runs out at the end of June, when the federal government will go back to paying half the costs rather than 60 to 70 percent. So more cuts could be ahead.

During the Great Recession, millions of people relied on the Medicaid safety net. Between 2007 and 2009, the number of uninsured Americans grew by more than 5 million as workers lost jobs with employer-based insurance. Another 7 million signed up for Medicaid.

Just when caseloads hit their highest point, the nation’s new health care law required states not to change the rules on who’s eligible for Medicaid. That means states can’t roll up the welcome mat by tightening Medicaid’s income requirements.

So states have resorted to a variety of painful options.

In Arizona, lawmakers stopped paying for some kinds of transplants, including livers for people with hepatitis C. When the cuts took effect Oct. 1, Medicaid patient Francisco Felix, who needs a liver, suddenly had to raise $500,000 to get a transplant.

The 32-year-old’s case took a dramatic turn in November when a friend’s wife died, and her liver became available. Felix was prepped for surgery in hopes financial donations would come in. When the money didn’t materialize, the liver went to someone else, and Felix went home. His doctor told him he has a year before he’ll be too sick for a transplant.

“They are taking away his opportunity to live,” said his wife, Flor Felix. “It’s impossible for us or any family to get that much money.” The family is collecting donations through a website and plans a yard sale this weekend, she said.

The choices are difficult for states that have already cut payments to doctors and hospitals to the bone.

“If we don’t see an economic recovery where state revenues rebound, they’re really going to be very strained on how they can make ends meet,” said Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured.

States may consider lowering payment rates to nursing homes or home health agencies or further reducing payments to doctors, Rowland said.

“The problem here is the program is pretty lean, and payment rates are pretty low,” she said. Patients can’t find care because fewer doctors accept the low payments.

Prescription drug coverage in states is an optional benefit, another possible place to cut, Rowland said. “But if you cut back on people’s psychotropic drugs, is that penny-wise and pound-foolish? Do they end up in institutions where Medicaid pays more for their care?”

In Illinois, late payments became the rule.

Tom Miller closed his pharmacy in rural southern Illinois this summer and is going through bankruptcy, largely because the state was chronically late making Medicaid payments to him. Most of his former customers are in the program.

With the state sometimes months behind in payments, he couldn’t pay his suppliers. Five workers lost their jobs when his business closed.

“You can only fight it for so long,” said Miller, 54. He now works as a pharmacist in a hospital. He misses his old clients, the families he grew to know.

“I was in my third generation. I’ve had moms who had kids. I saw the kids raised, and they had their own children,” he said. As a neighborhood pharmacist, “you’re their friend. You’re family.”

The death panels are right around the corner.  To the extent that they’re not already here right now, as with the case of Francisco Felix, who is being denied life by being denied a liver by Medicaid.

Francisco Felix never stood in front of a death panel; but bureaucrats don’t need you wasting their time with bothersome questions when they decide to let you die a slow and agonizing death due to medical neglect (or maybe you’re fortunate enough to get that pain pill from Obama?).

We told you so.  We told you soWe told you soWE TOLD YOU SO.

As one speaking from the lofty vantage point of one having a one-thousand percent batting average, let me forewarn you Democrats yet again: Someday, when you’re burning in hell for all eternity for your direct participation in the murder of 52 million innocent human beings in America alone through abortion, realize that God is going to turn up the fires a few billion extra degrees for the coming horror that is going to come to this country as a result of your ObamaCare disaster.

Obama Takeover Of Student Loans Means 2,500 Layoffs For Sallie Mae

April 1, 2010

What does ObamaCare mean?  It means a 29% slash in the workforce for student loan service provider Sallie Mae.  Remember in this insane world of Democrat rule that the government takeover of student loans was part of ObamaCare, whereas reimbursing doctors for Medicare was not.

Updated March 31, 2010
Sallie Mae Blames 2,500 Layoffs on Obama’s Student Loan Overhaul
By Kelly Chernenkoff

Powerhouse student loan provider Sallie Mae says layoffs are imminent as a result of President Obama’s new student loan overhaul.

“This legislation will force Sallie Mae to reduce our 8,600-person workforce by 2,500,” Conwey Casillas, Vice President of Sallie Mae Public Affairs, said in a statement to Fox News.

Obama was at Northern Virginia Community College in Alexandria on Tuesday to sign the student loan changes into law. The new bill includes a provision for the government to begin directly lending to students, bypassing financial institutions like Sallie May that traditionally have provided the loans. Obama said that such institutions have soaked up billions in subsidies.

“Now, it probably won’t surprise you to learn that the big banks and financial institutions hired a army of lobbyists to protect the status quo,” Obama said. “In fact, Sallie Mae, America’s biggest student lender, spent more than $3 million on lobbying last year alone.”

Indeed, Sallie Mae has been outspoken in its opposition to the plan, calling it a “government takeover” just last month.

“The student loan provisions buried in the health care legislation intentionally eliminate valuable default prevention services and private sector jobs at a time when our country can least afford to lose them,” Casillas told Fox News.

Sallie Mae was trying to garner support for an alternative, which the company said was roundly rejected.

“We are profoundly disappointed that a reform plan that would have achieved more savings for students was ignored and now thousands of student loan experts will unnecessarily lose their jobs,” Casillas said.

But Obama says he’s merely looking out for those in need.

“I didn’t stand with the banks and the financial industries in this fight. That’s not why I came to Washington. And neither did any of the members of Congress who are here today,” he said. “We stood with you. We stood with America’s students. And together, we finally won that battle.”

Obama said the move will save billions, enabling his administration to use the money to improve the quality and affordability of higher education.

Sallie Mae hasn’t said exactly when jobs will start getting slashed, but the cuts “will start soon,” Casillas said.

Obama did a good job demonizing the student loan service providers (after all, demonizing is pretty much the only thing he does well), but the reality is as usual quite different than the Obama demagoguery:

From the Wall Street Journal in an article entitled, “The Quietest Trillion:
Congratulations. You’re about to own $100 billion a year in student loans
“:

It’s not a popular idea on campus. Loans directly from the feds have been available for decades, but the government’s poor customer service has resulted in most borrowers choosing private lenders. This week three dozen college administrators, representing schools from Notre Dame to Nevada-Reno, signed a letter urging a longer transition period to this “public option.” The fear is that the bureaucrats will not be able to pull off a takeover in just eight months. “Any delay in getting funds to schools on behalf of students will result in our needing to find resources at a time when credit is difficult to obtain,” warns the letter.

Tough luck for the Irish. Democrats have already greased this fall’s budget reconciliation to pass all of this on a mere majority vote. They are helped by rigged government accounting that disguises the cost of making below-market loans to unemployed 18-year-olds. Democrats have claimed their plan “saves” $87 billion in mandatory spending by cutting out the private middlemen, and the Congressional Budget Office has dutifully “scored” $87 billion in mandatory “savings” (or a net of $80 billion after subtracting administrative costs).

