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Senate Finance Chairman Max Baucus finally unveiled his health-care plan yesterday to a chorus of bipartisan jeers. The reaction is surprising given that President Obama all but endorsed the outlines of the Baucus plan last week. But the hoots are only going to grow louder as more people read what he's actually proposing.
The headline is that Mr. Baucus has dropped the unpopular "public option," but this is a political offering without much policy difference. His plan remains a public option by other means, imposing vast new national insurance regulation, huge new subsidies to pay for the higher insurance costs this regulation will require and all financed by new taxes and penalties on businesses, individuals and health-care providers. Other than that, Hippocrates, the plan does no harm.
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The centerpiece of the Obama-Baucus plan is a decree that everyone purchase heavily regulated insurance policies or else pay a penalty. This government mandate would require huge subsidies as well as brute force to get anywhere near the goal of universal coverage. The inevitable result would be a vast increase in the government's share of U.S. health spending, forcing doctors, hospitals, insurance companies and other health providers to serve politics as well as or even over and above patients.
The plan essentially rewrites all insurance contracts, including those offered by businesses to their workers. Benefits and premiums must be tailored to federal specifications. First-dollar coverage would be mandated for many services, and cost-sharing between businesses and employees would be sharply reduced, though this is one policy that might reduce health spending by giving consumers more skin in the game. Nor would insurance be allowed to bear any relation to risk. Inevitably, costs would continue to climb.
Everyone would be forced to buy these government-approved policies, whether or not they suit their needs or budget. Families would face tax penalties as high as $3,800 a year for not complying, singles $950. As one resident of Massachusetts where Mitt Romney imposed an individual mandate in 2006 put it in a Journal story yesterday, this is like taxing the homeless for not buying a mansion.
The political irony here is rich. If liberal health-care reform is going to make people better off, why does it require "a very harsh, stiff penalty" to make everyone buy it? That's what Senator Obama called it in his Presidential campaign when he opposed the individual mandate supported by Hillary Clinton. He correctly argued then that many people were uninsured not because they didn't want coverage but because it was too expensive. The nearby mailer to Ohio primary voters gives the flavor of Mr. Obama's attacks.
And the Baucus-Obama plan will only make insurance even more expensive. Employers will be required to offer "qualified coverage" to their workers (or pay another "free rider" penalty) and workers will be required to accept it, paying for it in lower wages. The vast majority of households already confront the same tradeoff today, except Congress will now declare that there's only one right answer.
The subsidies in the Baucus plan go to people without a job-based plan and who earn under three times the federal poverty level, or about $66,000 for a family of four. Yet according to a Congressional Budget Office analysis we've seen, the plan isn't much of an improvement over the current market.
Take a family of four making $42,000 in 2016. While government would subsidize 80% of their premium and pay $1,500 to offset cost-sharing, they'd still pay $6,000 a year or 14.3% of their total income. A family making $54,000 could still pay 18.1% of their income, while an individual earning $26,500 would be on the hook for 15.5%, and one earning $32,400 for 17.3%. So lower-income workers would still be forced to devote huge portions of their salaries to expensive policies that they may not want or be able to afford.
Other Democrats want to make the subsidies even bigger, but Mr. Baucus told reporters on Monday that, "We're doing our very best to make an insurance requirement as affordable as we possibly can, recognizing that we're trying to get this bill under $900 billion total." Another way of putting this is that he is hiding the real cost of his bill by pinching pennies to meet a less politically toxic overall spending number. In that sense, the House health bill which clocked in at $1.042 trillion because it was more generous upfront was more honest, though not by much.
Like the House bill, Mr. Baucus uses 10 years of taxes to fund about seven years of spending. Some $215 billion is scrounged up by imposing a 35% excise tax on insurance companies for plans valued at more than $21,000 for families and $8,000 for individuals. This levy would merely be added to the insurers' "administrative load" and passed down to all consumers in higher prices. Ditto for the $59 billion that Mr. Baucus would raise by taxing the likes of clinical laboratories and drug and device makers.
Mr. Baucus also wants to cut $409 billion from Medicare, according to CBO, though the only money that is certain to see the budget ax is $123 billion from the Medicare Advantage program. Liberal Democrats hate Advantage because it gives 10.2 million seniors private options. The other "savings" come from supposedly automatic cuts that a future Congress is unlikely to ever approve that is, until this entitlement spending swamps the federal budget. Then the government will have no choice but to raise taxes to European welfare-state levels or impose drastic restrictions on patient care. Or, most likely, both.
