Now that President Obama has signed into law the massive health care overhaul legislation that was passed by the House of Representatives on Sunday night, it’s time to start noting what will no doubt be a fantastic series of unintended consequences of the legislation. Granted, I could probably turn this into a regular feature on the PowerBlog, akin to my series of Global Warming Consensus Alert posts. But I have a feeling that documenting the ongoing degradation of the health care sector in that manner would only lead to a radically deepening depression for me, so for the sake of my mental health I’ll just note the occasional bit of news on the matter without formalizing it.
Nov 222009
Staffers on Capitol Hill were calling it the Louisiana Purchase.
On the eve of Saturday’s showdown in the Senate over health-care reform, Democratic leaders still hadn’t secured the support of Sen. Mary Landrieu (D-La.), one of the 60 votes needed to keep the legislation alive. The wavering lawmaker was offered a sweetener: at least $100 million in extra federal money for her home state.
And so it came to pass that Landrieu walked onto the Senate floor midafternoon Saturday to announce her aye vote — and to trumpet the financial “fix” she had arranged for Louisiana. “I am not going to be defensive,” she declared. “And it’s not a $100 million fix. It’s a $300 million fix.”
It was an awkward moment (not least because her figure is 20 times the original Louisiana Purchase price). But it was fairly representative of a Senate debate that seems to be scripted in the Southern Gothic style. The plot was gripping — the bill survived Saturday’s procedural test without a single vote to spare — and it brought out the rank partisanship, the self-absorption and all the other pathologies of modern politics. If that wasn’t enough of a Tennessee Williams story line, the debate even had, playing the lead role, a Southerner named Blanche with a flair for the dramatic.
After Landrieu threw in her support (she asserted that the extra Medicaid funds were “not the reason” for her vote), the lone holdout in the 60-member Democratic caucus was Sen. Blanche Lincoln of Arkansas. Like other Democratic moderates who knew a single vote could kill the bill, she took a streetcar named Opportunism, transferred to one called Wavering and made off with concessions of her own. Indeed, the all-Saturday debate, which ended with an 8 p.m. vote, occurred only because Democratic leaders had yielded to her request for more time.
Even when she finally announced her support, at 2:30 in the afternoon, Lincoln made clear that she still planned to hold out for many more concessions in the debate that will consume the next month. “My decision to vote on the motion to proceed is not my last, nor only, chance to have an impact on health-care reform,” she announced.
Landrieu and Lincoln got the attention because they were the last to decide, but the Senate really has 100 Blanche DuBoises, a full house of characters inclined toward the narcissistic. The health-care debate was worse than most. With all 40 Republicans in lockstep opposition, all 60 members of the Democratic caucus had to vote yes — and that gave each one an opportunity to extract concessions from Senate Majority Leader Harry M. Reid.
Sen. Ron Wyden (D-Ore.) won a promise from Reid to support his plan to expand eligibility for health insurance. Sen. Ben Nelson (D-Neb.) got Reid to jettison a provision stripping health insurers of their antitrust exemption. Landrieu got the concessions for her money. And Lincoln won an extended, 72-hour period to study legislation.
And the big shakedown is yet to occur: That will happen when Reid comes back to his caucus in a few weeks to round up 60 votes for the final passage of the health bill.
Republicans also knew that a single defection would kill the bill, so they tried to pressure the holdouts. “That’s what we’ve got to choose today: Do we choose life or do we choose death?” declared Sen. Sam Brownback (R-Kan.). “We just need one vote, one vote on the other side.”
But Landrieu had already made up her mind. She went to the floor during the lunch hour to say that she would vote to proceed with the debate — but that she’d be looking for much bigger concessions before she gives her blessing to a final version of the bill.
“My vote today,” she said in a soft Southern accent that masked the hard politics at play, “should in no way be construed by the supporters of this current framework as an indication of how I might vote as this debate comes to an end.” Among the concessions she’ll seek: more tax credits for small business and a removal of the version of the “public option” now in the bill.
