Current HC Bills Make Problems Worse

[Zoom-boing]

To persuade the American people to support his health reform agenda, the president has made two simple promises. First, his plan will benefit everyone who already has health insurance. Second, his plan will not add to the nation's yawning budget deficit. Both claims are essentially false, and examining them offers economic lessons for reform.

The administration's plan will impose mandates that employers provide coverage, mandates that individuals obtain coverage, and mandates about the form this coverage will have to take. These will remove the freedom to choose one's health-insurance plan, because government, in its effort to correct perceived inequities, will dictate which health-care services must be covered and which health-care providers must be used.

The proposed unprecedented intrusion of government into private markets will have adverse effects on people with insurance in both the short and the long run.

The mandates will lead to large increases in the cost of health insurance for everyone. Research studies have shown that as people become insured, especially under a health plan that offers broad coverage and low copayments, they consume more health-care services. The best estimates indicate that each newly insured person will approximately double his or her health spending.

With 30 million to 40 million newly insured persons under the administration's plan, aggregate health-care demand will increase significantly. But when demand expands prices increase. We estimate that the higher demand will increase health insurance premiums for the typical family plan by about 10%. Because an employer-sponsored family insurance plan cost $12,680 in 2008, this translates into an increase of about $1,200 in the typical annual premium.

The mandates will also have adverse additional longer-run consequences. According to provisions in both House and Senate bills, mandated plans must have low copayments and provide coverage of health-care services that is at least equal in scope to a typical, current employer-sponsored plan. But these are the very flaws that are responsible for high and rising health-care costs, flaws that stem directly from the misguided tax exclusion for and the extensive state regulation of health insurance. By locking in these flaws, the mandates will inhibit precisely the innovation needed to reform U.S. health care. Ultimately, as government seeks to rein in costs, it will curtail access to health-care services by erecting barriers between patient and health-care provider.

The current House and Senate bills will also break the president's second promise—not to add to the deficit. In part because the health insurance that the administration's plan forces people to buy is expensive, the plan proposes to give individuals large financial subsidies to partially offset the cost. The entitlement-based subsidy, combined with the proposed Medicaid expansion, would add between $700 billon and $1.2 trillion to federal spending over the next decade, according to the Congressional Budget Office. The new entitlements would come on top of existing federal health-care entitlements that the government has been neither able to control nor finance.

A portion of the additional spending is to be financed by savings from the existing federal health-care programs. But, thus far, the alleged savings come mainly from cutting future Medicare payment rates. If history is any guide, the savings won't materialize.

For the past 25 years, Congress has repeatedly "cut" payment rates. Yet Medicare's expenditures have continued to outstrip its dedicated revenues. New taxes have been required but revenues still can't keep up with expenses. Recall that in the early 1990s Congress removed the cap on Medicare's taxable wage base. Today, the Medicare Board of Trustees projects that the Hospital Insurance Trust Fund will be bankrupt in eight years.

More important, cutting payment rates is not reform. Ultimately, such price controls will lower the quality of health care and reduce the supply of health services, just as price controls have in every market where they've been tried. Congress's near-exclusive reliance on such cuts is revealing. It is a clear demonstration that the federal government has no idea how to reform its current insolvent health-care programs, much less how to properly design a new one.

Reform will be partly financed by higher taxes. The House bill proposes to raise the highest personal income tax rate by 5.4 percentage points. This is on top of the Obama administration's plan to raise the top rate by another 4.6 percentage points next year. The combined 10-percentage-point increase raises the top income tax rate to 45%—an economic growth-destroying level not seen since the early 1980s. Sen. Max Baucus (D., Mont.) proposes, instead, to tax some health insurance premiums.

In neither bill do higher taxes finance the proposed additional spending. Should the Medicare savings fail to materialize, as we believe they will, the spending in either bill will add more than $100 billion per year in perpetuity to the already soaring national debt.

John F. Cogan, R. Glenn Hubbard, and Daniel Kessler: Doubling Down on a Flawed Insurance Model - WSJ.com

 

[The T]

To persuade the American people to support his health reform agenda, the president has made two simple promises. First, his plan will benefit everyone who already has health insurance. Second, his plan will not add to the nation's yawning budget deficit. Both claims are essentially false, and examining them offers economic lessons for reform.

The administration's plan will impose mandates that employers provide coverage, mandates that individuals obtain coverage, and mandates about the form this coverage will have to take. These will remove the freedom to choose one's health-insurance plan, because government, in its effort to correct perceived inequities, will dictate which health-care services must be covered and which health-care providers must be used.

The proposed unprecedented intrusion of government into private markets will have adverse effects on people with insurance in both the short and the long run.

