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The House's Expensive Medicine

November 09, 2009

By David Gratzer

In 2008, three researchers decided to cost out the expense of insuring those in America lacking health insurance. The Health Affairs paper estimates the price tag at $120 billion a year.

The paper is flawed. First and foremost, the cost of health care to the nation’s uninsured is assumed to be the same as the average for those who are insured. (Remember that the uninsured tend to be younger and healthier than the rest of the population, and not everyone necessarily needs full coverage.)

The authors also assumed that it was the government’s job to insure all 47 million or so uninsured. (Remember that some uninsured are illegals — even the president quotes a figure far lower than 47 million.)

But let’s go back to the price tag. Even with these generous assumptions, they calculate that insurance for all is $120 billion a year away.

On Saturday, with limited debate, the House of Representatives passed health-reform legislation that — when fully enacted — will cost roughly $3 trillion over a decade. That’s the CBO estimate, by the way.

Do the back-of-the-napkin calculation — $120 billion times 10 — and you draw one conclusion: The House bill is about more than covering the nation’s uninsured.

Rather, it’s about remaking the nation’s health care system. No wonder then that the HR 3962, approved by the narrowest of margins, stretches to 1,990 pages, besting the 1993 version of ClintonCare by 648 pages.

What’s in the package? The bill creates a Health Benefits Advisory Committee empowered with defining and enforcing basic health benefits.

At first, the regulations would cover plans in the Health Insurance Exchange and new employer-based coverage. But by 2018, everyone’s plan would need to comply with federal standards.

That’s right — you work for a company with excellent benefits and, yes, the company would still need to comply with new federal regulations drafted by unelected Washington bureaucrats.

What else?

  • A massive expansion of Medicaid.
  • A raft of subsidies for tens of millions of Americans.
  • Proposals to steer health care decisions with the learned advice of a government committee.
  • A public plan — modeled after Medicare — to compete against private insurance.
  • More than 100 new bureaucracies, including (no irony here) a Program of Administrative Simplification.

New entitlements, expanded entitlements, influence on clinical decisions, and even an insurance to call its own — all this would be Washington’s role if the House bill sees its way into law.

Democrats keep reassuring Americans, though, that the House bill will not become law. The White House suggests that this is one step in the process, assuming that “cooler heads” will prevail in the Senate. Even moderate Congressmen like Jim Cooper, D-Tenn. — who opposed ClintonCare in the 1990s — seem to be buying into the logic.

But, at this point, do Democrats really have our confidence that they can be trusted to save us from, well, Democrats? After months of negotiations and thinking, why hasn’t the White House reined in House Democrats?

And perhaps, more importantly, how different is the thinking over on the Senate side? On all the major policy details, Majority Leader Harry Reid and the leadership have agreed with their House counterparts.

A public option? Sen. Reid is on record saying that the final Senate bill would contain the proposal. A Health Insurance Exchange, regulated by Washington? Even the Baucus bill had that. Expansion of Medicaid and subsidies? The only difference between the Senate and House leadership is over the amount to spend.

And that, ultimately, is the problem: These guys are haggling over details when their fundamental approach is flawed. American health care will not be regulated into cost-effectiveness — if it were that simple, the good people of Canada would have beaten us to the punch.

A government committee to figure out value-based health care? Britain has been experimenting with the concept for a decade, and all they seem to have accomplished is angry headlines in the newspapers. And the subsidies and program expansions? That hasn’t exactly produced a cure in Massachusetts.

In the 1970s, Democrats favored a robust role for Washington in business, picking winners and losers from industry. Today, they want to do the same for health care. Is the approach any wiser after all these years?

Original Source: http://www.investors.com/NewsAndAnalysis/Article.aspx?id=511791

 

 
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