March 19, 2010


Sam Smith

As noted here before, the healthcare bill is a horrible mixture of the good and the bad. Because, in the end, it will improve healthcare for many people, it is probably best to pass it and deal with its problems later, but it still remains in large part a god awful measure. Here's a rundown on some of the good and the bad:


The Obamites brag about the bill providing new healthcare for 32 million people:

- In addition, nine million of these, according to the CBO study, are presumed to be people moving to a another form of healthcare - i.e. from their employer based insurance (4 million) or presently non-group insured (5 million) moving to exchanges.

- Half of the improvement (16 million) would be due to improvements in Medicaid and CHIP. You don't need a 2000 page bill to do that.

- Subtract the Medicaid and policy shifters from the calculation and you end up with only about 16 million new people getting insurance. And this is not, for the most part, because the Democrats are providing it (although there will be tax credits to help some). A big reason will be a hidden tax known as the individual mandate. Thus Obama and the Democrats are claiming credit for giving people something when they are instead requiring them to do it with their own funds. This would be like claiming credit for increasing millions of people's incomes by reinstituting the draft.

- In sum, about 16 million people are being substantially helped and about the same number are being manipulated into thinking they are getting more than they are.


The individual mandate is unconstitutional. As constitutional attorney David Rivkin has explained, it goes far beyond the standard judicial excuse of regulating interstate commerce: "What's unique is the mandate [is] imposed on individuals merely because they live - not connected with any economic activity, not because they grow something, make something, compose something. Merely because they live. And this is absolutely unprecedented." Even when the government decided to ban drinking during Prohibition, it at least had the decency to pass a constitutional amendment.

Although the Democrats and the media don't want to talk about it, it's worth noting that even the Congressional Research Service would only go as far as to say that Congress "may have" the power to impose mandates but also called it the "most challenging question" of the measure.

If this provision is upheld in the courts, nothing would prevent the government from, for example, ordering people above a cetain BMI to buy memberships in private health clubs and to attend them at least three times a week.


By requiring new insurance from inefficient private providers instead of through a government program, the administration is subsidizing the insurance cabal by billions of dollars. Further, even though the public option provision fell far short of what it should have been, Obama's back room deal with the industry to knife it is one of the strongest reasons why he should not be encouraged to run again for president.


An amazing number of provisions won't go into effect for four to nine years. One of the problems with this is that if, during this period, the GOP gains control of the Congress, there is nothing to stop them from stalling these programs further. In addition, the Democrats are playing an extraordinarily dangerous political game - taking immediate credit for things that may not happen for years to come. In fact, the first significant benefits to anyone will not occur for four years according to the CBO calculations.

For example, not until 2014 would employers be banned from denying coverage or providing higher premiums for women or older people. What if our civil rights laws had been written that way, say, giving restaurants four more years to ban blacks?


The reconciliation bill includes additional Medicare drug funding, closing the so-called doughnut hole in coverage.


Business Week: "Already in the Senate bill, a higher Medicare payroll tax will be assessed on individuals who make more than $200,000 a year or families with income of more than $250,000. The reconciliation bill includes an additional 3.8 percent Medicare tax on unearned income such as dividends on these high earners."


Business Week: "Under the Senate bill, if an employer with more than 50 employees doesn't offer coverage and has just one employee who qualifies for a new tax credit, the company must pay a fee for every full-time employee on its roster. The reconciliation bill raises the penalty to $2,000 from $750, though it subtracts the first 30 employees from the calculation.


Not currently addressed in the bill.


The liberal Center for Budget Policy & Priorities claims that "this legislation [will] produce the greatest gains in health coverage since the enactment of Medicare and Medicaid 45 years ago." This is an insult to Medicare and Medicaid, which were, after all, public programs and not regulations. There is a huge difference between providing someone with something and ordering them to buy it.


The legislation includes a flagrantly anti-constitutional provision, as described by the CBPP:

[] The legislation would establish an Independent Payment Advisory Board to develop and submit proposals to slow the growth of Medicare and private health care spending and improve the quality of care. The President would nominate the board's 15 members, who would require Senate confirmation, for staggered six-year terms.

If the projected growth in Medicare costs per beneficiary in 2015 and thereafter exceeded a specified target level which it almost certainly would do in many years the board would be required to produce a proposal to eliminate the difference. The board could not propose increases in Medicare premiums or cost-sharing or cuts in Medicare benefits or eligibility criteria; it would focus on proposals for savings in the payment and delivery of health care services.

The board's recommendations would go into effect automatically unless both houses of Congress passed, and the President signed, legislation to modify or overturn them. If the board recommended changes that the President supported, the President could veto any congressional attempt to block them, and a two-thirds vote of both the House and Senate would be required to override the veto.[]

This provision is contemptuous of the basic concept of our constitutional government.


One of the big sleepers in the bill is the plan to "institute efficiencies" in Medicare programs. In fact, Medicare is far more efficient than any private insurance plan in the country.

Consider this snippet from CBPP: "The legislation would reduce annual payment updates to hospitals, skilled nursing facilities, hospices, ambulatory surgical centers, and certain other providers to account for improvements in economy-wide productivity. It would also reduce payments to home health agencies, skilled nursing facilities, and inpatient rehabilitation facilities." And just what will happen to service and its availability?

Remember: one person's efficiency is another's lack of service.


CBPP - Within months, insurers that offer coverage of policyholders' children (including in existing plans) would be required to allow adult dependents younger than 26 to be added to such coverage. In addition, new insurance plans would be barred from excluding children's pre-existing conditions from coverage and would have to cover certain preventive services at no charge to enrollees.


Saving the best until last. As the CBPP puts it:

"The plan would expand Medicaid up to 133 percent of the poverty line for all children and adults younger than 65 who are lawfully residing in the United States and not eligible for Medicare. This would mean that millions of low-income parents, as well non-disabled low-income adults who do not have dependent children (and who are generally ineligible for Medicaid today except in a small number of states with waivers), would become newly eligible for health coverage through Medicaid. Medicaid is the most cost-effective way to provide comprehensive and affordable coverage to people with very low incomes and thereby ensure that the low-income uninsured gain coverage. "


The bill will provide about 16 million poor people with significantly better health care. It will force another nine million or so to buy health insurance, softened by tax credits.

It will put some restrictions on the insurance companies in return for providing them a multi-billion dollar annual subsidy.

It will declare the right of the government to order you to buy something whether you want it or not, and will it establish a budget commission with supra-constitutional powers. Both these provisions would be struck down by a rational Supreme Court (such as we haven't seen in some time) or the Constitutional shall have to be "deemed" substantially amended.