***
To sum up, the Baucus-Obama plan would increase the cost of insurance and then force people to buy it, requiring subsidies. Those subsidies would be paid for by taxes that make health care and thus insurance even more expensive, requiring even more subsidies and still higher taxes. It's a recipe to ruin health care and bankrupt the country, and that's even before liberal Democrats see Mr. Baucus and raise him, and then attempt to ram it all through the Senate.
Federal legislation requiring that every American have health insurance is part of all the major health-care reform plans now being considered in Washington. Such a mandate, however, would expand the federal government’s authority over individual Americans to an unprecedented degree. It is also profoundly unconstitutional.
An individual mandate has been a hardy perennial of health-care reform proposals since HillaryCare in the early 1990s. President Barack Obama defended its merits before Congress last week, claiming that uninsured people still use medical services and impose the costs on everyone else. But the reality is far different. Certainly some uninsured use emergency rooms in lieu of primary care physicians, but the majority are young people who forgo insurance precisely because they do not expect to need much medical care. When they do, these uninsured pay full freight, often at premium rates, thereby actually subsidizing insured Americans.
The mandate's real justifications are far more cynical and political. Making healthy young adults pay billions of dollars in premiums into the national health-care market is the only way to fund universal coverage without raising substantial new taxes. In effect, this mandate would be one more giant, cross-generational subsidy—imposed on generations who are already stuck with the bill for the federal government's prior spending sprees.
Politically, of course, the mandate is essential to winning insurance industry support for the legislation and acceptance of heavy federal regulations. Millions of new customers will be driven into insurance-company arms. Moreover, without the mandate, the entire thrust of the new regulatory scheme—requiring insurance companies to cover pre-existing conditions and to accept standardized premiums—would produce dysfunctional consequences. It would make little sense for anyone, young or old, to buy insurance before he actually got sick. Such a socialization of costs also happens to be an essential step toward the single payer, national health system, still stridently supported by large parts of the president's base.
The elephant in the room is the Constitution. As every civics class once taught, the federal government is a government of limited, enumerated powers, with the states retaining broad regulatory authority. As James Madison explained in the Federalist Papers: "n the first place it is to be remembered that the general government is not to be charged with the whole power of making and administering laws. Its jurisdiction is limited to certain enumerated objects." Congress, in other words, cannot regulate simply because it sees a problem to be fixed. Federal law must be grounded in one of the specific grants of authority found in the Constitution.
These are mostly found in Article I, Section 8, which among other things gives Congress the power to tax, borrow and spend money, raise and support armies, declare war, establish post offices and regulate commerce. It is the authority to regulate foreign and interstate commerce that—in one way or another—supports most of the elaborate federal regulatory system. If the federal government has any right to reform, revise or remake the American health-care system, it must be found in this all-important provision. This is especially true of any mandate that every American obtain health-care insurance or face a penalty.
The Supreme Court construes the commerce power broadly. In the most recent Commerce Clause case, Gonzales v. Raich (2005) , the court ruled that Congress can even regulate the cultivation of marijuana for personal use so long as there is a rational basis to believe that such "activities, taken in the aggregate, substantially affect interstate commerce."
But there are important limits. In United States v. Lopez (1995), for example, the Court invalidated the Gun Free School Zones Act because that law made it a crime simply to possess a gun near a school. It did not "regulate any economic activity and did not contain any requirement that the possession of a gun have any connection to past interstate activity or a predictable impact on future commercial activity." Of course, a health-care mandate would not regulate any "activity," such as employment or growing pot in the bathroom, at all. Simply being an American would trigger it.
Health-care backers understand this and—like Lewis Carroll's Red Queen insisting that some hills are valleys—have framed the mandate as a "tax" rather than a regulation. Under Sen. Max Baucus's (D., Mont.) most recent plan, people who do not maintain health insurance for themselves and their families would be forced to pay an "excise tax" of up to $1,500 per year—roughly comparable to the cost of insurance coverage under the new plan.
But Congress cannot so simply avoid the constitutional limits on its power. Taxation can favor one industry or course of action over another, but a "tax" that falls exclusively on anyone who is uninsured is a penalty beyond Congress's authority. If the rule were otherwise, Congress could evade all constitutional limits by "taxing" anyone who doesn't follow an order of any kind—whether to obtain health-care insurance, or to join a health club, or exercise regularly, or even eat your vegetables.
This type of congressional trickery is bad for our democracy and has implications far beyond the health-care debate. The Constitution's Framers divided power between the federal government and states—just as they did among the three federal branches of government—for a reason. They viewed these structural limitations on governmental power as the most reliable means of protecting individual liberty—more important even than the Bill of Rights.