The mandates will lead to large increases in the cost of health insurance for everyone. Research studies have shown that as people become insured, especially under a health plan that offers broad coverage and low copayments, they consume more health-care services. The best estimates indicate that each newly insured person will approximately double his or her health spending.

With 30 million to 40 million newly insured persons under the administration's plan, aggregate health-care demand will increase significantly. But when demand expands prices increase. We estimate that the higher demand will increase health insurance premiums for the typical family plan by about 10%. Because an employer-sponsored family insurance plan cost $12,680 in 2008, this translates into an increase of about $1,200 in the typical annual premium.

The mandates will also have adverse additional longer-run consequences. According to provisions in both House and Senate bills, mandated plans must have low copayments and provide coverage of health-care services that is at least equal in scope to a typical, current employer-sponsored plan. But these are the very flaws that are responsible for high and rising health-care costs, flaws that stem directly from the misguided tax exclusion for and the extensive state regulation of health insurance. By locking in these flaws, the mandates will inhibit precisely the innovation needed to reform U.S. health care. Ultimately, as government seeks to rein in costs, it will curtail access to health-care services by erecting barriers between patient and health-care provider.

The current House and Senate bills will also break the president's second promise—not to add to the deficit. In part because the health insurance that the administration's plan forces people to buy is expensive, the plan proposes to give individuals large financial subsidies to partially offset the cost. The entitlement-based subsidy, combined with the proposed Medicaid expansion, would add between $700 billon and $1.2 trillion to federal spending over the next decade, according to the Congressional Budget Office. The new entitlements would come on top of existing federal health-care entitlements that the government has been neither able to control nor finance.

A portion of the additional spending is to be financed by savings from the existing federal health-care programs. But, thus far, the alleged savings come mainly from cutting future Medicare payment rates. If history is any guide, the savings won't materialize.

For the past 25 years, Congress has repeatedly "cut" payment rates. Yet Medicare's expenditures have continued to outstrip its dedicated revenues. New taxes have been required but revenues still can't keep up with expenses. Recall that in the early 1990s Congress removed the cap on Medicare's taxable wage base. Today, the Medicare Board of Trustees projects that the Hospital Insurance Trust Fund will be bankrupt in eight years.

More important, cutting payment rates is not reform. Ultimately, such price controls will lower the quality of health care and reduce the supply of health services, just as price controls have in every market where they've been tried. Congress's near-exclusive reliance on such cuts is revealing. It is a clear demonstration that the federal government has no idea how to reform its current insolvent health-care programs, much less how to properly design a new one.

Reform will be partly financed by higher taxes. The House bill proposes to raise the highest personal income tax rate by 5.4 percentage points. This is on top of the Obama administration's plan to raise the top rate by another 4.6 percentage points next year. The combined 10-percentage-point increase raises the top income tax rate to 45%—an economic growth-destroying level not seen since the early 1980s. Sen. Max Baucus (D., Mont.) proposes, instead, to tax some health insurance premiums.

In neither bill do higher taxes finance the proposed additional spending. Should the Medicare savings fail to materialize, as we believe they will, the spending in either bill will add more than $100 billion per year in perpetuity to the already soaring national debt.

John F. Cogan, R. Glenn Hubbard, and Daniel Kessler: Doubling Down on a Flawed Insurance Model - WSJ.com

They still don't get it do they? They've been told NO. People don't want the Government involved until they get the messes they've already created/mismanaged fixed. Why add to it?

It just digs the hole deeper and something we may NEVER be able to climb out of in my view.

 

[Old Rocks]

No, the people have not told them NO. That is the Rushpublican mantra, the people still approve of President Obama's handling of the Presidency at 55%. You wing nuts can beat your gums all you please, the rest of us want to see some real solutions to the fraud that is our current Health Care System.

 

[The T]

No, the people have not told them NO. That is the Rushpublican mantra, the people still approve of President Obama's handling of the Presidency at 55%. You wing nuts can beat your gums all you please, the rest of us want to see some real solutions to the fraud that is our current Health Care System.

I see. Back to the partisan horsedhit I see. Very FEW of the people involved this past Summer were partisan. They see their fortunes, their futures being sold.

Why does Government want to get involved into Healthvcare, when there is NO Constitutional mandate for it?

EXPLAIN to the rest of the class assembled where it IS mandated?

Chapter, and VERSE.

I'll wait, but have NO hope of a cogent answer from you because the answer again is NO.

Ready? GO!

 

[Old Rocks]

My, my, what a silly ass you are 'T'. There is no Constitutional Mandate for National Parks, for National Forests, for Social Security, for the CDC.