That turned all the attention to the usually quiet Lincoln, who emerged from the cloakroom two hours later to announce her decision. Her attire was school-principal prim — blue suit with knee-length skirt, orange silk scarf tied tightly at the neck — and she was clearly uncomfortable in the spotlight. She spoke with the diction of somebody giving a dramatic reading, and she stumbled more than once as she read, botching the crucial line: “I will vote to support, of, the, the, will vote in support of cloture on the motion to proceed to this bill.”
She argued, a bit too strenuously, that “I’m not thinking about my reelection” in 2010. All the same, she made clear that Democratic leaders would have to give more if they want her to vote yes as the health-care debate continues. Specifically, she demanded removal of the public option. “I am opposed to a new government-administered health-care plan,” she warned, further cautioning that “I will not vote in favor of the proposal . . . as it is written.”
By the time this thing is done, the millions for Louisiana will look like a bargain.
http://www.washingtonpost.com/wp-dyn/content/article/2009/11/21/AR2009112102272_pf.html
Nov 082009
The tax provisions in the healthcare proposals will impose considerable damage without raising much revenue. Higher income tax rates on investors and entrepreneurs in the House legislation will reduce incentives to be productive and also increase incentives for evasion and avoidance. The tax on high-cost insurance plans and medical devices in the Senate plan also will not generate the expected revenue since people and companies will change their behavior.
There also is little reason to expect that politicians in the future will be willing to control Medicare spending, so projected offsets of more than $500 billion are highly unlikely.
Finally, a bigger public sector has negative implications for public finances. Higher levels of government spending will drain resources from the productive sector of the economy, undermining economic vitality. Additionally, the plans result in large implicit marginal tax rates of nearly 70 percent because of the phase-out of insurance subsidies. So even taxpayers with modest incomes will face a staggering penalty on upward mobility that will hinder overall economic performance.
Fiscal responsibility is achieved by limiting the size of government. The President and his congressional allies, however, claim that big increases in government spending are prudent so long as there are equally large increases in the tax burden. But that’s like a doctor trying to fix a broken left leg by breaking the right leg as well.
Obamacare Will Balloon Future Deficits – Dan Mitchell, RealClearMarkets
Also, Obama Won’t Admit He’s Raising Taxes – Jacob Sullum, Washington Times
The health-insurance industry has finally revealed itself for what it is. Background: The industry hates the idea that’s emerged from the Senate Finance Committee of lowering penalties on younger and healthier people who don’t buy insurance. Relying on an analysis by PricewaterhouseCoopers, insurers say this means new enrollees will be older and less healthy — which will drive up costs. And, says the industry, these costs will be passed on to consumers in the form of higher premiums. Proposed taxes on high-priced “Cadillac” policies will also be passed on to consumers. As a result, premiums will rise faster and higher than the government projects.
It’s an eleventh-hour bombshell.
But the bomb went off under the insurers. The only reason these costs can be passed on to consumers in the form of higher premiums is because there’s not enough competition among private insurers to force them to absorb the costs by becoming more efficient. Get it? Health insurers have just made the best argument yet about why a public insurance option is necessary.
Right now they run their markets and set their prices, and pass on any increased costs directly to consumers. That’s what they’re threatening to do if the legislation attempts to squeeze, even slightly, the colossal profits they plan to make off of thirty million new paying customers.
They want every penny of those profits. They demand every cent. And if the government dares raise their costs a tad higher than they expected when they first signed on to support the bill, they’ll pass those costs on to consumers in the form of higher premiums. They can carry out their threat only because they have unaccountable, untrammeled market power.
But they’ve now hoisted themselves on their own insured petard. They’ve exposed themselves. If they had to compete with a public insurance plan, they couldn’t get away with this threat. They couldn’t pass on the extra costs. They’d have to compete with a public insurance option that forced them to give consumers the best deals possible.