But in a remarkable letter to Senator Judd Gregg, CBO Director Douglas Elmendorf admits that government accounting is bogus. He writes that the statutory methodology “does not include the cost to the government stemming from the risk that the cash flows may be less than the amount projected (that is, that defaults could be higher than projected).” Mr. Elmendorf further notes that the government’s accounting system is specifically skewed to make direct loans from the government appear to cost much less than guaranteed loans made by private lenders. He says the real “savings” are only $47 billion, even though, in a deception that would be criminal fraud if it weren’t mandated by Congress, the official estimate remains at $80 billion.

Even the unofficial number is dubious. The government has been claiming lower default rates than private lenders, but most government loans have been to students at four-year colleges. The private lenders have serviced a higher percentage of students at community and two-year colleges, where defaults are more common regardless of lender.

If the feds are now making and owning all such loans, expect default rates to soar. When the government hires contractors to collect on its loans, it pays them for simply calling the borrower, regardless of the result. Private lenders, on the other hand, make money from a performing loan and have a greater incentive to do careful underwriting and aggressive collection.

The government will nonetheless start spending these illusory “savings” immediately, and this spending is certain to top official estimates. The Obama plan also adds a CBO-estimated $46 billion in new spending over 10 years to enlarge Pell grants. Ominously for the federal fisc, starting in 2011 these grants will automatically rise each year by the consumer price index plus 1%. Not that students will actually benefit from this subsidy explosion. Colleges have reliably raised prices to capture every federal dollar earmaked for education financing.

Rep. John Kline (R., Minn.) decided the cost estimate for Pell grants was too low, so he asked CBO to take a second look. Along comes another enlightening letter from Mr. Elmendorf. This week he wrote that Mr. Kline is correct—it looks like they will cost another $11 billion. Unfortunately, the earlier estimate must remain the official score under budgeting rules, even though the official scorekeeper says it is wrong.

You start to see why the student loan takeover was part of ObamaCare, but the doctor fix was not: pure deceitful political cynicism of the very worst kind.  ObamaCare forced the CBO to assume the deception that doctor’s Medicare reimbursements would be slashed by 21% so they could deceitfully claim that “saving” for ObamaCare.  Even though Democrats will add those reimbursements back in another bill that will cost a rock bottom minimum of $200 billion.  Meanwhile, they decide that student loans are very much a part of ObamaCare so that they could raid the profits – after, of course, dramatically misrepresenting what those profits actually were.

In one fell swoop, ObamaCare destroys jobs, undermines the student loan system, AND ruins our health care system.

Nice trifecta.  If you’re an enemy of America.

Democrats ‘Fix’ ObamaCare Numbers By Leaving Out TRILLIONS In Additional Spending

March 20, 2010

This is Bernie Madoff Accounting. And the same fate that befell Madoff’s investors will one day befall the American people. The Democrats only count the costs they want to count, and simply pretend the rest don’t exist, or assure us that they somehow shouldn’t be counted.  Positive numbers from unrealistic expectations show up on one side of the ledger, while negative numbers representing massive government and personal spending are ignored.

This article will demonstrate the REAL cost of ObamaCare.  And what we will find is that the monster it creates will sneeze chunks bigger than the $940 billion that the CBO score pitches.

It’s not like the CBO isn’t aware that it is being played like a fiddle.  They can only analyze legislation as it is presented – and this legislation is being presented by partisan Democrat ideologues.  The CBO has pointed out that the Democrats have a pattern of double-counting the same dollars.  But they can’t do anything about it: if the Democrats tell them to double-count, they dutifully double-count.  Paul Ryan points out that Medicare cuts are double counted, Social Security taxes get double counted, increased CLASS Act premiums get double counted, to the tune of hundreds of billions of dollars.  Other sources of revenue – such as the not-to-be-implemented “Cadillac Tax” which would itself count for 25% of deficit reduction in the CBO score – will likely NEVER see the light of day. The CBO numbers become a shell game.

You can understand why the Democrats would want to run away from details of the CBO score. If the facts get in the way of their theory, so much the worse for the facts.

Then there’s the likelihood that ObamaCare will destroy as many as 700,000 jobs.  What’s THAT going to cost America?  Would THAT be “deficit neutral”?  And how much will it cost Americans as increased government taxes on private health insurance companies, pharmaceutical companies, and medical device and supply companies, pass the burden of those taxes onto us? Will THAT be “deficit neutral” for American families?

But let’s stay out of the budgetary weeds, and remain on what is clear and straightforward.

Let us first begin with the “Doctor fix,” which is a $208 billion spending measure to restore the reimbursement rates for doctors who treat Medicare patients.  If it isn’t passed, the current rate – which already leaves hospitals and many doctors losing money to treat Medicare patients – would be slashed by an additional 21 percent.  It simply has to be fixed, or doctors and hospitals will quit treating Medicare patients.

But if the Democrats strip that part out of their health care bill, they can claim that 21 percent reduction in doctors’ reimbursements as “savings.”  Even if they intend to fix the reimbursement rate, such that those “saving” never materialize.  And that little bit of fiscal circular reasoning allows them to claim that their bill is “deficit neutral.”

Medicare fix would push health care into the red
Rollback of Medicare cuts to doctors, if added to health care bill, push it into the red
On Friday March 19, 2010, 6:33 pm EDT

WASHINGTON (AP) — Congressional budget scorekeepers say a Medicare fix that Democrats included in earlier versions of their health care bill would push it into the red.

The Congressional Budget Office said Friday that rolling back a programmed cut in Medicare fees to doctors would cost $208 billion over 10 years. If added back to the health care overhaul bill, it would wipe out all the deficit reduction, leaving the legislation $59 billion in the red.

The so-called doc fix was part of the original House bill. Because of its high cost, Democrats decided to pursue it separately. Republicans say the cost should not be ignored. Congress has usually waived the cuts to doctors year by year.

What this basically means is that $940 billion number in the CBO report that the Democrats are cheering over is entirely subjective.  It would have been a lot higher if they had included the stuff they should have included.  And they didn’t include these things simply because it would have made their number look bad.  It’s Alice in Wonderland accounting.

So let’s look at the truth: Democrats are claiming that their “$940 billion bill” would reduce the ten-year deficit by $138 billion.  But in reality, the doctor fix which SHOULD be in the bill would INCREASE THE DEFICIT by $59 billion.  That’s a swing of 197 billion dollars, which is one hell of a swing indeed.

But that certainly isn’t the only budget shenanigan that Democrats have used to monkey the numbers to appear to look like what they want:

For a variety of reasons, this tally doesn’t remotely reflect the bill’s real ten-year costs.  First, it includes 2010 as the initial year.  As most people are well aware, 2010 has now been underway for some time.  Therefore, the CBO would normally count 2011 as the first year of its analysis, just as it counted 2010 as the first year when analyzing the initial House health bill in the middle of 2009.  But under strict instructions from Democratic leaders, and over strong objections from Republicans, the CBO dutifully scored 2010 as the first year of the latest version of Obamacare.  If the clock were started in 2011, the first full year that the bill could possibly be in effect, the CBO says that the bill’s ten-year costs would be $1.2 trillion.

