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Pickett's Charge: President Obama's speech on Wednesday was anything but the game-changer congressional leaders desperately needed. He offered not a single new idea, and he trashed bipartisanship by suggesting his health overhaul be passed through the ultra-partisan reconciliation process.
The Washington Examiner aptly called this all-or-nothing gambit "Pickett's Charge."
Worse, the president argued for his plan by dusting off the same arguments he's been using for a year but which have since been discredited by numerous independent studies - that you can keep your current coverage, health costs will be lower, and the deficit is reduced.
Let's look at these three examples:
President Obama: "If you like your plan, you can keep your plan."
The steep cuts in Medicare Advantage he supports would mean at least one-third of seniors could lose their comprehensive Medicare Advantage coverage as their plans are forced to withdraw from the program, cut their benefits, or raise premiums. In addition, at least 10 million people with employer-sponsored insurance could lose their current coverage, according to the Congressional Budget Office.
Mr. Obama himself acknowledged at last week's health reform summit that "eight to nine million people…might have to change their coverage."
President Obama said his plan will "bring down the cost of health care for millions - families, businesses, and the federal government."
CBO says health insurance premiums will continue their steady upward climb under the Senate bill. Families purchasing insurance in the individual market would see an increase of $2,100 in the year 2016, over and above increases they already will be facing. That means those families would be paying $15,200 in 2016 for health insurance if the Senate bill passes, and $13,100 if it doesn't.
Families who get health insurance through small businesses will be paying $19,200 in six years, and those working for large firms, $20,100.
PricewaterhouseCoopers released a study, commissioned by America's Health Insurance Plans, which showed the cost of a family plan in 2019 would be $4,000 a year higher if reform passes.
And Chief Medicare Actuary Rick Foster estimates that, under the Senate bill, "Federal expenditures would increase by a net total of $279 billion" between 2010 and 2019.
So his plan would cost families, businesses, and the federal government more, not less.
President Obama says his plan "brings down our deficit."
Congressional leaders hammered the CBO into submission as they drafted their legislation, using the CBO's scoring tactics against them to pretend the legislation reduces the deficit. But former CBO Director Doug Holtz-Eakin concludes the bills "can claim to be deficit-neutral only because during its first decade it offers 10 years of taxes compared with six years of subsidies.
"The Republican staff of the Senate Budget Committee estimates that, fully implemented, Democratic legislation would cost $2.4 trillion over 10 years, nearly three times the cost projected by the Congressional Budget Office," Holtz-Eakin said. This would significantly expand, not shrink, the deficit.
Further, CBO shows the Senate bill double-counts Medicare savings. Savings to the Medicare program "would be received by the government only once ... they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs."
Medicare Chief Actuary Richard Foster makes the same point: A series of accounting maneuvers makes it appear that Medicare's Part A trust fund would be in better shape under the Senate bill that is the basis of the president's plan, but that's not so. "In practice, the improved Part A financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansion under [the Senate bill]) and to extend the trust fund," Foster writes.
Further, Foster says that making the cuts to Medicare that the Senate bill requires in order to get its deficit score would "represent an exceedingly difficult challenge."
So just on these three examples - keeping your current coverage, lowering costs, and reducing the deficit - the president is wrong. It is though he simply dusted off the same speech he has been giving for a year, using arguments that have been proven as inaccurate by independent studies and analyses, and hoping that maybe, just maybe, this time the speech will work.
The president and his aides may twist arms and torture Congress into passing ObamaCare, but the more he tries to force this into law, the more the American people will reject it. The White House is dreaming if they think people will ultimately accept a plan they clearly oppose.
Ryan's Charge: Our video of the week features remarks by Rep. Paul Ryan at last week's summit that is a must-view if you haven't seen it. The Wall Street Journal today publishes excerpts from his point-by-point critique of the claims the president is making about his health plan.
In the paper's lead editorial, "Paul Ryan v. the President," also today, the Journal concludes, "The President was (miraculously) struck dumb by Mr. Ryan's critique."
It was an astonishing moment. Neither the president nor his advisers laid a glove on Ryan's fact-based analysis.
Ryan absolutely agreed that health reform is essential -- for individuals and families, businesses, and the government -- but he cited independent analyses of the Senate bill (which is the basis for Mr. Obama's plan) that show, "This bill does not control costs. This bill does not reduce deficits. Instead, this bill adds a new health care entitlement when we have no idea how to pay for the entitlements we already have." And he added, "It bends the cost cure up, not down."
The American people are engaged as never before in the health reform debate. They are focusing on the details. They know that the numbers just don't add up and that the legislation itself breaks the promises the president is making.
White House Press Secretary Robert Gibbs said today the next step is for the House to pass the Senate bill so the process of reconciliation can move forward. The President says he wants this to happen by March 18 - two weeks from now.
The American people are watching in utter amazement.