Now’s the time for Senate Finance Committee and the White House to say to the insurance industry: You want to play hardball? Okay. We’ll play it, too. You didn’t want a public insurance option. That was one of your conditions for supporting the bill. You wanted gigantic profits from having thirty million new paying customers and the market to yourself. We agreed because we wanted your support and were afraid of the negative ads and hurricane of opposition you could finance. But you’re even greedier than we imagined. And now you’ve demonstrated that greed to the American people. They don’t want to turn over even more of their hard-earned money to you. So, insurance companies, we’ve got news for you. We’re going to make sure Americans have the freedom to choose a public insurance option that’s cheaper and better, and you’re going to have to work hard to keep them your customers.
Originally published at Robert Reich’s Blog
We all encounter more than our share of foolish blog posts. Most of the time you simply have to let them be. You could spend the rest of your life correcting drones and automatons who will never have an original or unconventional thought no matter how much you prod them. Their seventh-grade teacher, who was also the track coach, taught them what they know, and they’re sticking to it.
Once in a while, though, for your own sake and for the sake of readers who suspect the post is all wrong but aren’t quite sure why, you let loose with a full-blown response. And that’s what I’m doing here in reaction to a blog entry called “Peter Schiff: Medicare Recipients Are Lazy People Who Refuse to Pay for Their Own Health Care.”
This is longer than my usual pieces, but I hope I am not trying the reader’s patience too much. In block quotes are the words of a blog author who identifies himself, interestingly enough, simply as “Che.”
Here we go.
Mises Daily by Thomas E. Woods, Jr. | Posted on 9/10/2009 12:00:00 AM
On the U.S. EconoMonitor, Robert Reich looks at the composition of the Senate Finance Committee and questions why so much power for deciding the future of health care is concentrated in six senators (three Republican and three Democrat) hands. See Why the Gang of Six is Deciding Health Care for Three Hundred Million of Us .
Misleading Or False Claims Rampant in Health Debate
You’ve heard competing versions of what the various health care proposals would actually do if they become law. A close look at the rhetoric around this summer’s hot issue shows a wide range of claims that are misleading or flat-out wrong.
The Public Option – A Perspective from Acton Institute
Imagine You Are a Doctor By Hunter Baker
Hunter Baker examines the push for the “public option” — the creation of a government backed insurance system — as part of health care reform. “Simply because it is possible that a majority may be found who think this scheme is a good idea,” Baker writes, doctors “may lose all the benefits” of offering their services in a free economy.
Democratic lawmakers welcomed news of slightly improved July jobless numbers Friday, crediting the stimulus package enacted earlier this year and vowing to pursue more relief efforts in the months to come. [Read More]
According to the Catholic Medical Association, all current House and Senate health reform bills will make things worse with respect to ethics, costs, personal control and even the quality of medical care.
The government’s initial step in attempting to create a government-run healthcare monopoly has been to propose a law that would eventually drive the private health insurance industry out of existence. Additional taxes and mandated costs are to be imposed on health insurance companies, while a government-run “health insurance” bureaucracy will be created, ostensibly to “compete” with the private companies. The hoped-for end result is one big government monopoly which, like all government monopolies, will operate with all the efficiency of the post office and all the charm and compassion of the IRS.
Of course, it would be difficult to compete with a rival who has all of his capital and operating costs paid out of tax dollars. Whenever government “competes” with the private sector, it makes sure that the competition is grossly unfair, piling costly regulation after regulation, and tax after tax on the private companies while exempting itself from all of them. This is why the “government-sponsored enterprises” Fannie Mae and Freddie Mac were so profitable for so many years. It is also why so many abysmally performing “public” schools remain in existence for decades despite their utter failure at educating children.
America’s Healthcare Future?
