Sunday, March 14, 2010

Obamacare’s Two Americas

Here’s the worst thing you probably haven’t heard about President Barack Obama’s health care plan, which he and his allies are about to force through the Congress despite enormous opposition from the American people: it makes everything onetime vice presidential nominee John Edwards once said about the class divide of “two Americas” come true.

The dirty little secret of this plan—which wouldn’t be a secret if opponents of this legislative package weren’t distracted by a dozen other wrongheaded policies in it—is that it will bring a major and irreversible upheaval to America’s labor markets. In a time of economic tension, this plan will displace millions of workers and push more people into becoming contract employees, resulting in increased instability for working families.

One of the many original stated goals of the White House’s health care reforms was the promise that you can keep your health plan if you like it. However, the White House wanted to give businesses much-needed relief from burdensome health costs. Like the desire to create a new entitlement while reducing the budget deficit, these aims are nearly impossible to reconcile, so Obama chose a path that accomplishes neither.

The president’s plan penalizes an employer for not providing insurance, but the government will subsidize the health care of workers without employer-provided insurance. This effectively allows workers to receive the same compensation package they get today, but with government footing the health-benefits part of the bill, so employers have no need to make up the difference in cash.

The economic benefits of that subsidy far outweigh the penalties—for low income workers, it can result in an enormous difference of over $17,000 per year.

It’s obvious what will happen under this plan: it will not make economic sense for any small business which employs lower-income workers to offer health insurance. And any small business which does so will almost certainly fail, burdened by higher costs than their competitors.

This dilemma could be solved by making the penalties more draconian, but that too would cause business failures, and as with the individual insurance mandate, too steep a penalty would make the plan even more coercive and unpopular.

As John Goodman of the nonpartisan National Center for Policy Analysis recently described it, “High-paid workers with employer-paid insurance will cluster in some firms, while average- and below-average-wage workers will cluster in others. Overall, ObamaCare will create irresistible economic pressure to restructure the entire labor market.”

The only likely outcome of this plan will be for companies to drop coverage entirely. Younger, lower-income workers will be eligible for a subsidy and forced into the health exchanges. That will compel them to do something that doesn’t make economic sense. Most young workers don’t use health care much—unless you give them an incentive to over-consume care by paying for it up front for them.

There’s a final step here, though, that’s critical to understand: once those younger and lower-income workers are forced into a system that eliminates rational decision-making, they are made beholden to these taxpayer funded subsidies, and face massive penalties if their income rises such that they lose the subsidies. The marginal tax penalty for an individual moving up from to $40,000 a year to $45,000 is massive, as also for families earning $95,000 versus $90,000, creating an artificial cliff that dramatically penalizes success.

Thus a new picture of Obamacare emerges: it will force people to pay for what they don’t want and purchase what they don’t need, in a massive expansion of the size and power of government. The entire proposal functions not as a method of improving care or lowering premiums but as a massive regressive tax falling disproportionately on the young and those on the lower end of the income scale. And once in place, it will trap its supposed beneficiaries in ways that cannot be undone.

Combine this regressive tax with a massive increase in spending via a government entitlement which will only grow, and you have a recipe for long-term economic stagnation and the permanent enshrinement of two Americas into our national social policy.


ObamaCare Nuclear Option Deal Close

Behind closed doors, the Obama Administration, House and Senate Democrat leaders are cutting a secret deal on ObamaCare. They have come up with a way to pass the Senate version of ObamaCare in the House without any House members having to vote directly on the bill. Now The Hill is reporting that the House and Senate Parliamentarians are helping to advise Democrats on how to pass ObamaCare. When will the self proclaimed most ethical Congress in history start acting ethical and honest? This 111th Congress has proven, to date, to be the most secretive, non-transparent and devious Congress in recent history.

I explained in a blog on The Foundry yesterday the unethical procedure being used to pass ObamaCare:
House members have come up with a unique way to structure a vote that attempts to avoid the House voting on legislation before it goes to the President. First, the House Budget Committee will report out a reconciliation bill. It is unclear as to whether the Stupak Amendment will be added. This reconciliation measure would be reported for consideration by the House of Representatives as a whole. Speaker Nancy Pelosi (D-CA) would then package the Senate passed Obamacare bill and the House reconciliation measure into one measure. The House rules committee will report out a rule that will allow the Senate passed Obamacare bill to pass the House without a vote.

