AT the White House’s urging, Congress is going to try to overhaul Ameri ca’s health-care system — a sixth of the entire US economy — in the next three weeks. The 1,018-page House bill and the 615-page Senate bill are now available for your reading pleasure.
Plenty of juicy and unpleasant details will come dribbling out over the next few days, as analysts and reporters plow through the mind-numbing texts and parse the fine print. But the basic picture is clear — and it’s ugly.
If President Obama signs either bill into law, he’ll be breaking a host of promises. Neither the House nor Senate would guarantee that you can keep your private health plan if you like it. Or that patients will retain their relationships with their doctors.
And that bit about cutting the typical family’s health costs by $2,500 a year? A howler, if there ever was one. Deficit neutrality? Level playing field for plan competition? Fuhgeddaboudit.
Each bill would create a new government health plan to compete against private insurers. In the House version, this “competition” would take place via a “national health insurance exchange,” a new entity run by a “Health Choices Commissioner.” In the Senate, a “public plan” would compete against private health plans through federally supervised state entities called “gateways.”
Either way, taxpayers would assume the risks. The private plans would be heavily regulated by the government, but otherwise “on their own” — in a highly qualified matter of speaking.
In the House bill, the government plan would pay doctors and hospitals on the basis of Medicare rates — rates that are so low that more and more doctors have stopped taking new Medicare patients.
Both bills would force employers to either offer coverage or pay a tax. But some employers who offer good insurance now will likely dump their people into the public plan. Millions of employees would likely wind up with government coverage — and their personal preferences won’t matter.
Under either bill, Congress would broadly determine what kinds of health benefits you get — with the folks at the Department of Health and Human Services filling in the details, not you. That is, bureaucrats would make key decisions about the levels of benefits and medical treatments to be included.
Choice? Sorry, pal. You will be mandated to buy the federal government’s level and kind of health benefits or face penalties. Under the House bill, Congress would require individuals to buy what Congress calls “acceptable” coverage — the insurance that Congress and the bureaucrats say is “acceptable” — or pay a penalty of a 2.5 percent surtax on income.
Employers with payrolls of just $250,000 a year would have to offer acceptable coverage or face a tax penalty, which soars to 8 percent of payroll for firms that pay workers more than $400,000 in total. The revenues from these tax penalties would go to finance coverage in the exchange and the government plan.
Under the Senate bill, all “legal residents” would have to buy the federally approved insurance package, or pay a penalty equal to half the premium for the lowest-cost plan offered by their state “gateway.” The bill would also require firms with 25 or more workers to offer federally approved coverage and cover at least 60 percent of each employee’s premium, or pay a penalty equal to $750 for each full-time employee without coverage.
The price tag for both bills is pretty hefty. Based on the Congressional Budget Office’s initial analysis, the 10-year cost of the House bill is approximately $1.3 trillion. For the Senate bill, the initial estimated cost is $868 billion — with costs expected to jump sharply by 2014, reaching $1.5 trillion in the following 10 years.
In the House bill, about half of the costs will be financed by cuts to Medicare and Medicaid (meaning worse health care for those Americans), and the rest by new taxes — including a new surtax on wealthy households and revenues from the tax penalties on individuals and businesses. Overall, the bill would collect an estimated $818 billion in new taxes over 10 years.
The problem with soaking the rich, though, is that sooner or later you run out of rich people.
These impressive tax and spending schemes, combined with fines and penalties, lie deep in the bills’ complex provisions. The congressional leadership hopes that you, like the lawmakers who passed the giant stimulus bill, won’t read them. Fool them, and find out what they plan to do to you.
Robert E. Moffit is director of Health Policy Studies at The Heritage Foundation (heritage.org.)