The House Bill Is A Terrible Bill For Medical Care And The Economy. Part 2
Stanley Feld M.D.,FACP,MACE
Let us assume it is important to have universal care, affordable healthcare insurance and increase an in quality of care. The House of Representative’s (Pelosi’s) bill will not accomplish these goals. It will provide increased government control over our lives, a loss of freedom of choice, a large increase in our national deficit and increased taxes for all.
The economic impact to the government and the public as well as the implications to our freedom of choice must be understood by everyone. The implications regarding the delivery of medical care must also be understood.
1. The initial defect in the bill is in estimating the cost of the new entitlement. Nancy Pelosi estimates a cost of $829 billion over 10 years.
“Initial Congressional Budget Office (CBO) figures suggested $1.055 trillion. However, the CBO estimates assume that:
- Doctors will accept more than 20% cuts in Medicare payments for their services. President Obama supposedly waived this portion of the bill to obtain the AMA support. It looks like the AMA made a deal with the devil.
- Middle-class Americans will accept an arbitrary distribution of benefits. The distribution of benefits has not been defined. President Obama panel of experts will dictate best practices. The panel has already been funded by the economic stimulus bill. The $30 billion dollars will not be charged to the healthcare reform bill.
- Congress ‘finds’ additional funding in 2017, 2018, 2019 and 2020.”
Entitlement programs are notorious for exceeding budgetary estimates. My guess is the cost will be close to $3 trillion dollars over 10 years if all the bureaucratic costs are included. This cost will force taxes to be increased for all Americans. Additionally, there will be an absolute need for rationing care.
2. The Obama/Pelosi plan is a government takeover of the U.S. Healthcare system. Some Americans want a government takeover because the healthcare insurance industry has been irresponsible in the past during the quest for increased profit. The healthcare insurance industry’s irresponsibility has led to the hospital systems and physicians becoming almost as irresponsible. All of these actions have been to the disadvantage of patients, patient care and affordability of care.
3. The Pelosi bill passed by a very slim partisan majority. The bill dictates that the federal government will tell you what insurance you have to buy, where you have to buy it and what you will pay.
If you refuse to purchase government-approved insurance, the government will assess a penalty tax on 2.5% of your income. Your tax return will be attached to the government mandated insurance just as seniors’ tax returns are attached to Medicare to determine seniors’ yearly means tested insurance premium for Medicare coverage.
The house bill will raise $572 billion in new taxes to be deficit neutral. The majority of the new tax will be charged to small businesses.
“All businesses will have to pay at least 72.5% of their workers’ insurance. If a business does not pay 72.5% of the healthcare insurance premium, it will be charged an additional 8% payroll tax.”
The negative effect of this tax increase will be to decrease job creation by businesses of all sizes and increase the unemployment burden in our jobless recovery.
Americans will be forced out of their current insurance plans into government qualified healthcare plans despite President Obama’s frequent promise that "you can keep your current plan, if you like it.”
By creating yet another massive entitlement program, President Obama will dramatically expand the federal deficit. The plan will significantly increase the size of the burden of the federal government’s unfunded liabilities.
The burden to consumers will be just as massive. In addition to increases in taxes to small businesses, there will be increases in taxes to all consumers, even those making under $250,000 a year. Consumer healthcare insurance premiums will be means tested as Medicare premiums are.
“ The Congressional Budget Office estimated what the government qualified healthcare plans will likely cost. An individual earning $44,000 before taxes who purchases his own insurance will have to pay a $5,300 premium and an estimated $2,000 in out-of-pocket expenses, for a total of $7,300 a year, which is 17% of his pre-tax income.”
If consumers have to pay for their healthcare insurance premiums with after tax dollars the real price will be at least 30% higher.
“ A family earning $102,100 a year before taxes will have to pay a $15,000 premium plus an estimated $5,300 out-of-pocket, for a $20,300 total, or 20% of its pre-tax income.”
“ Individuals and families earning less than these amounts will be eligible for subsidies paid directly to their insurer.”
A reader sent me this note expressing his frustration.
The House bill passed last Saturday is so remarkably bad. Hopefully it will wake up the entire citizenry to realize what is about to happen to all of us. Certainly very few will have the time or stamina to read the entire bill but there have already been enough headlines and short summaries to inform anyone who cares about the consequences to see the bill for what it is and reject it.
In all of this I am aghast about the willingness of the members of congress to allow President Obama to lead them by their noses. Why is Congress willing to give up its prerogative to be the legislative branch and subjugating itself to the executive branch?
The members of congress need to reread the Constitution and also remember they are to be representatives of their constituents, not lapdogs for this or any other president.
Furthermore, it is very cheeky for Obama especially to goad Congress to vote on a short timetable on a matter so important since he seldom voted on any bill when he was a member of the Senate.
The house consensus bill is hardly an affordable healthcare bill. Premiums will not be affordable. The tax increases necessary will decrease job creation at a time our country needs to stimulate job creation. I encourage everyone to say enough is enough. Please write or call your representatives and express your displeasure.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.
shadowfax • November 22, 2009
“The Obama/Pelosi plan is a government takeover of the U.S. Healthcare system.”
Seems to me that you’re writing for an audience that already has the same opinions you do. So if you’re just trying to preach to the choir, never mind.
Statements like the above pretty much cause you to lose any credibility in the eyes of serious correspondents interested in policy. I’d ordinarily ask you to explain or substantiate such a claim, but it’s right up there with: “You know who else liked government run health care? Hitler.” It’s such a vapid and disingenuous claim that it’s not worthy of argument.
“By creating yet another massive entitlement program, President Obama will dramatically expand the federal deficit.”
Here’s another example of sloppy thinking (charitably assuming it’s not deliberate dishonesty). Both the House and the Senate bill are deficit-reducing, and not by small amounts. I suppose you can argue that the CBO is biased or the asssumptions are wrong or that Congress will spend more money than is budgeted or something — but you don’t make that argument, do you? You just make a simple decarative statement which is directly counter-factual with no explanation or qualification. Furthermore, you seem confused as to what an “entitlement” is. There is no new entitlement created in the HCR bills. There are subsidies and tax credits, and I suppose if you redefine “entitlement” as “anytime the government pays for something” then that could be correct. That definition, however, is inconsistent with the common policy usage of that term.
“Consumer healthcare insurance premiums will be means tested”
Actually the premiums are not means tested; they are actuarially set and community rated. The subsidies are means tested, which is a good thing. I hope that even you would admit that if you are going to subsidize, that less needy families should recieve lower levels of support.
“If consumers have to pay for their healthcare insurance premiums with after tax dollars the real price will be at least 30% higher.”
Are you unaware that in the current system that consumers buying individual policies already are doing so with after-tax dollars?
I’d go on with the other bits of inaccuracy and demagoguery in this piece and the others on this blog, but I’m not sure that there’s any point.