Some years ago, the Nobel-laureate economist Milton Friedman studied the history of healthcare supply in America. In a 1992 study published by the Hoover Institution, entitled “Input and Output in Health Care,” Friedman noted that 56 percent of all hospitals in America were privately owned and for-profit in 1910. After 60 years of subsidies for government-run hospitals, the number had fallen to about 10 percent. It took decades, but by the early 1990s government had taken over almost the entire hospital industry. That small portion of the industry that remains for-profit is regulated in an extraordinarily heavy way by federal, state and local governments so that many (perhaps most) of the decisions made by hospital administrators have to do with regulatory compliance as opposed to patient/customer service in pursuit of profit. It is profit, of course, that is necessary for private-sector hospitals to have the wherewithal to pay for healthcare.
Friedman’s key conclusion was that, as with all governmental bureaucratic systems, government-owned or -controlled healthcare created a situation whereby increased “inputs,” such as expenditures on equipment, infrastructure, and the salaries of medical professionals, actually led to decreased “outputs” in terms of the quantity of medical care. For example, while medical expenditures rose by 224 percent from 1965–1989, the number of hospital beds per 1,000 population fell by 44 percent and the number of beds occupied declined by 15 percent. Also during this time of almost complete governmental domination of the hospital industry (1944–1989), costs per patient-day rose almost 24-fold after inflation is taken into account.
The more money that has been spent on government-run healthcare, the less healthcare we have gotten. This kind of result is generally true of all government bureaucracies because of the absence of any market feedback mechanism. Since there are no profits in an accounting sense, by definition, in government, there is no mechanism for rewarding good performance and penalizing bad performance. In fact, in all government enterprises, exactly the opposite is true: bad performance (failure to achieve ostensible goals, or satisfy “customers”) is typically rewarded with larger budgets. Failure to educate children leads to more money for government schools. Failure to reduce poverty leads to larger budgets for welfare state bureaucracies. This is guaranteed to happen with healthcare socialism as well.
Costs always explode whenever the government gets involved, and governments always lie about it. In 1970 the government forecast that the hospital insurance (HI) portion of Medicare would be “only” $2.9 billion annually. Since the actual expenditures were $5.3 billion, this was a 79 percent underestimate of cost. In 1980 the government forecast $5.5 billion in HI expenditures; actual expenditures were more than four times that amount — $25.6 billion. This bureaucratic cost explosion led the government to enact 23 new taxes in the first 30 years of Medicare. (See Ron Hamoway, “The Genesis and Development of Medicare,” in Roger Feldman, ed., American Health Care, Independent Institute, 2000, pp. 15-86). The Obama administration’s claim that a government takeover of healthcare will somehow magically reduce costs is not to be taken seriously. Government never, ever, reduces the cost of doing anything.
All government-run healthcare monopolies, whether they are in Canada, the UK, or Cuba, experience an explosion of both cost and demand — since healthcare is “free.” Socialized healthcare is not really free, of course; the true cost is merely hidden, since it is paid for by taxes.
Whenever anything has a zero explicit price associated with it, consumer demand will increase substantially, and healthcare is no exception. At the same time, bureaucratic bungling will guarantee gross inefficiencies that will get worse and worse each year. As costs get out of control and begin to embarrass those who have promised all Americans a free healthcare lunch, the politicians will do what all governments do and impose price controls, probably under some euphemism such as “global budget controls.”
Price controls, or laws that force prices down below market-clearing levels (where supply and demand are coordinated), artificially stimulate the amount demanded by consumers while reducing supply by making it unprofitable to supply as much as previously. The result of increased demand and reduced supply is shortages. Non-price rationing becomes necessary. This means that government bureaucrats, not individuals and their doctors, inevitably determine who will get medical treatment and who will not, what kind of medical technology will be available, how many doctors there will be, and so forth.