This $260 billion ($1.2 trillion minus $940 billion) deficit created by backdating the bill to 2010 instead of starting in 2011 when they should (until Democrats instructed them to do differently) has nothing to do with the deficit created by the doctor fix.  So they compound: $260 billion plus $197 billion equals $457 billion.

So we’re talking about a real and obvious deficit of nearly half a trillion dollars.  But that’s nowhere near as bad as it will really be.

You see, even starting the CBO ten-year cycle in 2011 is nothing more than a gimmick.  That’s because the plan begins taxing in 2011, but benefits (actual spending outlays) don’t begin to be funded until 2014.  The Democrats tax for ten years, but only spend for six.  Why did they do that?  Because that is the only way they can get the illusion of a “deficit neutral” figure.  As Heritage points out:

[S]ome scrupulous tactics were used to calculate the 10-year cost projections. The key provisions in the health care bill don’t go into effect until 2014. Meanwhile Medicare cuts and tax increases would go into effect immediately. So the money raised through taxes and spending cuts in the first four years of the 10-year projection would offset the expenditures in the subsequent six years. Consequently, when the true ten year window (2014-2023) is examined, and the costs of the “Doc Fix” are taken into account, the cost rises to $2.3 trillion.

This – and the shenanigans Democrats employ with the CLASS Act – is why Heritage rightly calculates the REAL cost of ObamaCare as likely far higher than $2.5 TRILLION.

These are obvious and transparent gimmicks.  But the mainstream media is largely simply ignoring it.  They are liberal in their ideology and “gatekeepers” in their philosophy of journalism.  The result is that they don’t tell you anything that they don’t want you to know.

But even that – as utterly terrible as it is – is STILL not anywhere close to the REAL cost of this disastrous health care bill.  Consider the most sobering Democrat omission of all.  From Cato:

Another gimmick pushes much of the legislation’s costs off the federal budget and onto the private sector by requiring individuals and employers to purchase health insurance.  When the bills force somebody to pay $10,000 to the government, the Congressional Budget Office treats that as a tax.  When the government then hands that $10,000 to private insurers, the CBO counts that as government spending.  But when the bills achieve the exact same outcome by forcing somebody to pay $10,000 directly to a private insurance company, it appears nowhere in the official CBO cost estimates — neither as federal revenues nor federal spending.  That’s a sharp departure from how the CBO treated similar mandates in the Clinton health plan.  And it hides maybe 60 percent of the legislation’s total costs.  When I correct for that gimmick, it brings total costs to roughly $2.5 trillion (i.e., $1 trillion/0.4).

Here’s where things get really ugly.  TPMDC’s Brian Beutler calls “the” $2.5-trillion cost estimate a “doozy” of a “hysterical Republican whopper.”  Not only is he incorrect, he doesn’t seem to realize that Gregg and I are correcting for different budget gimmicks; it’s just a coincidence that we happened to reach the same number.

When we correct for both gimmicks, counting both on- and off-budget costs over the first 10 years of implementation, the total cost of ObamaCare reaches — I’m so sorry about this — $6.25 trillion.  That’s not a precise estimate.  It’s just far closer to the truth than President Obama and congressional Democrats want the debate to be.

For the record, it was this subsidizing of the private health insurance companies that Dennis Kucinich was talking about before he backstabbed his own principles and voted for the bill anyway.

In 1994, the universal health care plan proposed by President Clinton included a mandate requiring all individuals to purchase health insurance. The Congressional Budget Office studied the issue and concluded that the United States had never in all its history mandated that individuals purchase any good or service.  The CBO stated:

A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy any good or service as a condition of lawful residence in the United States. An individual mandate would have two features that, in combination, would make it unique. First, it would impose a duty on individuals as members of society. Second, it would require people to purchase a specific service that would be heavily regulated by the federal government.”

But it is going to start doing so now, under Obama and the Democrats in Congress.  They could care less about the Constitution, or about the consequences of radically expanding already massive government bureaucracies.

Obama is going to force you to purchase insurance, but the CBO won’t count the cost of one penny of that spending, now or ever.  If you send money to the government that the government requires you to send them, that’s a tax.  If the government spends money, that counts as spending.  But if the government forces you to send money to a private health insurance company, that isn’t counted.  It amounts to a tax that isn’t “deemed” (there’s a good word these days) a tax.

Thus the REAL ten-year cost of ObamaCare won’t be $940 billion.  It won’t even be $2.5 trillion.  It will be SIX TRILLION DOLLARS.  And counting, and counting, and counting, and counting.

Democrats’ Bizarro World: Doctor Reimbursements NOT Part Of Health Care, But Takeover Of Student Loans IS

March 13, 2010

Isn’t it amazing that, as far as Democrats are concerned in their way-too-finite wisdom, doctor’s Medicare reimbursements have absolutely nothing to do with health care, but a government student loan takeover suddenly has everything to do with health care?

The $300 billion “doctor fix” has nothing to do with health care because it would explode the totally bogus myth that the Democrats’ health plan is somehow “deficit neutral.”  But now the Democrats are throwing in their student loan takeover to try to sweeten the pot for hesitant Democrats in the House.

Mitch McConnell put what is going on into proper perspective:

“It’s a very bad idea.  We now have the government running banks, insurance companies, car companies, and now [the Democrats] want to take over the student loan business.  I’m not sure the public thinks the current debate is about that issue, and it would show again the lengths they are willing to go to have the government expand its tentacles into absolutely everything.”

So why don’t we go ahead and rename the Democrats “health care” boondoggle for what it really is: the Government Tentacle Expansion Act.

Bill Kristol had this to say when asked about this latest new wrinkle in ObamaCare:

BRETT BAIER: Bill, now Speaker Pelosi has talked about putting in student loans, a change to the student loan program in the vote for health care reform.

What about that? This is the student loan legislation that would end private lender’s involvement in the original student loans and the Department of Education would essentially take over?

BILL KRISTOL: Yes, the government would be the direct loaner to the students. Well that passed the House by a larger margin last year. So they are adding something that they think is more attractive to try to bring home few extra members to the bill.

It shows how unpopular this bill is. It is jaw dropping to step back from the day-to-day thing. A year into president’s top agenda health care is the Democrats favorite issue. They have had 30 point margins on it in polls over the Republicans for the last 15 years basically.

And as this debate has gone along this bill has become so unpopular and toxic that they now can’t pass it through a normal conference committee. They can’t have a normal situation where each house passes its own bill and get together and have a compromise. They have to pass the Senate bill or nothing because they’re terrified to go to conference.

They are now terrified to let the members go home for Easter recess before a vote, so they are going to — the president is delaying his trip so they can jam the vote in at the end of next week, they hope by one or two vote margin. It’s really stunning.

Bottom line: the people – who are now opposed to ObamaCare by a 3-1 margin – don’t want the government to take over our health care system.  And the Democrat leadership is literally afraid to let the Congress go home for Easter recess and hear what their constituents have to say before a vote, lest they respect the will of the people and vote against this monstrosity.  And so, as Obama postpones his foreign trip, the leadership is trying to overcome opposition to ObamaCare by offering as an inducement yet ANOTHER Democrat big government takeover, this time of the student loan system.