This seems to be a violation of the constitutional requirement of Article 1, Section 7. The Constitution states in part “Every Bill which shall have passed the House of Representatives and the Senate, shall, before it becomes a law, be presented to the President of the United States.” The House will avoid a direct vote on the Senate passed ObamaCare by passing a self-executing rule that deems ObamaCare to be passed, if the House approves the rule setting up debate on ObamaCare. Under the rule if the reconciliation measure passes, then the Senate passed ObamaCare bill will be deemed to have passed the House without a vote.

There is precedent in the House for self-executing rules. In 2007, the House to pass a self-executing rule during the debate on a War Supplemental. Also, during the budget process over the past few years, the House has inserted language into the annual budget resolutions that ”deems” as passed a debt limit increase. This type of rule allows the debt limit to pass the House without a vote and as similar rule would allow teh Senate version of ObamaCare to pass without a vote.

Late last night, The Hill reported that “Democrats Nearing Deal on Reconciliation”:
House and Senate Democratic leaders and White House officials were optimistic Wednesday evening that they were nearing a deal on a reconciliation package that would smooth the way for them to finally complete health care reform. Congressional leaders and senior administration officials met in Speaker Nancy Pelosi’s (D-Calif.) office late in the day to hammer out a deal on reconciliation, meant to act as a sidecar of adjustments to the original $871 billion Senate-passed health care reform bill.

This meeting was not transparent and not open to the public. Pelosi was behind closed doors in order to cut a deal on a reconciliation measure that the House may consider in the next week or two. Yet again, Democrat leaders have used a closed door secret procedure to craft legislation to impose on Americans.
House Democratic leaders will walk their rank and file through portions of the package in a Thursday morning meeting, a leadership aide said.

This means that only Democrat elites have been part of this negotiation. Not until later today will the House Democrat caucus be allowed to see the reconciliation measure. Republicans need not apply, because they will not be allowed to see the reconciliation measure, until Democrats say so. And for your average American who will have to live under this new health care government run regime, you are not allowed to participate in the legislative process at all.
Reid declined to talk specifics as he exited the meeting. But he sounded optimistic that Democratic leaders were on the verge of a deal on the reconciliation package. “We are making progress. A lot of decisions were made,” Reid said. “I really do believe that the goal we’ve been seeking for such a long time — health care reform — is going to be done. We don’t have it all worked out, but we made a lot of progress.” Reid refused to speculate on a deadline for reaching a deal. President Barack Obama has said he’d like Congress to get health care done this month, and lawmakers are set to head out on a two-week recess beginning March 26.

This story in The Hill indicates that Senate Majority Leader Harry Reid (D-Nev.) is involved in the negotiations. We know that no Republican Senators were allowed to participate in this negotiation. There is a big shocker at the end of this story in The Hill.
Sources said the House and Senate Parliamentarians also attended the meeting to advise on reconciliation rules.

Stop the press! If this report is true, this could be a major scandal for the House and Senate Parliamentarians. They are supposed to be dispassionate umpires. Any appearance of the Parliamentarian gaming the system to aid one side to beat the rules should be denounced by all sides.

This was a very political and partisan strategy meeting with representatives of the White House, Democrat Speaker Pelosi and Democrat Leader Reid. Even if these Parliamentarians were not cheating the system by giving Democrats tips on how to bend the rules, the secrecy of the meeting should have been reason enough for the Senate Parliamentarian and his House counterpart to run for the exit. If Republicans lose every procedural objection during the reconcilation debate, they have a strong argument that the parliamentarians should recuse themselves from this proceeding because of a strong appearance of impropriety.


The Slaughter solution?

I've been dubious that Nancy Pelosi lacks the juice to muscle Obamacare through the House, but her enforcers must be running into a wall. Minority Leader John Boehner's blog introduces us to the aptly named Slaughter solution via this Congress Daily report (PDF). Boehner's blog reports:
The twisted scheme by which Democratic leaders plan to bend the rules to ram President Obama's massive health care legislation through Congress now has a name: the Slaughter Solution.

