Do you think health care reform can succeed without a public option? To comment on this issue, please use our forum.Do you think health care reform can succeed without a public option? To comment on this issue, please use our forum.
Proponents of government-directed health reform achieved a victory recently when the Senate Finance Committee approved the reform bill by Sen. Max Baucus, D-Mont. The Baucus plan purports to extend health coverage to the uninsured and provide those who already have insurance with better health care choices while cutting health costs.
The bill fails on all these counts. In fact, the Baucus plan would, at best, increase the number of non-elderly Americans with health insurance by just 11 percentage points over the next decade. But in order to do so, it would spend billions of taxpayer dollars, curtail patients' health care choices, and still leave 30 million Americans without insurance. That's far too great a price to pay for little more than a cosmetic improvement in the uninsured rate.
The Congressional Budget Office estimates that the Baucus bill will cost $829 billion over 10 years and somehow reduce the federal budget deficit over the same time. But CBO's calculations are a tad optimistic – to say the least.
For example, the CBO assumed that Congress would actually follow through on the bill's intention to cut doctor-reimbursement rates for Medicare and Medicaid patients by 25 percent in 2011. History suggests that this is unlikely, as doctors have successfully lobbied Congress year after year to relent on such cuts.
In 1997, Congress established a complex formula to automatically adjust Medicare payments to physicians to keep costs down. Between 1997 and 2001, the economy grew faster than Medicare payments, so there was no problem. Then the economy slowed, and the formula called for payment cuts. In 2002, a small cut took effect. Every year since, Congress has stepped in to block cuts for the current year and push them off to "next year."
The 4.4 percent cut Congress skipped in 2003 became a 5.1 percent cut in 2007. That became a 10.6 percent cut this year – which, of course, didn't happen. Next year, the spending cut is set to be 21 percent. If you believe that cut will happen, I have a bridge I'd like to sell you.
Such is the danger of a new entitlement like the one in Baucus' plan – the beneficiaries are in the present, while future generations get saddled with the bill.
The Baucus plan would also burden Americans with billions of dollars in taxes and fees. Individuals who fail to purchase health insurance, as required by the bill, will be expected to pay fines totaling $1 billion a year. All told, the new taxes in the Baucus plan would extract $200 billion from ordinary Americans.
The plan also features a hefty hidden tax. Because it would bar insurers from denying coverage for pre-existing conditions and would require that everyone be charged similar premiums, the bill would send the price of insurance ever higher. The biggest group of people without insurance – the 11 percent – are young, single people between the ages of 19 and 35.
The average yearly cost of insurance premiums under the Baucus bill will rise from about $1,900 to about $6,900 a year with about the same level of coverage. Given a choice of paying a $400 tax for not getting insurance or paying $5,000 more a year for care, who wouldn't wait to buy coverage until after they get sick?
Those consumers who choose to comply with the insurance mandate would experience some $100 billion worth of premium hikes. Congress may not believe those price increases are taxes, but they'll have the exact same impact on the average family's bottom line.
Proponents of the Baucus bill claim that it's the first step toward fixing our health care system. But it's hard to see how any plan that costs more than $800 billion, raises taxes, limits patients' choices, rations care, increases the cost of health insurance by 300 percent and still leaves tens of millions of Americans uninsured can be called a winner.
Do you think health care reform can succeed without a public option? To comment on this issue, please use our forum.