President Obama’s approval has sank to an all time low of 46% in the Gallup poll as he has determined to impose his health care boondoggle on the American people who do not want itThe Hill points out that this “demonstrates that the healthcare debate has taken a toll on Obama’s approval numbers.”

A new poll released by the Associated Press finds that the American people overwhelmingly want the Republicans involved with any health care overhaul, rather than having an ideological Democrat boondoggle rammed down their throats:

More than four in five Americans say it’s important that any health care plan have support from both parties. And 68 percent say the president and congressional Democrats should keep trying to cut a deal with Republicans rather than pass a bill with no GOP support.

And only 27 percent of voters want to see ObamaCare rammed down the nation’s collective throat.

And as for what the Democrats are trying to impose:

Fifty-seven percent (57%) of voters say the health care reform plan now working its way through Congress will hurt the U.S. economy.

A new Rasmussen Reports national telephone survey finds that just 25% think the plan will help the economy. But only seven percent (7%) say it will have no impact. Twelve percent (12%) aren’t sure.

Two-out-of-three voters (66%) also believe the health care plan proposed by President Obama and congressional Democrats is likely to increase the federal deficit. That’s up six points from late November and comparable to findings just after the contentious August congressional recess. Ten percent (10%) say the plan is more likely to reduce the deficit and 14% say it will have no impact on the deficit.

Underlying this concern is a lack of trust in the government numbers. Eighty-one percent (81%) believe it is at least somewhat likely that the health care reform plan will cost more than official estimates. That number includes 66% who say it is very likely that the official projections understate the true cost of the plan.

Just 10% have confidence in the official estimates and say the actual costs are unlikely to be higher.

Seventy-eight percent (78%) also believe it is at least somewhat likely that taxes will have to be raised on the middle class to cover the cost of health care reform. This includes 65% who say middle-class tax hikes are very likely, a six-point increase from late November.

And yes, ObamaCare will raise taxes.  In fact, for every one family who gets a subsidy to pay for the Democrats’ health care plan – which will cost $2.5 trillion – three middle class families will be taxed more to provide that subsidy.

Meanwhile, Barry Hussein has just broken his own record for the worst deficit in human history.

A few quotations from Ronald Reagan are in order here:

  • “Government is not a solution to our problem, government is the problem.”
  • “The federal government has taken too much tax money from the people, too much authority from the states, and too much liberty with the Constitution.”
  • “Nations crumble from within when the citizenry asks of government those things which the citizenry might better provide for itself.”
  • “As government expands, liberty contracts.”
  • “Government is like a baby. An alimentary canal with a big appetite at one end and no sense of responsibility at the other.”
  • “No government ever voluntarily reduces itself in size.”
  • “Are you entitled to the fruits of your labor or does government have some presumptive right to spend and spend and spend?”
  • “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

The American people have overwhelmingly shouted – and there have been three big statewide elections in states that voted big for Obama to prove that the polls are correct – that they don’t want a government takeover.  And how do Democrats respond?  By offering another government takeover (of the student loan system) as an inducement for Democrats to vote for the government takeover of health care.

Mayo Clinic Realizes ObamaCare A Total Disaster, Stops Accepting Medicare

January 1, 2010

What we have here is a very cute and clever title for a very disastrous development.

Mayo Says: Hold The Medicare
By Ed Carson
Thu., Dec. 31, ’09

The Mayo Clinic will stop accepting Medicare patients at one of its primary care clinics in Arizona. Why? The government doesn’t pay enough:

More than 3,000 patients eligible for Medicare, the government’s largest health-insurance program, will be forced to pay cash if they want to continue seeing their doctors at a Mayo family clinic in Glendale, northwest of Phoenix, said Michael Yardley, a Mayo spokesman. The decision, which Yardley called a two-year pilot project, won’t affect other Mayo facilities in Arizona, Florida and Minnesota.

Obama in June cited the nonprofit Rochester, Minnesota-based Mayo Clinic and the Cleveland Clinic in Ohio for offering “the highest quality care at costs well below the national norm.” Mayo’s move to drop Medicare patients may be copied by family doctors, some of whom have stopped accepting new patients from the program, said Lori Heim, president of the American Academy of Family Physicians.

This is nothing compared to what might happen under Democratic health overhaul plans, which would slash Medicare spending by nearly $500 billion over 10 years. As Medicare actuaries recently pointed out in understated fashion, such cuts “may be unrealistic.” But, if Congress actually carried them out, about one in five hospitals, nursing homes and home care agencies could lose money, they warned in their report.

As a result, such providers could drop Medicare, leaving seniors with less access.

This is now only going on at one Mayo clinic – but it is going to spread.

Don’t think for a second that this isn’t directly related to the disaster known as ObamaCare.  Democrats are gutting Medicare reimbursements and blocking the essential “doctor fix” from their bill to create the contrived and bogus illusion that their boondoggle will provide “deficit neutrality.”  They are playing all kinds of games and gimmicks, such as taxing for ten years and only providing benefits for five, to support that illusion.

It will fail, and a lot of people will die.

Alan B. Miller, an expert in the field of health care, wrote:

Medicare reimbursements to hospitals fail to cover the actual cost of providing services. The Medicare Payment Advisory Commission (MedPAC), an independent congressional advisory agency, says hospitals received only 94.1 cents for every dollar they spent treating Medicare patients in 2007. MedPAC projects that number to decline to 93.1 cents per dollar spent in 2009, for an operating shortfall of 7%. Medicare works because hospitals subsidize the care they provide with revenue received from patients who have commercial insurance. Without that revenue, hospitals could not afford to care for those covered by Medicare. In effect, everyone with insurance is subsidizing the Medicare shortfall, which is growing larger every year.

As much as Obama and the Democrats have demonized private insurance (before co-opting them in the current version of ObamaCare – what is it, ObamaCare version 6.0 by now?), the higher prices paid by private insurance have been all that has allowed doctors and hospitals to continue to accept Medicare and Medicaid at a loss.

And so, what do you think will happen when Democrats cut the reimbursement rates?  People who have commons sense know: hospitals and doctors will begin to see fewer and fewer Medicare patients, as a matter of simple economic necessity.

That isn’t a “reform,” but a disaster.

And this stuff is why the dean of the Harvard Medical School gave ObamaCare a failing grade.  It’s why the California Medical Association recently came out strongly against the bill.  It’s why more and more state governors – Democrats as well as Republicans – are beginning to scream that ObamaCare merely turns Medicaid into a giant deficit-creating unfunded mandate on the states (again, to create the illusion of being “deficit neutral”).

Enough with illusions.  This bill is absolutely terrible.  It’s more than 2,000 pages long, nobody understands it, and it has changed again and again, yet actually seems to be getting worse and worse.

CBO Says Real 10-Year Cost of Senate ObamaCare Bill Still $2.5 Trillion

December 21, 2009

The American people will pay an additional one trillion dollars in taxes over ten years than they otherwise would have paid to finance the Democrats’ takeover of health care.  That is a brutal fact.