All countries that have adopted socialized healthcare have suffered from the disease of price-control-induced shortages. If a Canadian, for instance, suffers third-degree burns in an automobile crash and is in need of reconstructive plastic surgery, the average waiting time for treatment is more than 19 weeks, or nearly five months. The waiting time for orthopaedic surgery is also almost five months; for neurosurgery it’s three full months; and it is even more than a month for heart surgery (see The Fraser Institute publication, Waiting Your Turn: Hospital Waiting Lists in Canada
). Think about that one: if your doctor discovers that your arteries are clogged, you must wait in line for more than a month, with death by heart attack an imminent possibility. That’s why so many Canadians travel to the United States for healthcare.
All the major American newspapers seem to have become nothing more than cheerleaders for the Obama administration, so it is difficult to find much in the way of current stories about the debacle of nationalized healthcare in Canada. But if one goes back a few years, the information is much more plentiful. A January 16, 2000, New York Times article entitled “Full Hospitals Make Canadians Wait and Look South,” by James Brooke, provided some good examples of how Canadian price controls have created serious shortage problems.
- A 58-year-old grandmother awaited open-heart surgery in a Montreal hospital hallway with 66 other patients as electric doors opened and closed all night long, bringing in drafts from sub-zero weather. She was on a five-year waiting list for her heart surgery.
- In Toronto, 23 of the city’s 25 hospitals turned away ambulances in a single day because of a shortage of doctors.
- In Vancouver, ambulances have been “stacked up” for hours while heart attack victims wait in them before being properly taken care of.
- At least 1,000 Canadian doctors and many thousands of Canadian nurses have migrated to the United States to avoid price controls on their salaries.
Wrote Mr. Brooke, “Few Canadians would recommend their system as a model for export.”
Canadian price-control-induced shortages also manifest themselves in scarce access to medical technology. Per capita, the United States has eight times more MRI machines, seven times more radiation therapy units for cancer treatment, six times more lithotripsy units, and three times more open-heart surgery units. There are more MRI scanners in Washington state, population five million, than in all of Canada, with a population of more than 30 million (See John Goodman and Gerald Musgrave, Patient Power).
In the UK as well — thanks to nationalization, price controls, and government rationing of healthcare — thousands of people die needlessly every year because of shortages of kidney dialysis machines, pediatric intensive care units, pacemakers, and even x-ray machines. This is America’s future, if “ObamaCare” becomes a reality.
Thomas DiLorenzo is professor of economics at Loyola College in Maryland and a member of the senior faculty of the Mises Institute. He is the author of The Real Lincoln, Lincoln Unmasked, How Capitalism Saved America, and, more recently, Hamilton’s Curse
Mises Daily by Thomas J. DiLorenzo | Posted on 7/28/2009
See Also…
Ben Bernanke Was Incredibly, Uncannily Wrong by Lilburne
Keynesians Can’t Predict by L. Albert Hahn
See Also…
Ben Bernanke Was Incredibly, Uncannily Wrong by Lilburne
Keynesians Can’t Predict by L. Albert Hahn
See Also…
Ben Bernanke Was Incredibly, Uncannily Wrong by Lilburne
Keynesians Can’t Predict by L. Albert Hahn
Just this week, Wal-Mart raised eyebrows across the country when it came out supporting an employer health insurance mandate.
Now, Wal-Mart has got to know that its endorsement is probably not good for its profits. Wal-Mart is the country’s biggest employer, with more workers than the US Army.
What’s going on here? Does Wal-Mart, a cut-throat, calculating company when it comes to costs and the competition, know that an employer mandate is even worse for its competition’s profits, and is getting on board to crush its rivals?
An employer health insurance mandate means companies would have to offer health insurance to their workers, no matter what.
The insurance could be paid for with higher taxes, possibly a new form of an 8% payroll tax that companies (translation, workers) would pay. It would mean workers would be enrolled in a low quality HMO type plan that wouldn’t cover the same level of health care costs now incurred.
Before we get to the details of the impact of Wal-Mart’s move, watch this first. Wal-Mart’s support came a day or so before new Congressional Budget office numbers showing the impact on the mushrooming federal deficit of the Senate’s health reform proposal, spearheaded by Democratic Senators Chris Dodd and Ted Kennedy.
The new CBO numbers show the cost of this legislation is now below the $1 tn mark. How does the Senate get there? By not including the costs for expanding Medicaid costs, and because of the employer mandate.
Specifically, according to the CBO, by 2019 the Senate bill will cover 21 mn. That cost comes to about $597 bn. Again, the Senate bill does not include expanding costs for Medicaid. And the new CBO figures doesn’t include the cost of the 15 mn people expected to be enrolled in the employer-mandated coverage.
The CBO’s initial $1 tn plus number that the White House and Democrats in Congress had gulped at, then attacked, had assumed—get this—that employers would dump those 15 mn or so workers onto the US government—meaning, federal taxpayers.
This is a rare admission, a rare bit of candor, a rare acknowledgement of behavioral economics by the CBO. Meaning, a government research body is acknowledging what analysts have been saying all along–that companies would cancel coverage for 15 mn workers employees and shove them off onto the Health Insurance Exchange, where they would then get taxpayer subsidies to buy health insurance.
So, what’s the deal with Wal-Mart and an employer mandate for health insurance? Fox News analyst James Farrell weighs in.
First, Wal-Mart already provides more employee health insurance than its average competitors. Approximately 52% of Wal-Mart’s 1.4 mn U.S. employees are covered by company-provided insurance, while the retail industry average is 45%.
To raise this coverage to 100%, Wal-Mart would have to increase its coverage by 48%, while its average competitor would have to increase their coverage by 55%. Advantage: Wal-Mart.
Second, Wal-Mart has economies of scale that its competitors lack. As a large employer, Wal-Mart already likely pays a lower premium than its competitors with far less employees.
For example, the CBO notes that the share of the health insurance premium that covers administrative costs varies significantly by the size of firms, from about 7% for firms with at least 1,000 employees to a more sizable 26% for firms with 25 or fewer employees.
Requiring employers to provide health insurance to all employees would thus probably cost Wal-Mart less on a per employee basis than its competitors. Advantage: Wal-Mart.
Third, the economies of scale and greater percentage of covered employees would further benefit Wal-Mart if the government mispriced the penalty that it would assess on employers for failing to provide health insurance for its employees.
The government plans to smack companies that don’t participate with a fine, a so called play or pay requirement. The fine could be equal to 8% of pay for each worker not given coverage. Advantage: Wal-Mart.
Follow the math here. If the government prices the penalty lower than Wal-Mart’s average contribution to health insurance per worker, Wal-Mart could just pay the penalty for each employee. Wal-Mart would have to math out its benefits here, taking into account the current cost of insurance coverage and the penalty times the number of employees whose coverage Wal-Mart would be dropping.
Fourth, Wal-Mart has indicated that its endorsement (which will likely be touted by the Administration as evidence of the wisdom of its health insurance reform) is conditioned only upon the ultimate mandate being designed in a way that further advantages Wal-Mart compared to its competitors. Advantage: Wal-Mart.
According to the Congressional Quarterly, Wal-Mart spokesman Greg Rossiter said “that Wal-Mart wanted an employer mandate that would have companies pay in based not on how many employees they have, but based on ‘profit per employee.’”
Wal-Mart has more workers than the US Army, and low-wage employees as well, so you can see why it wanted an employer mandate based on this metric. If an employer mandate was constructed otherwise, Rossiter said, “it certainly could become a disincentive to support it.”
Wal-Mart’s Health Reform Gambit – Elizabeth MacDonald, Fox Business
Health insurance is supposed to offer protection — both medically and financially. But as it turns out, an estimated three-quarters of people who are pushed into personal bankruptcy by medical problems actually had insurance when they got sick or were injured.