The Slaughter Solution is a plan by Rep. Louise Slaughter (D-NY), the Democratic chair of the powerful House Rules Committee and a key ally of Speaker Nancy Pelosi (D-CA), to get the health care legislation through the House without an actual vote on the Senate-passed health care bill. You see, Democratic leaders currently lack the votes needed to pass the Senate health care bill through the House. Under Slaughter's scheme, Democratic leaders will overcome this problem by simply "deeming" the Senate bill passed in the House - without an actual vote by members of the House.

Is this some kind of a joke? At NRO, Daniel Foster explains that the joke may be on us. This must be one of the cases described by Brecht in which it is time for the government to dissolve the people and elect another.

JOHN adds: What we're seeing in Washington is appalling, but there is a bright side--the craziness is proof that the Democrats don't have the votes for Obamacare in the House. They've pulled out all the stops, pushed every chip they have into the center of the table, and they still don't have the votes. Will they get them? I don't think anyone knows. Normally I would take the cynical view and say, Sure, if they twist enough arms, in the House they can ultimately do what they want. But they've done pretty much everything they can think of, and they don't have the votes yet. So what reason is there to assume that one more stratagem will put them over the top?

If the Dems do try the Slaughter solution, I think we can deem Congress to be Republican after November.


The Nuclear Option A Neutron Bomb Aimed at the Democratic Majority

What they do today will be used against them in the future -- but they are now so fanatical that they have cast caution to the winds. The GOP backed off a nuclear option over GWB's judicial appointments. They probably won't do likewise in future if Pelosi has her way now. But it's typically Leftist to have no thought for the future. Like children, they must have what they want now

It’s looking more and more likely that Nancy Pelosi and Harry Reid will trigger the so called nuclear option to push through their health care legislation for the benefit of the American people; the very same people whom overwhelmingly have rejected it and its big government solutions to rising medical costs.

Her fanatical desire to pass this legislation has overwhelmed her ability to reason critically, as is evidenced by recent interviews in which she is quoted as saying, “Representatives are not in Washington to self perpetuate their political careers.” While Mrs. Pelosi may inhabit a very safe district, her words have probably come as quite a surprise to a number of her less safe Democratic colleagues. Hopefully she will give them enough advanced warning to begin in earnest the search for a new career.

It has become something of an urban legend among the Democrats that it was their inability to pass health care reform in the first Clinton administration that was responsible for their loss of the Majority in the House. In other words, the American people were deeply upset by the Democrats’ inability to deliver on legislation that would greatly increase their taxes and add mountains of new regulations to an already over regulated health care industry.

This is simply a major misread of history on their part. A more plausible reason for their rebuke and loss of Majority in the following Midterm elections were the Clinton tax increases and the arrogance of their members, as exemplified by the check kiting scandals of the house. This same arrogance was last displayed by members of the Republican party shortly before they lost their Majority status in the midterms in 2006.

Their fall back reasoning to vote for this legislation is no better. The idea that voters will seek retribution against the legislators who first cast a yes vote for the bill, and then once it became clear that nobody wanted it voted against it, is just silly. Do they really believe that if you vote for a bill that is hated by the majority of the public twice somehow you are safe? Have they never heard the old saying that “two wrongs don’t make a right?”

Before the Democrats trigger their Nuclear option, they should review their college physics text books one last time and realize that at it’s essence the Nuclear option, like the bomb it is named after, is an uncontrollable chain reaction. This Nuclear option has all the makings of a Political Neutron Bomb for their party; a tactical nuclear weapon designed to eliminate people but leave buildings intact. The Democratic Leadership should take a deep cleansing breath, remove their ideological 3D health care shades and have a look around. Somehow in the mass confusion that has been characteristic of this torturous process of producing health care legislation they have overlooked the Bright red rings outlining the bulls eye that this monstrosity has imprinted on their political careers.