When the Democrats say their bill is “deficit neutral” what they mean is that they made drastic cuts in the Medicare budget and drastic increases in our taxes in order to create the illusion that it was deficit neutral.

Here’s some more brutal facts that your mainstream media will not tell you about regarding health care.

CBO: Real 10-Year Cost of Senate Bill Still $2.5 Trillion

With Obamacare, you get the good, the bad, and the ugly — except for the first part.

The Congressional Budget Office’s score is in for the final Senate health bill, and it’s amazing how little Americans would get for so much.

The Democrats are irresponsibly and disingenuously claiming that the bill would cost $871 billion over 10 years. But that’s not what the CBO says. Rather, the CBO says that $871 billion would be the costs from 2010 to 2019 for expansions in insurance coverage alone. But less than 2 percent of those “10-year costs” would kick in before the fifth year of that span. In its real first 10 years (2014 to 2023), the CBO says that the bill would cost $1.8 trillion — for insurance coverage expansions alone. Other parts of the bill would cost approximately $700 billion more, bringing the bill’s full 10-year tab to approximately $2.5 trillion — according to the CBO.

In those real first 10 years (2014 to 2023), Americans would have to pay over $1 trillion in additional taxes, over $1 trillion would be siphoned out of Medicare (over $200 billion out of Medicare Advantage alone) and spent on Obamacare, and deficits would rise by over $200 billion
. They would rise, that is, unless Congress follows through on the bill’s pledge to cut doctors’ payments under Medicare by 21 percent next year and never raise them back up — which would reduce doctors’ enthusiasm for seeing Medicare patients dramatically.

And what would Americans get in return for this staggering sum? Well, the CBO says that health care premiums would rise, and the Chief Actuary at the Centers for Medicare and Medicaid Services says that the percentage of the Gross Domestic Product spent on health care would rise from 17 percent today to 21 percent by the end of 2019Nationwide health care costs would be $234 billion higher than under current law. How’s that for “reform”?

Even MoveOn.org says that the bill is “a massive giveaway” to private insurance companies. The CBO estimates that, from 2015-25, private insurers would receive $1.0 trillion in subsidies from the American taxpayer — the insurers’ apparent price for giving up their freedom and being controlled by the government. Congress would mandate that Americans buy the insurers’ product and would redirect massive sums of taxpayer money to make that mandate more feasible. So, if insurance companies are your idea of a worthy object of philanthropy, then Obamacare is for you.

And this is the bill that Ben Nelson has decided to support?

One hopes that Nebraska voters — and all other voters in other states who have sent Democrats to Washington — are making a list and checking it twice, keeping track of votes on Obamacare.

As Harry Reid keeps senators in session rather than letting them go home to be with their families and celebrate Christmas, it’s important to remember that this bill would not go into effect in any meaningful way until more than an Olympiad from now. Thus, it is the American voters — and not the current Democratic Congress or the current president — who will ultimately decide its fate. Providing reminders to representatives in both chambers of that in the coming days will be crucial to beating back the onslaught of proposed legislation that, even if it passes the Senate, would at least have to passed again by the House and would likely have to go back through both chambers in compromised form.

Posted by Jeffrey H. Anderson on December 19, 2009 07:49 PM | Permalink

There’s a frightening game being played with the truth.  And willingly or not, the CBO is helping the Obama administration lie to the American people.

A big part of the problem is that the CBO has to take Congress’ word for everything in their scoring – and the Congress (especially this Congress) is a bunch of liars.

If Congress has a huge spending bill, and tells the CBO that they will pay for it by picking the right numbers and hitting the mega-jackpot every year for the next 20 years, then the CBO must assume that the bill will be paid for – and thus “deficit neutral” in its scoring.

Maybe I’m not being clear enough.  So I’ll provide another example.  If Congress says that they will pay for their spending bill by summoning a winged fairy who will wave a magic wand and create a trillion dollars from nowhere, the CBO must count that trillion dollars in their scoring toward a “deficit neutral” bill.

Back in July, Obama summoned the director of the CBO, Douglas Elmendorf, to the White House. Republicans were outraged by this unprecedented event.  The Wall Street Journal had an article entitled, “Bullying CBO.”

Some have thought that Elmendorf was in fact intimidated, because their scores suddenly became much friendlier to ObamaCare.  But I personally believe it was simply a matter of the White House learning how to write a bill so that it would appear “deficit neutral” in a CBO score.  Democrats, in other words, learned how to use the right gimmicks to get the right results.

So if Congress says that it will increase taxes by a trillion dollars, then the CBO has to take it as gospel truth in its calculations.  But the fact of the matter is that tax revenues go down dramatically as tax rates go up (and see here also) for the simple reason that more and more people change their behavior and start sheltering their assets.  In the same way, when a bunch of new fees are imposed, people will start buying less and less of what will suddenly become more and more expensive.

The more of your own money you are allowed to keep, the harder you will work, and the more you will risk your money by investing.  The more you are taxed, the more you will adjust your behavior by protecting what you have, and the less you will be willing to take risks for a shrinking reward.

Bottom line: the federal government will collect far less in revenue than it thinks it will.  Revenues are already down dramatically as the White House and congressional Democrats have repeatedly vowed to end the Bush tax cuts (i.e. raise taxes) and increase taxes across the board.

In the same way, if Democrats tell the CBO that they will create savings by cutting the Medicare budget to the tune of half a trillion dollars and apply that “savings” to ObamaCare, then the CBO must assume that that will be the case.

It’s frankly difficult to believe that the Democrats will actually gut Medicare as they are saying they will do.  Will they really take $500 billion from Medicare?  Really?  And utterly outrage seniors who have counted on that benefit for decades?  If they do, they will pay dearly for it in every election until those seniors finally die.  If they don’t, you can add at least half a trillion dollars to what the Democrats say their bill will cost.

The same thing applies to the “doctor fix.”  Democrats will either follow through with their plan to make Medicare so expensive to doctors and hospitals that many medical professionals stop accepting it, or else they won’t.  If they do, the Medicare system will collapse.  If they don’t, then you can add hundreds of billions more to the cost of their health care plan.

The Washington Post put it this way:

A plan to slash more than $500 billion from future Medicare spending — one of the biggest sources of funding for President Obama’s proposed overhaul of the nation’s health-care system — would sharply reduce benefits for some senior citizens and could jeopardize access to care for millions of others, according to a government evaluation released Saturday. The report, requested by House Republicans, found that Medicare cuts contained in the health package approved by the House on Nov. 7 are likely to prove so costly to hospitals and nursing homes that they could stop taking Medicare altogether.”

And to pay for that fiasco, the Democrats are playing games that even liberals recognize are gimmickry and trickery.

As the government increasingly takes over, costs are going to go up (as they always do when government starts administering programs) and quality is going to go down.

The very people people who are going to increase our health care spending by trillions of dollars are preaching fiscal responsibility and the need to reduce our spending even as they do it.

The hypocrisy, stupidity, and lunacy of the government is enough to make one scream.

Mainstream Media Touts $848 Billion Senate Health Bill, Ignores Actual Cost Of At LEAST $2.5 Trillion

November 20, 2009

Democrats have done a good job – along with the loyal participation of a leftwing propaganda machine – of projecting their takeover of the health care system as “only” costing a “mere” $848 billion.

They think the American people are dumb enough to buy their fraud, and maybe they are.

But the actual cost of this program over ten years of its actual implementation will be at least $2.5 trillion.  And that is $107.5 trillion more than we’ve got.

Updated November 19, 2009
Senate Health Bill Price Tag, Rosy Deficit Estimate Assailed as ‘Fantasy’

by FOXNews.com

Senate Majority Leader Harry Reid claims that his health care bill costs about $848 billion in the first 10 years, well under President Obama’s $900 billion target. That’s for 10 years of revenue-gathering, but only six years of service.

Senate Majority Leader Harry Reid claims that his health care bill costs about $848 billion in the first 10 years, well under President Obama’s $900 billion target.

That’s for 10 years of revenue-gathering, but only six years of service, according to the analysis by the Congressional Budget Office.

Adding in expenses beyond the 10-year mark drastically skews the overall cost, making the $848 billion a mere fraction of the long-term price tag of overhauling America’s health care system — and that’s if no changes are made to the legislation during that time.

The additional claim touted by Senate Democrats — that the bill will reduce the deficit by $130 billion over the first 10 years — is also coming under fire as “fantasy.”

Republicans have countered the CBO estimate with a figure of their own: $2.5 trillion, an estimate that comes out of the Senate Budget Committee minority’s analysis of Reid’s plan.

“This is a lousy bill that’s going to cost American taxpayers like mad for the rest of our lives,” Sen. Orrin Hatch, R-Utah, a fierce critic of the health care legislation, told Fox News on Thursday.

Part of the problem with the CBO estimate is that it covers a 10-year period from 2010-2019 — however, the health care reform plan is not fully implemented until 2014. That means the federal government is raking in billions in taxes and savings for the first four years without spending on the new program. The $2.5 trillion estimate is for the 10-year window starting in 2014, after implementation of the program begins.

Under the timetable in the CBO estimate, the government spends $9 billion in the first four years, but $838 billion in the last six when the overhaul goes into full force.

The revenue significantly ramps up in the latter half of the decade to keep pace with spending, but the nearly $100 billion in deficit savings in the first four years is not necessarily in the piggy bank either.

Democrats are holding up estimates that show the second decade of health care reform yields even more deficit reduction.

President Obama said in a statement Wednesday night that the unveiling of the is a “critical milestone” and cited one estimate showing the second 10 years would yield up to $650 billion in deficit reduction.

Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee, cited the same estimate, telling Fox News that Reid’s bill is “going in the right direction” and yields significant savings.

“That to me is the most encouraging part of this,” he said.

Budget analysts say that the early revenue cannot be fenced off, much like Social Security money is spent despite a trust fund for that purpose. The funding gets absorbed into the general federal budget, presumably to go toward reducing the deficit on a yearly basis.

However, this creates the possibility that Congress could spend that money twice, by using the up-front savings as fun money for new projects and then having to pay the bill for health care reform down the road. Holtz-Eakin called this a worst-case scenario.

“The government’s incapable of segregating funds. You can’t put the money in a cigar box and bury it behind the Treasury Department,” said Michael Tanner, senior fellow with the libertarian Cato Institute.

Tanner pointed to two other “gimmicks” that make the price seem smaller than it is.

One deals with the so-called “doctor fix,” which would be an act of Congress to ensure Medicare doctors don’t face steeps cuts in federal reimbursements. This would cost at least $210 billion over 10 years, and it’s a “fix” that Democrats are trying to separate from the health care reform bill
.

That alone erases the $130 billion in deficit savings claimed by the CBO’s latest health care estimate.

Tanner also pointed to the CLASS Act, a long-term care program in the bill that takes in billions in revenue early on but does not pay out in any significant way until the next decade.

“If you use honest accounting … then this bill’s not paid for,” Tanner said. “It’s smoke-and-mirrors accounting.”

The Budget Committee document estimating the actual cost to be $2.5 trillion over years five through 14 of the program also showed $126 billion in deficit reduction in that period. It estimated even more down the road.

But Holtz-Eakin called that “fiction,” since it relies on more than $1 trillion in cuts to Medicare and Medicaid.

He said there’s no way the government can sustain and increase those cuts and expect the program to work.

The biggest problem of all is that the CBO – regardless of how well-intentioned or “objective” it is – have routinely underestimated the costs of government programs – especially health-related government programs – by a factor of ten.

The Senate Democrat health bill includes the public option.  It guarantees a government takeover of healthcare.

We are talking about clear matters of life and death.  We are talking about 1/6th of the U.S. economy.  And Democrats are playing games of smoke and mirrors.  What they are doing is beyond unconscionable.

$1 trillion in cuts to Medicare?  Bye-bye, old people.  In the words of Obama adviser Robert Reich, “We’re going to let you die.”

Liberal Newsweek has it’s “Case for Killing Granny.”  Newsbusters points out:

For good measure the magazine also promises readers to explain “Why We Should Insure Illegals” and how “Health Reform Could Combat Crime” in related articles linked on the front page. More illegal immigration, fewer criminals and old people. What a deal!

Please don’t be so naive and so stupid as to believe that these people aren’t serious.  And I mean deadly serious.

Make no mistake: Democrats are voting for the national economic suicide of the United States, and for the deaths by medical-resource rationing of millions of Americans who otherwise would have lived.

A Summary of the Government Takeover of Health Care

November 1, 2009

This is a prepared House Republican document which you can view as a PDF file here.

House Democrat Health “Reform” Legislation: Short Summary of the Government Takeover of Health Care

October 29, 2009


BACKGROUND AND EXECUTIVE SUMMARY

On October 29, 2009, Speaker Pelosi and the House Democrat leadership introduced H.R. 3962, the Affordable Health Care for America Act. The legislation combines provisions in the versions of H.R. 3200, America’s Affordable Health Choices Act, approved by the Committees on Education and Labor, Energy and Commerce, and Ways and Means, as well as other provisions negotiated behind closed doors by the Democrat leadership. The bill is expected on the floor the week of November 2, under a likely structured rule. While press reports indicate the bill will cost at least $894 billion, a CBO score is not yet available, and the following analysis will be updated as events warrant.

Buried within the contents of the 1,990 page bill—as well as a separate 13-page bill (H.R. 3961) that would increase the deficit by more than $200 billion—are details that will see a massive federal involvement in the health care of every American, including the following:

• Creation of a government-run insurance program that could cause as many as 114 million Americans to lose their current coverage;
• Abolition of the private market for individual health insurance, forcing individuals to purchase coverage in a government-run Exchange;
• Stifling insurance regulations that would raise premiums and encourage employers to drop coverage;
• Trillions of dollars in new federal spending that will exacerbate the deficit and imperil the nation’s long-term fiscal solvency;
• Taxes on all Americans—individuals who purchase insurance, individuals who do not purchase insurance, and millions of small businesses—that will kill jobs and raise health care premiums; and
• Cuts to Medicare Advantage plans that will result in higher premiums and dropped coverage for more than 10 million seniors.

