Thursday, November 5, 2009

The House Bill Should Be Defeated on Saturday

Here's the email I just sent my Congressman, freshman "Blue Dog" Frank Kratovil of Maryland:
Please vote no this weekend on the House bill.

This is not health care reform.

This is at least a $1 trillion entitlement expansion paid for half with only modest provider cuts and $500 billion in taxes.

Real cost containment would bend the curve and produce the savings needed to accomplish universal access.

Being roughly deficit neutral, as its sponsors claim, is not enough. We are at 17% of GDP today and we would still be spending at least 22% of GDP in 2018 if this "deficit neutral" bill were to be passed. Real reform would begin to bring costs down to affordable levels.

The bill's subsidies do not deliver affordable health insurance to the middle class. A family of four making $65K would still have to pay $6,500 a year toward their health insurance net of subsidies. How many such families have that kind of money in their checking account?

This is not health care reform. It does not bend the cost curve. It does not deliver affordable health insurance to the middle class!
I also call your attention to an excellent column today at Kaiser Health News by James Capretta. A couple of excerpts:
"Then, last week, along came the long-awaited revision to the House's July bill. The Speaker asserts that the new version stays within the president's $900 billion budget, but that is plainly not the case. The Congressional Budget Office estimates that the Medicaid expansion, the new subsidies for insurance premiums in the exchange, and the tax credits for small businesses offering coverage will cost $1.055 trillion over 10 years. In addition, the bill has scores of other spending provisions that would add to the government's costs. There's an expansion in the program that subsidizes the premiums and cost-sharing for low-income seniors, costing $13.5 billion over a decade. There's also a new program to pay primary care physicians more in Medicaid ($57 billion), increase the Medicaid matching rates in 2011 ($23.5 billion) and much, much more. All totaled, these other spending provisions add well over $200 billion more to the bill's total spending.

"The only way House Democrats can claim to stay within the president's stated budget is by ignoring the non-coverage spending in the bill and by netting the cost of the coverage expansion with new taxes collected from those who decline insurance and employers who "pay" rather than "play." But this kind of accounting makes no sense. If the spending budget set by the president can be met by netting out taxes, it's essentially meaningless, because any level of expenditure could be acceptable if coupled with an offsetting tax increase. That's not what the president meant to convey in his speech. And Democrats have yet to explain what could possibly justify all of the other spending in the bill.

"Then there's the issue of physician fees in Medicare. The "sustainable growth rate" formula calls for a 21 percent cut in physician fees in 2010, which no one supports. However, the 10-year cost of full repeal is nearly $250 billion. In July, House Democrats proposed to include a full repeal in their health care plan, along with scores of other Medicare provisions. Now, however, they want the SGR repeal to pass in a standalone bill so they can claim the costs of health care reform are lower. It doesn't matter to taxpayers if Congress passes all of this in one bill or two. The total cost is the same either way.

"Overall, then, the House plan, including the SGR fix, is to spend about $1.5 trillion over the period 2010 to 2019 on health care, well in excess of the $900 billion budget the president promised to the American people...

"So what does the House bill do to cut costs? Orszag touts the inclusion of more bundled payments, incentives for hospitals to cut back on preventable readmissions, and other similar changes. But these are minor adjustments that are doomed to get watered down as time passes. In the main, the House bill would simply reduce payment rates in Medicare and Medicaid to save money, including large cuts in reimbursement levels for hospitals, nursing homes, and home health agencies. These cuts are not calibrated to reward quality or encourage more integrated models of care. They are applied across the board. And they certainly do not constitute delivery-system reform. On paper, they appear to reduce Medicare's per capita cost growth rate. But if payment rates were the answer to the cost problem, it would have been solved long ago.

"The president built high expectations at the beginning of this year that health-care reform would finally tackle the difficult entitlement and cost issues necessary to building a sustainable system of insurance coverage. But the House plan has devolved into a large tax increase (about $725 billion over 10 years) and entitlement expansion, with very little by way of "reform." It's not too late for a serious course correction. But if the president and his aides continue to signal that House bill is acceptable, they will never be able to deliver the real reform the president has promised."
Read the rest of Capretta's column here.
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