GOP's Ryan Dissects ObamaCare, Lays Out 'Roadmap' To Health

Rep. Paul Ryan, R-Wis., took the national stage last month as he cut down Democratic health care plans point by point. If the GOP should win back the House In November, Ryan will become chairman of the House Budget Committee. And he has lots of ideas. He recently updated his "Roadmap for America's Future" to address many issues, including the budget deficit, entitlement programs, the tax system and health care.

IBD recently sat down with Ryan to discuss his ideas. In Part One he discusses ObamaCare's flaws and how his "Roadmap" would improve our health care system.

IBD: President Obama said his overhaul will "bring greater competition, choice, savings and efficiencies to our health care system."

Ryan: It will do the opposite of all three of those. It will mean less competition and less choice because it narrows the options consumers will have to get health insurance. It puts everybody on a glide path to go into an exchange where people will have three choices of policies — gold, silver and bronze. It standardizes health insurance and takes underwriting out of health insurance, which is how many insurers compete. At the end of the day you'll have a few big insurers selling different versions of the same color. With the kinds of mandates and rules they impose on insurers, the small and medium-sized insurance companies simply can't compete because they don't have the economies of scale. What you'll simply have are these handful of really large insurers simply becoming claims processors for federally run health insurance.

One example. There is a medium-sized insurer in Milwaukee that has 2,200 employees, 1,600 in Milwaukee. They sell in the individual market and they have the biggest share of policies with health savings accounts. If this bill becomes law, they'll have to close because of the rules and regulations. That means they lay off the 1,600 people in Milwaukee and send out cancellation notices to their 1.3 million policyholders.

The only ones that will survive are the really big companies. That will make prices go up. And what's so insidious from an entitlement standpoint is it's an open-ended entitlement that says to everyone who makes under $100,000, if your health care expenses exceed 2% to 9.8% (depending on income level), don't worry, taxpayers will pay the rest of it. That is an invitation of cost explosion.

IBD: Let's move to your Roadmap. On health insurance, you want to replace the employer-tax exclusion with a refundable tax credit of $2,300 for individuals and $5,700 for families. They can use it to buy insurance and pocket the difference.

Ryan: They should be able to pocket the difference because it is important to have a shopping incentive like that to put price pressure in the right place.

IBD: People fear that they won't be able to keep their employer-based coverage under ObamaCare. Doesn't the tax credit have the same weakness — you give people with employer-based coverage a tax credit in place of the tax exclusion, but there is no guarantee that the employer will keep that coverage?

Ryan: First, many employers who offered their employees health insurance 10 years ago don't anymore. More and more employers are dropping it anyway. So more and more people don't get health insurance from their jobs and they get no tax benefit. Let's end the discrimination against people who don't get health insurance through their jobs.

Second, I'm just de-linking the tax deduction for employees from the job and reattaching it to the individual. The employers still have the same tax incentive to provide health insurance to their employees.

I'm saying since more employers are dropping health insurance, since more people are changing jobs, losing jobs, going into business for themselves, make that tax benefit their property and not the property of employers.

IBD: John McCain proposed a similar plan in the 2008 presidential campaign. Obama attacked him because eliminating the exclusion, in effect, raised taxes, though only on upper-income earners. How can you deal with similar attacks?

Ryan: What's funny is Obama is doing it now under his bill. The president is proposing to take away the tax exclusion, at least for a certain segment of the market, and then use that money to spend on programs. That really is a tax increase. By contrast, I'm exchanging one tax benefit for another. You lose your exclusion, but you get it back as a tax credit.

I would argue that the current tax exclusion doesn't make any sense because we are subsidizing the wrong people. The people in the highest tax bracket get the biggest tax break for health insurance.

IBD: But how do you get around the political problem, that you're raising taxes?

Ryan: I'm not worried about the political problem. Economists from the left and right will tell you that one of the greatest sources of health inflation is this tax-exclusion system. It creates this third-party payer system that divorces consumer — the patient — from prices. You have to deal with that.

The vast majority of Americans will get a tax cut under my plan, on average about $1,400. If you don't have health care from your job, you'll get $5,700 more for your family for health care. Yes, people in the top tax bracket would not get as much from this system. But the people in the middle and lower brackets will get more, and they are the ones having a hard time buying health insurance. If we are trying to help get insurance to the uninsured and help middle-class families afford health insurance, the Roadmap is a far better way to do it.