SUMMARY OF KEY PROVISIONS
The Government Takeover

Creation of Exchange: The bill creates within the federal government a nationwide Health Insurance Exchange. Uninsured individuals would be eligible to purchase an Exchange plan, as would those whose existing employer coverage is deemed “insufficient” by the federal government. Once deemed eligible to enroll in the Exchange, individuals would be permitted to remain in the Exchange until becoming Medicare-eligible—a provision that would likely result in a significant movement of individuals into the bureaucrat-run Exchange over time. Employers with 25 or fewer employees would be permitted to join the Exchange in its first year, with employers with 25-50 employees permitted to join in its second year. Employers with fewer than 100 employees would be permitted to enroll in the third year, and all employers would also be eligible to join, if permitted to do so by the Commissioner. Many may note the limits on employer eligibility in the first several years are significantly higher than in H.R. 3200, thus expanding the scope of the government-run Exchange.

Exchange Benefit Standards: The bill requires the Commissioner to establish benefit standards for all plans. These onerous, bureaucrat-imposed standards would hinder the introduction of innovative models to improve enrollees’ health and wellness—and by insulating individuals from the cost of health services with restrictive cost-sharing, could raise health care costs.

Government-Run Health Plans: The bill requires the Department of Health and Human Services to establish a “public health insurance option” through the Exchange. The bill states the plan shall comply with requirements related to other Exchange plans. Empowered to collect individuals’ personal health information, with access to federal courts for enforcement actions and $2 billion in “start-up funds”—as well as 90 days’ worth of premiums as “reserves”—from the Treasury, the bill’s headings regarding a “level playing field” belie the reality of the plain text. In addition, the bill requires the Secretary to establish premium rates that can fully finance the cost of benefits and administrative costs, but there would always be the implicit backing of the federal government.

The bill provides that the government-run plan shall enlist all Medicare providers unless physicians affirmatively decide to opt-out of the program. While the Secretary will be required to “negotiate” reimbursement rates with doctors and hospitals, nothing in the bill prohibits the Secretary from using such negotiation to impose Medicare reimbursement levels on providers as part of a government-imposed “negotiation.” Should such a scenario occur, the Lewin Group has estimated that as many as 114 million individuals could lose access to their current coverage under a government-run plan—and that a government-run plan reimbursing at the rates contemplated by the legislation would actually result in a net $16,207 decrease in reimbursements per physician per year, even after accounting for the newly insured.

The bill requires the Secretary to “establish conditions of participation for health care providers” under the government-run plan—however it includes no guidance or conditions under which the Secretary must establish those conditions. Many may be concerned that the bill would allow the Secretary to prohibit doctors from participating in other health plans as a condition of participation in the government-run plan—a way to co-opt existing provider networks and subvert private health coverage.

“Low-Income” Subsidies: The bill provides subsidies only through the Exchange, again putting employer health plans at a disadvantage. Individuals with access to employer-sponsored insurance whose group premium costs exceed 12 percent of adjusted gross income would be eligible for subsidies.

The bill provides that the Commissioner may authorize State Medicaid agencies—as well as other “public entit[ies]”—to make determinations of eligibility for subsidies and exempts the subsidy regime from the five-year waiting period on federal benefits established as part of the 1996 welfare reform law (P.L. 104-193). The second provision would give individuals a strong incentive to emigrate to the United States in order to obtain subsidized health benefits without a waiting period. Despite the bill’s purported prohibition on payments to immigrants not lawfully present, and the insertion of a citizenship verification provision, some may be concerned that the provisions as drafted would not require individuals to verify their identity when confirming eligibility for subsidies—encouraging identity fraud while still permitting undocumented immigrants and other ineligible individuals from obtaining taxpayer-subsidized benefits.

Premium subsidies provided would be determined on a six-tier sliding scale, such that individuals with incomes under 133 percent of the Federal Poverty Level (FPL, $29,327 for a family of four in 2009) would be expected to pay 1.5 percent of their income, while individuals with incomes at 400 percent FPL ($88,200 for a family of four) would be expected to pay 12 percent of their income. Subsidies would be based on adjusted gross income (AGI), meaning that individuals with total incomes well in excess of the AGI threshold could qualify for subsidies.

The bill further provides for cost-sharing subsidies, such that individuals with incomes under 133 percent FPL would be covered for 97 percent of expenses, while individuals with incomes at 400 percent FPL would have a basic plan covering 70 percent (the statutory minimum). These rich benefit packages, in addition to raising subsidy costs for the federal government, would insulate plan participants from the effects of higher health spending, resulting in an increase in overall health costs—exactly the opposite of the bill’s purported purpose.

Medicaid Expansion: The bill would expand Medicaid to all individuals with incomes under 150 percent of the federal poverty level ($33,075 for a family of four). Under the bill, the bill’s expansion of Medicaid to more than 10 million individuals would be fully paid for by the federal government only through 2014—thus imposing billions in unfunded mandates on States, which would be expected to pay nearly 10 percent of the cost of the expansion beginning in 2015.

Benefits Committee: The bill establishes a new government health board called the “Health Benefits Advisory Committee” to make recommendations on minimum federal benefit standards and cost-sharing levels. The Committee would be comprised of federal employees and Presidential appointees.

The bill eliminates language in the discussion draft of H.R. 3200 stating that Committee should “ensure that essential benefits coverage does not lead to rationing of health care.” Many view this change as an admission that the bureaucrats on the Advisory Committee—and the new government-run health plan—would therefore deny access to life-saving services and treatments on cost grounds. As written, the Committee could require all Americans to obtain health insurance coverage of abortion procedures as part of the bill’s new individual mandate.

 

Funneling Patients into Government Care

Abolition of Private Insurance Market: The bill imposes new regulations on all health insurance offerings, with only limited exceptions. Existing individual market policies could remain in effect—but only so long as the carrier “does not change any of its terms and conditions, including benefits and cost-sharing” once the bill takes effect. With the exception of these grandfathered individual plans subject to numerous restrictions, insurance purchased on the individual market “may only be offered” until the Exchange comes into effect, thus abolishing the private market for individual health insurance and requiring all non-employer-based coverage to be purchased through the bureaucrat-run Exchange.

Employer coverage shall be considered exempt from the additional federal mandates, but only for a five year “grace period”—after which all the bill’s mandates shall apply. By applying new federal mandates and regulations to employer-sponsored coverage, this provision would increase health costs for businesses and their workers, encourage employers to drop existing coverage, and leave employees to access care through the government-run Exchange.

“Pay-or-Play” Mandate on Employers: The bill requires that employers offer health insurance coverage, and contribute to such coverage at least 72.5 percent of the cost of a basic individual policy—as defined by the Health Benefits Advisory Council—and at least 65 percent of the cost of a basic family policy, for full-time employees. The bill further extends the employer mandate to part-time employees, with contribution levels to be determined by the Commissioner, and mandates that any health care contribution “for which there is a corresponding reduction in the compensation of the employee” will not comply with the mandate—which would encourage them to lay off workers.