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In This Issue
Commentary by
Grace-Marie Turner
Clip of the Week
Featured Articles
GALEN IN THE NEWS
HEALTH REFORM
COMPARATIVE EFFECTIVENESS
STATE INITIATIVES
Events
SAVE THE DATE!
Intelligent Health: Exploring the value of innovation in health care
Galen Institute Conference
Thursday, March 25, 2010
8:30am - 1:00 pm
Washington, DC
Better Care -- Lower Costs: Exploring the Promise of Patient Engagement
Alliance for Health Reform Briefing
Friday, March 5, 2010
12:15 pm - 2:00pm
Washington, DC
First Annual CQ HealthBeat Conference
CQ-Roll Call Event
Tuesday, March 9, 2010
7:00 am - 1:30 pm
Washington, DC
Health Reform and Women's Health Issues
George Washington University Event
Tuesday, March 9, 2010
12:00 pm - 1:00 pm
Washington, DC
Are Your Medicines Safe?
Stockholm Network Webinar
Wednesday, March 10, 2010
9:00am EST
Health Care Round Table
Independence Institute and The Heartland Institute Event
Wednesday, March 10, 2010
2:00 pm - 5:00 pm
Denver, CO
Medicaid Everyone Can Count On: Public Choices for Equity and Efficiency
American Enterprise Institute Book Forum
Thursday, March 11, 2010
9:30am - 11:30am
Washington, DC
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CLIP OF THE WEEK Grace-Marie Turner on the Blair House summit Between President Obama's "new" health plan and the Blair House health care summit, this week has been a busy one in the health reform debate. In this video, Grace-Marie Turner outlines the president's plan, compares his plan to the current House and Senate proposals, and discusses the impact of the health summit. Look for more original audio/video content from the Galen Institute in the future, in Health Policy Matters and on the Health Reform Hub! 
More video and audio clips are available on the Health Reform Hub >> back to top GALEN IN THE NEWS A Far Cry From Argentina Grace-Marie Turner, Galen Institute
National Review Online: Critical Condition, 03/03/10 Turner responds to Howard Fineman's Newsweek column about the hospital care he received during his recent trip to Argentina. Fineman was treated at a private hospital where he "got great care at a tiny fraction of what the cost would have been in the U.S." and notes that "most Argentines rely on a rickety public system" while those who are "better off rely on private, for-profit hospitals." Two-tier medical care is what most socialized health systems produce, Turner writes. There's a rickety public system with waiting lines and limited access to new technologies, while those who can afford to pay privately buy their way out. The real solution in the U.S. is to give people an incentive to understand the cost of the care they are receiving and get the best value, Turner writes. And that is precisely the opposite of the approach that Congress is currently taking with its health overhaul legislation, turning us instead toward a system of government control that will inevitably lead to the two-tier medicine that we see in other countries that have traveled this path - and that those who support this legislation surely would decry. Read More » Reform Is Best Left to the States Anyway Grace-Marie Turner, Galen Institute
Investor's Business Daily, 02/25/10 The focus of the health reform debate is likely to shift yet again to the states where policymakers can find examples of state-level health policy experiments that have proven successful in expanding access to coverage and getting costs under control, Turner writes. For example, Idaho has devised a novel solution to the problem of insuring people with pre-existing conditions by creating a high-risk reinsurance pool. The plan is funded by taxes and premiums paid by insurance carriers. More than 1,400 Idaho residents with pre-existing conditions who might otherwise have gone without insurance now have coverage as a result of the program. The federal government's main job should be to get the incentives straight so private-sector solutions and state initiatives can emerge to make health care and coverage more affordable and accessible. The right answer is to take a step-by-step approach to reform and engage the states as active partners in the process. Read More » The Next Health Fight Grace-Marie Turner, Galen Institute
New York Post, 02/27/10 Last week's health care summit was not the game-changer the White House hoped it would be, Turner writes. Thursday's dialogue helped the American people see the wide ideological differences - and made it plain that Republicans simply don't believe it is possible to fix the Democrats' bills, because the specter of government control is woven into their fabric. Democrats, meanwhile, strongly distrust the market and will never agree to the competition-based ideas that are integral to the Republicans' reforms. Democratic leaders realize they may be unable to muster the votes to pass their 2,700-page bill; they're contemplating taking a rifle-shot approach to pass parts of ObamaCare, piece by piece. But that's at least as risky - because it will take longer, and allow scrutiny on the costs and intrusiveness of each part of their plan. Read More » Washington-Knows-Best the Wrong Approach to Health Care Reform Grace-Marie Turner, Galen Institute
The Daily Caller, 03/01/10 President Obama could have used last week's health care summit as an opportunity to redefine success by agreeing to incremental steps through a targeted, small bill, Turner writes. Such an approach would garner bipartisan support and could pass Congress. But Senate Majority Leader Harry Reid says he is ready to pursue the ultra-partisan path of reconciliation. This route is wrought with political peril for Democrats as they would be betting that their constituents will suddenly share their belief that with health reform, Washington knows best. Read More » back to top HEALTH REFORM The Obama Administration's Proposed 2.9% "HI" Surtax Would Harm the Economy and Lose Revenue Stephen J. Entin and Michael Schuyler, IRET and Gary Robbins, Fiscal Associates