And so, even as Washington tries to cover the tens of millions of Americans without medical insurance, many health policy experts say simply giving everyone an insurance card will not be enough to fix what is wrong with the system.
Too many other people already have coverage so meager that a medical crisis means financial calamity.
One of them is Lawrence Yurdin, a 64-year-old computer security specialist. Although the brochure on his Aetna policy seemed to indicate it covered up to $150,000 a year in hospital care, the fine print excluded nearly all of the treatment he received at an Austin, Tex., hospital.
He and his wife, Claire, filed for bankruptcy last December, as his unpaid medical bills approached $200,000.
In the House and Senate, lawmakers are grappling with the details of legislation that would set minimum standards for insurance coverage and place caps on out-of-pocket expenses. And fear of the high price tag could prompt lawmakers to settle for less than comprehensive coverage for some Americans.
But patient advocates argue it is crucial for the final legislation to guarantee a base level of coverage, if people like Mr. Yurdin are to be protected from financial ruin. They also call for a new layer of federal rules to correct the current state-by-state regulatory patchwork that allows some insurance companies to sell relatively worthless policies.
“Underinsurance is the great hidden risk of the American health care system,” said Elizabeth Warren, a Harvard law professor who has analyzed medical bankruptcies. “People do not realize they are one diagnosis away from financial collapse.”
Last week, a former Cigna executive warned at a Senate hearing on health insurance that lawmakers should be careful about the role they gave private insurers in any new system, saying the companies were too prone to “confuse their customers and dump the sick.”
“The number of uninsured people has increased as more have fallen victim to deceptive marketing practices and bought what essentially is fake insurance,” Wendell Potter, the former Cigna executive, testified.
Mr. Yurdin learned the hard way.
At St. David’s Medical Center in Austin, where he went for two separate heart procedures last year, the hospital’s admitting office looked at Mr. Yurdin’s coverage and talked to Aetna. St. David’s estimated that his share of the payments would be only a few thousand dollars per procedure.
He and the hospital say they were surprised to eventually learn that the $150,000 hospital coverage in the Aetna policy was mainly for room and board. Coverage was capped at $10,000 for “other hospital services,” which turned out to include nearly all routine hospital care — the expenses incurred in the operating room, for example, and the cost of any medication he received.
In other words, Aetna would have paid for Mr. Yurdin to stay in the hospital for more than five months — as long as he did not need an operation or any lab tests or drugs while he was there.
Aetna contends that it repeatedly informed Mr. Yurdin and the hospital of the restrictions in policy, which is known in the industry as a limited-benefit plan.
The company says such policies offer value by covering some hospital expenses, like surgeons’ fees or a stay in the intensive care unit. Aetna also says all of its policyholders receive significant discounts on the overall cost of hospital care. But Aetna also acknowledges that a limited-benefit plan was inappropriate in Mr. Yurdin’s case because his age and condition — an irregular heartbeat — made him likely to require more comprehensive coverage.
“Limited benefits aren’t right for everyone, and it clearly wasn’t right for Mr. Yurdin,” said Cynthia B. Michener, an Aetna spokeswoman.
Charles E. Grassley, the ranking Republican on the Senate Finance Committee, which is taking a lead on health legislation, says Congress needs to make “meaningful” insurance coverage more affordable and accessible. But “until that happens,” he said, “any presentation of limited-benefit plans ought to be completely straightforward, and not misleading in any way.”
The Work-Up: Insured, but Driven Bankrupt by Health Crises – NY Times
Jun 242009
In 1993, Hillary and Bill Clinton promised us they had found a way to provide every person in America top-of-the-line (“Fortune-500”) healthcare without raising taxes or blowing a hole in the deficit, all while lowering the share of national income spent on healthcare (then at 13.4 percent of GDP) without rationing care. Alas, they were wrong. Their promises were inconsistent and impossible to fulfill.