Employers must comply with the mandate by “paying” a tax of 8 percent of wages in lieu of “playing” by offering benefits that meet the criteria above. In addition, beginning in the Exchange’s second year, employers whose workers choose to purchase coverage through the Exchange would be forced to pay the 8 percent tax to finance their workers’ Exchange policy—even if they offer coverage to their workers.

The bill includes a limited exemption for small businesses from the employer mandate—those with total payroll under $500,000 annually would be exempt, and those with payrolls between $500,000 and
$750,000 would be subjected to lower tax penalties (2-6 percent, as opposed to 8 percent for firms with payrolls over $750,000). However, these limits are not indexed for inflation, and the threshold amounts would likely become increasingly irrelevant over time, meaning virtually all employers would be subjected to the 8 percent payroll tax.

The bill amends ERISA to require the Secretary of Labor to conduct regular plan audits and “conduct investigations” and audits “to discover non-compliance” with the mandate. The bill provides a further penalty of $100 per employee per day for non-compliance with the “pay-or-play” mandate—subject only to a limit of $500,000 for unintentional failures on the part of the employer.

The employer mandate would impose added costs on businesses with respect to both their payroll and administrative overhead. An economic model developed by Council of Economic Advisors Chair Christina Romer found that an employer mandate could result in the loss of up to 5.5 million jobs as employers lay off employees to avoid providing costly, government-forced health insurance.

Individual Mandate: The bill places a tax on individuals who do not purchase “acceptable health care coverage,” as defined by the bureaucratic standards in the bill. The tax would constitute 2.5 percent of adjusted gross income, up to the amount of the national average premium through the Exchange. The tax would not apply to dependent filers, non-resident aliens, individuals resident outside the United States, and those exempted on religious grounds. “Acceptable coverage” includes qualified Exchange plans, “grandfathered” individual and group health plans, Medicare and Medicaid plans, and military and veterans’ benefits.

For individuals with incomes of under $100,000, the cost of complying with the mandate would be under $2,000—raising questions of how effective the mandate will be, as paying the tax would in many cases cost less than purchasing an insurance policy. Despite, or perhaps because of, this fact, the bill language does not include an affordability exemption from the mandate; thus, if the many benefit mandates imposed raise premiums so as to make coverage less affordable for many Americans, they will have no choice but to pay an additional tax as their “penalty” for not being able to afford coverage. Then-Senator Barack Obama, pointed out in a February 2008 debate that in Massachusetts, the one State with an individual mandate, “there are people who are paying fines and still can’t afford [health insurance], so now they’re worse off than they were. They don’t have health insurance and they’re paying a fine.”

Medicare Advantage: The bill reduces Medicare Advantage (MA) payment benchmarks to levels paid by traditional Medicare—which provides less care to seniors—over a three-year period. This arbitrary adjustment would reduce access for millions of seniors to MA plans that have brought additional benefits.

The bill imposes requirements on MA plans to offer cost-sharing no greater than that provided in government-run Medicare, and imposes price controls on MA plans, limiting their ability to offer innovative benefit packages. This policy would encourage plans to keep seniors sick, rather than manage their chronic disease.

The bill also gives the Secretary blanket authority to reject “any or every bid by an MA organization,” as well as any bid by a carrier offering private Part D Medicare prescription drug coverage, giving federal bureaucrats the power to eliminate the MA program entirely—by rejecting all plan bids for nothing more than the arbitrary reason that an Administration wishes to force the 10 million beneficiaries enrolled in MA back into traditional, government-run Medicare against their will.
Tax Increases

Government-Forced Insurance Penalties: Offsetting payments to finance the government takeover of health care would include taxes on individuals not complying with the mandate to purchase coverage, as well as taxes and payments by businesses associated with the “pay-or-play” mandate.

Taxes on Small Businesses: The bill also imposes a new 5.4 percent “surtax” on individuals with incomes over incomes over $500,000 and families with incomes greater than $1 million. The tax would apply beginning in 2011. As more than half of all high-income filers are small businesses, this provision would cripple small businesses and destroy jobs during a deep recession.

Taxes on Health Plans: The bill prohibits the reimbursement of over-the-counter pharmaceuticals from Health Savings Accounts (HSAs), Medical Savings Accounts, Flexible Spending Arrangements (FSAs), and Health Reimbursement Arrangements (HRAs), and increases the penalties for non-qualified HSA withdrawals from 10 percent to 20 percent, effective in 2011. Because these savings vehicles are tax-preferred, adopting this prohibition would raise taxes by $8.2 billion over ten years, according to the Joint Committee on Taxation.

H.R. 3962 would place a cap on FSA contributions, beginning in 2012; contributions could only total $2,500 per year, subject to annual adjustments linked to the growth in general (not medical) inflation. Members may be concerned that these provisions would first raise taxes, and second—by imposing additional restrictions on health savings vehicles popular with tens of millions of Americans—undermines the promise that “If you like your current coverage, you can keep it.” At least 8 million individuals hold insurance policies eligible for HSAs, and millions more participate in FSAs. All these individuals would be subject to additional coverage restrictions—and tax increases—under this provision.

The bill also repeals the current-law tax deductibility of subsidies provided to companies offering prescription drug companies to retirees. Many may be concerned that this provision would lead to companies dropping their current coverage as a result.

Taxes on Health Products: Finally, H.R. 3962 would impose a 2.5 percent excise tax on medical devices, beginning in 2013. Many may echo the concerns of the Congressional Budget Office and other independent experts, who have confirmed that this tax would be passed on to consumers in the form of higher prices—and ultimately higher premiums.
Budgetary Gimmicks

Unpaid-For Doctor Fix: While the Democrats claim their bill is now deficit-neutral, the majority also introduced a separate piece of stand-alone legislation (H.R. 3961). The more than $200 billion cost of this legislation is not paid for, thus adding hundreds of billions of dollars in deficit spending and interest costs to the federal debt. Many may also note that the Congressional Budget Office recently analyzed similar legislation (S. 1776) as raising Medicare premiums by $70 billion.

Long-Term Care Program: The bill includes a new program for long-term care services that provides a benefit of at least $50 per day to individuals unable to perform certain functions of daily living. As the long-term care program requires individuals to contribute five years’ worth of premiums before becoming eligible for benefits, the program would find its revenue over the first ten years diverted to finance other spending in Democrats’ health care “reform.” However, the Congressional Budget Office, in analyzing similar provisions included in Section 191 of legislation considered by the Senate HELP Committee, found that “if the Secretary did not modify the program to improve its actuarial soundness, the program would add to future federal budget deficits in a large and growing fashion beginning a few years beyond the 10-year budget window.” As even Democrats such as Senate Budget Committee Chairman Kent Conrad (D-ND) have called the program a “Ponzi scheme,” many may find any legislation that relies upon such a program to maintain “deficit-neutrality” fiscally irresponsible and not credible.


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