Yet if that imperative is insufficient to prompt reconsideration of the mandate (and the approach to reform it supports), then the inevitable judicial challenges should. Since the 1930s, the Supreme Court has been reluctant to invalidate "regulatory" taxes. However, a tax that is so clearly a penalty for failing to comply with requirements otherwise beyond Congress's constitutional power will present the question whether there are any limits on Congress's power to regulate individual Americans. The Supreme Court has never accepted such a proposition, and it is unlikely to accept it now, even in an area as important as health care.
Baucus sucks, He's no Democrat. This bill sucks.
Baucus sucks, He's no Democrat. This bill sucks.
It's a handout to the insurance industry. Which means the right will think it's the greatest thing since sliced bread.
Where do you think those higher premiums go, eh?Baucus sucks, He's no Democrat. This bill sucks.
It's a handout to the insurance industry. Which means the right will think it's the greatest thing since sliced bread.
The bill is a slap in the face to the people and the constitution. it will force all of us to pay higher premiums and all you can say is that it's a handout to the insurance industry?
An individual mandate has been a hardy perennial of health-care reform proposals since HillaryCare in the early 1990s. President Barack Obama defended its merits before Congress last week, claiming that uninsured people still use medical services and impose the costs on everyone else. But the reality is far different. Certainly some uninsured use emergency rooms in lieu of primary care physicians, but the majority are young people who forgo insurance precisely because they do not expect to need much medical care. When they do, these uninsured pay full freight, often at premium rates, thereby actually subsidizing insured Americans.
Where do you think those higher premiums go, eh?It's a handout to the insurance industry. Which means the right will think it's the greatest thing since sliced bread.
The bill is a slap in the face to the people and the constitution. it will force all of us to pay higher premiums and all you can say is that it's a handout to the insurance industry?
An individual mandate has been a hardy perennial of health-care reform proposals since HillaryCare in the early 1990s. President Barack Obama defended its merits before Congress last week, claiming that uninsured people still use medical services and impose the costs on everyone else. But the reality is far different. Certainly some uninsured use emergency rooms in lieu of primary care physicians, but the majority are young people who forgo insurance precisely because they do not expect to need much medical care. When they do, these uninsured pay full freight, often at premium rates, thereby actually subsidizing insured Americans.
Just because people write or say things, they aren't necessarily true. A young person who chooses to go without health insurance, because they don't think they'll need it, may well not be able to afford it. Certainly, young people are not at their peak for earning potential. In fact, most young people are just getting started and have very little as far as savings or assets go. So if they get sick or hurt, they can't pay, especially not at a premium price. This argument doesn't even begin to make sense.
On top of that, young women get pregnant. Even a normal delivery will run around $10,000. What about problem pregnancies? Both my boys were born premature. One was born ten weeks early and was in NICU for 47 days. Any idea how much that costs?
It's almost as if you are saying that young people shouldn't carry health insurance because it's a waste of money. I guess this is the problem between idealism and reality.
Baucus sucks, He's no Democrat. This bill sucks.
It's a handout to the insurance industry. Which means the right will think it's the greatest thing since sliced bread.
And let's not forget that
David B. Rivkin Jr. and Lee A. Casey: Mandatory Insurance Is Unconstitutional - WSJ.com
Federal legislation requiring that every American have health insurance is part of all the major health-care reform plans now being considered in Washington. Such a mandate, however, would expand the federal governments authority over individual Americans to an unprecedented degree. It is also profoundly unconstitutional.
An individual mandate has been a hardy perennial of health-care reform proposals since HillaryCare in the early 1990s. President Barack Obama defended its merits before Congress last week, claiming that uninsured people still use medical services and impose the costs on everyone else. But the reality is far different. Certainly some uninsured use emergency rooms in lieu of primary care physicians, but the majority are young people who forgo insurance precisely because they do not expect to need much medical care. When they do, these uninsured pay full freight, often at premium rates, thereby actually subsidizing insured Americans.
The mandate's real justifications are far more cynical and political. Making healthy young adults pay billions of dollars in premiums into the national health-care market is the only way to fund universal coverage without raising substantial new taxes. In effect, this mandate would be one more giant, cross-generational subsidyimposed on generations who are already stuck with the bill for the federal government's prior spending sprees.
Politically, of course, the mandate is essential to winning insurance industry support for the legislation and acceptance of heavy federal regulations. Millions of new customers will be driven into insurance-company arms. Moreover, without the mandate, the entire thrust of the new regulatory schemerequiring insurance companies to cover pre-existing conditions and to accept standardized premiumswould produce dysfunctional consequences. It would make little sense for anyone, young or old, to buy insurance before he actually got sick. Such a socialization of costs also happens to be an essential step toward the single payer, national health system, still stridently supported by large parts of the president's base.
The elephant in the room is the Constitution. As every civics class once taught, the federal government is a government of limited, enumerated powers, with the states retaining broad regulatory authority. As James Madison explained in the Federalist Papers: "n the first place it is to be remembered that the general government is not to be charged with the whole power of making and administering laws. Its jurisdiction is limited to certain enumerated objects." Congress, in other words, cannot regulate simply because it sees a problem to be fixed. Federal law must be grounded in one of the specific grants of authority found in the Constitution.
These are mostly found in Article I, Section 8, which among other things gives Congress the power to tax, borrow and spend money, raise and support armies, declare war, establish post offices and regulate commerce. It is the authority to regulate foreign and interstate commerce thatin one way or anothersupports most of the elaborate federal regulatory system. If the federal government has any right to reform, revise or remake the American health-care system, it must be found in this all-important provision. This is especially true of any mandate that every American obtain health-care insurance or face a penalty.
The Supreme Court construes the commerce power broadly. In the most recent Commerce Clause case, Gonzales v. Raich (2005) , the court ruled that Congress can even regulate the cultivation of marijuana for personal use so long as there is a rational basis to believe that such "activities, taken in the aggregate, substantially affect interstate commerce."
But there are important limits. In United States v. Lopez (1995), for example, the Court invalidated the Gun Free School Zones Act because that law made it a crime simply to possess a gun near a school. It did not "regulate any economic activity and did not contain any requirement that the possession of a gun have any connection to past interstate activity or a predictable impact on future commercial activity." Of course, a health-care mandate would not regulate any "activity," such as employment or growing pot in the bathroom, at all. Simply being an American would trigger it.
Health-care backers understand this andlike Lewis Carroll's Red Queen insisting that some hills are valleyshave framed the mandate as a "tax" rather than a regulation. Under Sen. Max Baucus's (D., Mont.) most recent plan, people who do not maintain health insurance for themselves and their families would be forced to pay an "excise tax" of up to $1,500 per yearroughly comparable to the cost of insurance coverage under the new plan.
But Congress cannot so simply avoid the constitutional limits on its power. Taxation can favor one industry or course of action over another, but a "tax" that falls exclusively on anyone who is uninsured is a penalty beyond Congress's authority. If the rule were otherwise, Congress could evade all constitutional limits by "taxing" anyone who doesn't follow an order of any kindwhether to obtain health-care insurance, or to join a health club, or exercise regularly, or even eat your vegetables.
This type of congressional trickery is bad for our democracy and has implications far beyond the health-care debate. The Constitution's Framers divided power between the federal government and statesjust as they did among the three federal branches of governmentfor a reason. They viewed these structural limitations on governmental power as the most reliable means of protecting individual libertymore important even than the Bill of Rights.
Yet if that imperative is insufficient to prompt reconsideration of the mandate (and the approach to reform it supports), then the inevitable judicial challenges should. Since the 1930s, the Supreme Court has been reluctant to invalidate "regulatory" taxes. However, a tax that is so clearly a penalty for failing to comply with requirements otherwise beyond Congress's constitutional power will present the question whether there are any limits on Congress's power to regulate individual Americans. The Supreme Court has never accepted such a proposition, and it is unlikely to accept it now, even in an area as important as health care.
so you're in favor of the government forcing young people to pay for insurance and them penalize then thousands of additional dollars if they don't comply?
so you're in favor of the government forcing young people to pay for insurance and them penalize then thousands of additional dollars if they don't comply?
It's a necessary requirement.
so you're in favor of the government forcing young people to pay for insurance and them penalize then thousands of additional dollars if they don't comply?
It's a necessary requirement.
It isn't about health care it's about more government control and less personal choice. It is that simple.
It isn't about health care it's about more government control and less personal choice. It is that simple.
That's exactly what it is. And they have no business doing these things.
so you're in favor of the government forcing young people to pay for insurance and them penalize then thousands of additional dollars if they don't comply?
It's a necessary requirement.
good to know that you feel this way Polk. Scary authoritarian stance but its you're opinion so i wont try to convince you its a crazy position to hold.
I really can't believe Polk is against the freedom of choice, the suprises you get when you assume someone lives by liberal values. Assuming makes an ASS out of U and ME
It isn't about health care it's about more government control and less personal choice. It is that simple.