IBD: Explain the state health insurance exchanges that the Roadmap would create. Also, why would they have to offer a plan that meets "the same statutory standard used for the health benefits given to members of Congress"?

Ryan: So, within the exchange, among the plans they have to offer is one like the standard Blue Cross option in the federal employee system. That way, people trapped in those states with extraordinarily high-cost plans can get basic insurance. If they want to buy more expensive insurance with all the bells and whistles, that cover acupuncture and hair plugs, they can still do so. It accomplishes much the same objective of interstate shopping, which I favor.

IBD: What if some people think that even the basic congressional plan is still bells and whistles? What if they want even less coverage?

Ryan: Then with interstate shopping they can go find a better plan. The point is not to create a floor, but to create an option that's not now available in many states.

IBD: The Roadmap would also reform Medicare. Starting in 2022, it would give seniors $11,000 annually to purchase private insurance. But critics have suggested that seniors don't have the sophistication to find cost-effective insurance.

Ryan: That's a paternalistic, arrogant and condescending notion. The seniors I represent sure analyze these things, they have children that look out for their best interests, and there are plenty of groups and service clubs that can help seniors.

But Medicare has a $38 trillion hole right now. It is unsustainable. What my plan says, if you are retired or above age 55, we're not going to make any changes. You're going to get Medicare as it exists now. But we've got to face up to the fact that Medicare will not be there for later generations.

For those under age 55, we put it on a path toward sustainability, and it works like the plan I get from the Federal Employee Health Benefit Plan. I get a list of plans that have been pre-certified by the Office of Personnel Management. I get a payment from my employer, the federal government— the taxpayers — and I apply that payment to the plan that works for me and my family.

That's what I propose for Medicare, with three changes. More support for low-income people to cover their out-of-pocket costs with a medical savings account. Less support for the wealthy because they can afford more on their own. Risk-adjusting the payments so as people's health deteriorates, they get more money to get affordable coverage. And seniors can select among a list of pre-certified Medicare plans.

That wipes out the unfunded liability and makes Medicare permanently solvent. That's been scored by Department of Health and Human Services actuaries and the Congressional Budget Office as achieving that.


Australia: Senior Citizen waits months for 'urgent' brain surgery

They're letting this guy walk around with a time-bomb in his head

A PENSIONER has been set a date for brain surgery after accusing Queensland Health of "playing God" and forcing him to wait more than 200 days longer than he should have for the urgent operation. The state opposition seized on the case of 70-year-old Hans Hagen, who understood himself to be on a category-one waiting list for more than seven months. That's despite him being listed as in need of surgery within 30 to 60 days.

Opposition health spokesman Mark McArdle tabled in parliament a copy of a letter from Mr Hagen to Health Minister Paul Lucas. It outlined the way his case had been handled since he was recommended for the aneurysm-correcting surgery in September last year. In it, Mr Hagen accuses Queensland Health of "playing God with my life". "My predicament is especially extreme as my life is threatened by two medical problems either of which could kill me without warning," Mr Hagen wrote. "Hence, I am at a loss to understand why my surgery has been delayed for such a long time."

He said he'd been told by Queensland Health staff that the extended wait was because he'd been reclassified to category two.

Mr McArdle demanded in question time that the health minister "explain to Mr Hagen in person why he has been waiting 267 days for urgent brain surgery".

Queensland Health district executive Dr David Theile said Mr Hagen had on Monday been scheduled for surgery in April. "Princess Alexandra Hospital apologises to the patient for any confusion about the surgical category assigned to him," Dr Theile said. "However, the hospital does not agree that his surgical condition, as has been published, is high risk." It is understood Mr Hagen's GP believed he was a category one patient, when specialists had classified him as category two.

Dr Theile said the hospital had been working with Mr Hagen since February to prepare him for surgery. "This has included consultations with specialist clinics in the hospital and privately as arranged by Mr Hagen's GP," Dr Theile said. "The hospital is sorry if this delay has caused concern for Mr Hagen, but he has expressed his satisfaction with his proposed surgery date with the hospital in communications today."


No comments: