Let the Unraveling Continue

[Zoom-boing]

But what about the Baucus plan, released last week?

Again, the White House and Senate Democratic leaders are hoping its introduction and the scheduling of a markup in the Senate Finance Committee will create a sense of irresistible political momentum that will feed on itself. “Closer than we’ve ever been before.” “Doing nothing is not an option.” “Now is the time for action, not debate.” Etc. Etc.

But the Baucus plan suffers from the same problem that derailed the House bill: the more the public hears and learns about it, the less they like it.

In particular, there are three key provisions in the Baucus plan that are on very shaky ground politically, so much so that it’s hard to see how they survive intact.

First, there’s the so-called “individual mandate.” This is the key provision of Obamacare. It turns out that the grand plan to finally bring civilized, “universal coverage” to America amounts to nothing more than a hefty, regressive tax on low and moderate wage working Americans. They must either buy government-approved health insurance — the cost of which is driven up by excessive government regulation — or they must pay a $3,800 per household tax to the IRS. Yesterday, Pres. Obama tried to argue that this kind of overt government coercion doesn’t amount to a tax. Good luck with that argument.

Second, there are the cuts in Medicare Advantage (MA) payment rates, which Democrats have targeted for nearly three years now. Pres. Obama keeps trying to sell these cuts as nothing more than reductions in profits for insurance companies, but senior citizens know better. Today, about 20 percent of the Medicare population is in MA plans (the private insurance option in Medicare), and most of them get coverage that goes well beyond what’s offered by traditional Medicare. If $120 billion is taken out of MA payment rates, as suggested by Sen. Baucus, there will be large cuts in benefits for many millions of seniors and many will also be forced out of their current MA plans. So much for the promise that Americans can “keep the insurance they have today.” In the coming weeks, the Medicare population is likely to turn even more decisively against Obamacare as they hear and learn more about these cuts.

Third, there’s the new tax on high-cost insurance plans. Here especially, the president has no one to blame but himself for the fix Democrats are in. Many conservatives actually favor reforming the tax treatment of health insurance to foster cost-conscious consumption in a competitive marketplace. But Pres. Obama won the election last November in part because he attacked his Republican opponent, Sen. John McCain, for endorsing a proposal to convert the job-based tax preference into individual tax credits. In scores of ads, the Obama-Biden campaign warned that the McCain plan would tax workplace health benefits “for the first time in history.” Now, the president and Sen. Baucus want to do exactly that — without admitting that’s what they are doing. It won’t work, though, as this story in the New York Times demonstrates, because it is obvious to all that the Baucus tax on insurers and employers will get passed on to workers and individual insurance enrollees, including many middle income households and union members.

The White House and their allies in Congress could avoid the political fallout associated with these highly controversial provisions if they worked with Republicans on a sensible, measured, bipartisan bill that covered more people with voluntary enrollment in a reformed marketplace, not heavy-handed government coercion. But Democrats are bound and determined to try and pass something akin to the Great Society, despite clear signals from the public that they aren’t interested in any such thing. Much hangs in the balance.

Let the Unraveling Continue - James C. Capretta - Critical Condition on National Review Online