The Constitution of the United States of America
We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

I believe that the red phrase covers it all adaquetely. Of course you do not agree, and if you can get enough people to agree with you, then the programs won't happen. If you cannot, and most agree with people like myself, and President Obama, then they will.

Comprende?

 

[Skull Pilot]

My, my, what a silly ass you are 'T'. There is no Constitutional Mandate for National Parks, for National Forests, for Social Security, for the CDC.

The Constitution of the United States of America
We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

I believe that the red phrase covers it all adaquetely. Of course you do not agree, and if you can get enough people to agree with you, then the programs won't happen. If you cannot, and most agree with people like myself, and President Obama, then they will.

Comprende?

So you interpret "promote the general welfare" as the government forcing you to buy insurance and not just any insurance but the insurance they tell you to buy even if it covers things you have no need for and costs more than it should and then levying a hefty tax on you if you don't comply?

Does "promote the general welfare" also mean that certain foods and the businesses that provide them should be banned? How about other things that threaten the general welfare? Cars that can do more than 65 mph are certainly more dangerous than those that can do 140mph and motorcycles are just death on wheels. Rock climbing and other risky behaviors are certainly too dangerous to be allowed.

Personally, my general welfare is best served by letting me make my own decisions and not having to submit to government control of every aspect of my life.

 

[Zoom-boing]

No, the people have not told them NO. That is the Rushpublican mantra, the people still approve of President Obama's handling of the Presidency at 55%. You wing nuts can beat your gums all you please, the rest of us want to see some real solutions to the fraud that is our current Health Care System.

Did you even bother to read the full article?

Reform is needed but the proposed plans will only make a bad situation worse.

But you, like Obama, will take anything just to claim victory . . .

 

[zancor]

I hope they keep pushing this unconstitutional mess. The people are ANGRY and getting ANGRIER! 2010 will lead to the extinction of the dinosaur democrats

 

[tigerbob]

No, the people have not told them NO. That is the Rushpublican mantra, the people still approve of President Obama's handling of the Presidency at 55%. You wing nuts can beat your gums all you please, the rest of us want to see some real solutions to the fraud that is our current Health Care System.

Did you even bother to read the full article?

Reform is needed but the proposed plans will only make a bad situation worse.

But you, like Obama, will take anything just to claim victory . . .

That kind of depends how you define worse.

 

[Ame®icano]

So you interpret "promote the general welfare" as the government forcing you to buy insurance and not just any insurance but the insurance they tell you to buy even if it covers things you have no need for and costs more than it should and then levying a hefty tax on you if you don't comply?

Does "promote the general welfare" also mean that certain foods and the businesses that provide them should be banned? How about other things that threaten the general welfare? Cars that can do more than 65 mph are certainly more dangerous than those that can do 140mph and motorcycles are just death on wheels. Rock climbing and other risky behaviors are certainly too dangerous to be allowed.

Personally, my general welfare is best served by letting me make my own decisions and not having to submit to government control of every aspect of my life.

I agree. Under "general welfare" government is trying to sneak in every aspect of our lives. Do we really want the government to have the authority to require citizens to buy health insurance?

As first, I enjoy having the right to choose for myself what I will spend my hard-earned money on. Most people in their twenties don't really need health insurance, is it not their right to not buy health insurance and perhaps put that money into a mutual fund or some other investment, for instance?

As second, if bill that requires all citizens to be insured is passed, and if imposes a fine for refusal, and then the fine is not payed, imprisonment will follow. That's ridiculous!!! It pisses me of that an American citizen could land in jail for not buying health insurance for himself.

 

[Ame®icano]

No, the people have not told them NO. That is the Rushpublican mantra, the people still approve of President Obama's handling of the Presidency at 55%. You wing nuts can beat your gums all you please, the rest of us want to see some real solutions to the fraud that is our current Health Care System.

Did you even bother to read the full article?

Reform is needed but the proposed plans will only make a bad situation worse.

But you, like Obama, will take anything just to claim victory . . .

Will say anything, even lie...

[ame=http://www.youtube.com/watch?v=p-bY92mcOdk]YouTube - SHOCK UNCOVERED: Obama IN HIS OWN WORDS saying His Health Care Plan will ELIMINATE private insurance[/ame]

 

[Immanuel]

As second, if bill that requires all citizens to be insured is passed, and if imposes a fine for refusal, and then the fine is not payed, imprisonment will follow. That's ridiculous!!! It pisses me of that an American citizen could land in jail for not buying health insurance for himself.

I'm waiting for the spin on this one!

Certainly, that is not what the memo meant. Certainly, no "law abiding" citizen would end up in prison for not succumbing to forced health insurance! Oh, wait, they would not be "law abiding" citizens if they refuse to succumb.

Immie