Institute for Research on the Economics of Taxation, 03/01/10 President Obama has recommended imposing a 2.9% "HI" surtax on "passive income" (income from saving and investment) to help fund his health insurance overhaul, Entin et al write. Social Security taxes for retirement and taxes for medical programs for the elderly have always been levied on wages, as a form of social insurance. Extending the Hospital Insurance tax to income from savings would be a sharp departure from previous practice and very bad economics. The authors estimate that the proposed surtax will depress capital formation, GDP, and wages. The resulting loss of income, payroll, corporate, excise, and other taxes will offset the assumed revenue gains. The wage depression will affect all income levels, and the tax burden will not be confined to the top income earners. Read More » Democrats, Republicans Begin Scheming Reconciliation Strategy Donald Lambro
Human Events, 03/02/10 Lambro provides a concise guide to the reconciliation process that Democrats are plotting to use in a last ditch bid to ram their unpopular health care bill through the Senate. While Democratic leaders, eager to use whatever means are necessary to break the GOP's blockade, have peddled the end-run process as a fast-track maneuver to muscle the president's massive $1 trillion bill into law, it is anything but that. "This process is not designed to do a lot of policy making and it would be very difficult to achieve a number of things that people want to achieve" in health care reform, said Robert Dove, former Senate parliamentarian. Read More » ObamaCare with Lipstick John Goodman, National Center for Policy Analysis
John Goodman's Health Policy Blog, 03/03/10 The two most serious defects of ObamaCare were never discussed at the Health Care Summit or in the President's speech yesterday, Goodman writes. During the summit, Republicans should have said that rational health reform is impossible unless you subsidize all insurance equally - regardless of where it is obtained. Republicans also should have pointed out that health reform is no bargain if it imposes on the middle class the same marginal tax rates that high-income earners faced during the years of stagflation. Since the Republicans chose instead to focus on matters of far less seriousness, Obama is now offering to make minor concessions on the issues the Republicans did bring up and call the whole effort a "bipartisan compromise." Read More » Back to the ObamaCare Future The Wall Street Journal, 03/01/10 Massachusetts is teaching the country a valuable lesson in how not to reform health care, The Wall Street Journal writes. The bills for "universal coverage" are now coming due, and it appears the state political class is prepared to do lasting damage to one of America's top-flight health care systems. Last month, Democratic Governor Deval Patrick landed a neutron bomb, proposing hard price controls across almost all Massachusetts health care. State regulators already have the power to cap insurance premiums, which Mr. Patrick is activating. He also filed a bill that would give state regulators the power to review the rates of hospitals, physician groups and some specialty providers. Those that are deemed too high "shall be presumptively disapproved." The goal is to engineer a cheaper system through brute force so government can pay for health care for all. All of this is merely a preview of what the entire country will face if Democrats succeed with their plan to pound ObamaCare into law in anything like its current form. Read More » Read more about health reform proposals on the Health Reform Hub >> back to top COMPARATIVE EFFECTIVENESS The Impact of Comparative Effectiveness Research on Health and Health Care Spending Anirban Basu and Tomas J. Philipson, University of Chicago
National Bureau of Economic Research, 01/10 Comparative effectiveness research (CER) may well increase spending and adversely affect patient health, write Basu and Philipson. Their analysis of the impact of CER-responsive subsidies suggests that a better understanding is needed as to how CER should be stratified towards obtaining the right treatments for the right subpopulations rather than focused on the best treatment for all patients. There may not be a "one size fits all" for the entire patient population so having reimbursement based on such a policy induces inefficiencies. In particular, their analysis suggests that data generated by CER should not only consider aggregate measures of response but more individualized measures beyond standard demographics such as gender, age, or race. Read More » Read more about comparative effectiveness issues on the Health Reform Hub >> back to top STATE INITIATIVES Hoosiers and Health Savings Accounts Gov. Mitch Daniels
The Wall Street Journal, 03/01/10 Individually owned and directed health care coverage has a startlingly positive effect on costs for both employees and the state, writes Governor Daniels. Five years ago, Gov. Daniels asked that health savings accounts be added to the conventional plans then available to state employees. The HSA option has proven highly popular. This year, over 70% of Indiana's 300,000 state workers chose it, by far the highest in public-sector America. State employees enrolled in the consumer-driven plan will save more than $8 million in 2010 compared to their coworkers in the old-fashioned preferred provider organization alternative. HSA customers seem highly satisfied; only 3% have opted to switch back to the PPO. In a time of severe budgetary stress, Indiana will save at least $20 million in 2010 because of its high HSA enrollment. Read More » Read more about state initiatives on the Health Reform Hub >> |