HillaryCare was going to cost $1.2 billion dollars a day in 1994. (Read details here. . .) In today’s medical-care dollars, after taking medical-care inflation into account, that amounts to about $2.2 billion a day, or $788 billion a year. If one takes the 16 percent increase in population since 1984 into account, the annual price tag rises to $915 billion; and if the 19 percent increase in medical-care consumption as a share of national income is added to the equation (rising from 13.4 percent to 16 percent since 1993), the annual cost of HillaryCare today would slightly exceed one trillion dollars a year in 2009.
Today, healthcare spending comprises about 16 percent of national income and is projected by the Congressional Budget Office to rise steadily to 31 percent of GDP by 2035. As Hillary did before him, President Obama claims he can comprehensively reform the healthcare system to lower costs and stop healthcare spending from rising as projected. He, as did Hillary, claims to be able to staunch the rapid rise of healthcare spending without resorting to healthcare rationing while simultaneously guaranteeing high-quality healthcare to every American without raising taxes on the middle class and without increasing the federal budget deficit. (He has pledged to cut the federal budget deficit in half, down to $230 billion, by the end of his first term.)
President Obama’s rhetoric is very little different from Hillary’s 15 years ago. Yet, he refuses to put a specific proposal on the table for the American people to review and evaluate, and he is trying to steamroller a proposal put together in the congressional backrooms through the Congress by Labor Day. It’s the old “trust-me” routine.
So, the American public is left with a dilemma: If ObamaCare is really HillaryCare in new packaging, which his rhetoric and promises lead people to believe, his low-ball cost estimate of a trillion dollars over the first ten years is off by a factor of ten. It will actually cost a trillion dollars a year. If, on the other hand he really intends to remain within a budget of $100 billion a year without raising taxes, without rationing healthcare and without increasing the deficit, he has, as Ricky used to tell Lucy, “a lot of e’splainin’ to do.”
So Mr. President, which is it? Will ObamaCare be as good as HillaryCare promised or can’t the president live up to the Clintons’ promise? If not, he has an obligation to tell the American people specifically and in detail how much less they will receive under ObamaCare and how much more they will have to pay for it.
Here Comes O’s Version of Hillarycare – Larry Hunter, Social Security Inst.
When President Obama won approval for his $787 billion stimulus package in February, large sections of the 407-page bill focused on a push for new technology that would not stimulate the economy for years.
The inclusion of as much as $36.5 billion in spending to create a nationwide network of electronic health records fulfilled one of Obama’s key campaign promises — to launch the reform of America’s costly health-care system.
But it was more than a political victory for the new administration. It also represented a triumph for an influential trade group whose members now stand to gain billions in taxpayer dollars.
A Washington Post review found that the trade group, the Healthcare Information and Management Systems Society, had worked closely with technology vendors, researchers and other allies in a sophisticated, decade-long campaign to shape public opinion and win over Washington’s political machinery.
With financial backing from the industry, they started advocacy groups, generated research to show the potential for massive savings and met routinely with lawmakers and other government officials. Their proposals made little headway in Congress, in part because of the complexity of the issues and questions about whether the technology and federal subsidies would work as billed.
As the downturn worsened last year, advocates helped persuade Obama’s advisers to dust off electronic records legislation that had stalled in Congress — legislation that the advocates had a hand in writing, the Post review found.
Their sudden success shows how the economic crisis created a remarkable opening for a political and financial windfall: the enactment of a sweeping new policy with no bureaucratic delays and virtually no public debate about an initiative aimed at transforming a sector that accounts for more than a sixth of the American economy.
“It was perhaps a once-in-a-generation opportunity to make something happen,” said H. Stephen Lieber, the trade group’s president. Obama “identified the vehicle that he could use to move his policy agenda forward without the crippling policy debate.”
http://www.washingtonpost.com/wp-dyn/content/article/2009/05/15/AR2009051503667.html?hpid=topnews
