Obama '08?

# “Page 50/section 152: The bill will pro­vide insur­ance to all non-U.S. res­i­dents, even if they are here illegally.“

* Sec­tion 152 is titled PROHIBITING DISCRIMINATION IN HEALTH CARE and noth­ing in it guar­an­tees cov­er­age to ille­gal aliens. Addi­tion­ally, a later por­tion of the bill, SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED ALIENS, specif­i­cally for­bids the bill from pay­ing for health-care for ille­gal aliens.

# “Page 58 and 59: The gov­ern­ment will have real-time access to an individual’s bank account and will have the author­ity to make elec­tronic fund trans­fers from those accounts.“

* As best as I can tell, Mr. Kithil is refer­ring to SEC. 164. ADMINISTRATIVE SIMPLIFICATION. ‘SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE TRANSACTIONS. (4) © which reads “enable elec­tronic funds trans­fers, in order to allow auto­mated rec­on­cil­i­a­tion with the related health care pay­ment and remit­tance advice;” And if we apply a bit of thought to what that says, it’s really no dif­fer­ent from using your debit card to buy milk at the gro­cery store. Thanks for point­ing out the obvi­ous there, Mr. Kithil.

# “Page 65/section 164: The plan will be sub­si­dized (by the gov­ern­ment) for all union mem­bers, union retirees and for com­mu­nity orga­ni­za­tions (such as the Asso­ci­a­tion of Com­mu­nity Orga­ni­za­tions for Reform Now " ACORN).“

* I will note that sec­tion 164 is SEC. 164. ADMINISTRATIVE SIMPLIFICATION and every­thing I see under it appears to be talk­ing about how the plan is to be run. But there is noth­ing I can find in the bill which seems to sup­port Mr. Kithil’s claim that the plan will be sub­si­dized for union mem­bers, union retirees and for com­mu­nity orga­ni­za­tions. If Mr. Kithil or another oppo­nent of this bill can find me the rel­e­vant por­tion of the bill which makes up the basis of this claim, I’ll be happy to revisit it.

# “Page 203/line 14"15: The tax imposed under this sec­tion will not be treated as a tax. (How could any­body in their right mind come up with that?)“

* PART VIII"HEALTH CARE RELATED TAXES, Sub­part A"Tax on Indi­vid­u­als With­out Accept­able Health Care Cov­er­age, SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE., (e) Other Def­i­n­i­tions and Spe­cial Rules-, (6) NOT TREATED AS TAX IMPOSED BY THIS CHAPTER FOR CERTAIN PURPOSES " “The tax imposed under this sec­tion shall not be treated as tax imposed by this chap­ter for pur­poses of deter­min­ing the amount of any credit under this chap­ter or for pur­poses of sec­tion 55.” So basi­cally for tax pur­poses, this par­tic­u­lar tax can­not be used in cal­cu­lat­ing tax cred­its. Big whoop, our tax sys­tem is nearly as con­fus­ing and bro­ken as our health-care sys­tem. Is it really any sur­prise that some­thing like this is in the bill?

# “Page 241 and 253: Doc­tors will all be paid the same regard­less of spe­cialty, and the gov­ern­ment will set all doc­tors’ fees.“

* Again the lack of proper doc­u­men­ta­tion of Mr. Kithil’s argu­ment, but my best guess is he’s refer­ring to some lan­guage in the bill that the Sec­re­tary must nego­ti­ate rates for health-care items/services such that the gov­ern­ment will not pay less than the rates already set in the Social Secu­rity Act and not more than the aver­age of other QHBP. Again, this is fear-mongering on the part of the Far Right and if they were sup­port­ing the bill; they’d point out this bit as being fis­cally respon­si­ble on their part.

# “Page 272. sec­tion 1145: Can­cer hos­pi­tal will ration care accord­ing to the patient’s age.“

* (18) AUTHORIZATION OF ADJUSTMENT FOR CANCER HOSPITALS- What this por­tion of the bill really does is give the Sec­re­tary the abil­ity to study the costs of pay­ments to can­cer hos­pi­tals and if it is deter­mined that these spe­cialty hos­pi­tals are charg­ing more for the same ser­vices as gen­eral hos­pi­tals, then the Sec­re­tary has the author­ity to adjust pay­ments to these can­cer hos­pi­tals to reflect those costs. Which sounds more like this bill would have the gov­ern­ment pick­ing up more of the expense for patients going to a can­cer hos­pi­tal, and that sounds good to me.

# “Page 317 and 321: The gov­ern­ment will impose a pro­hi­bi­tion on hos­pi­tal expan­sion; how­ever, com­mu­ni­ties may peti­tion for an exception.“

* I’m shocked as for the first time since I started review­ing Mr. Kithil’s claims, this one appears to be entirely accu­rate. It appears he is mak­ing a ref­er­ence to © PROHIBITION ON EXPANSION OF FACILITY CAPACITY. But where he sees a prob­lem, I see a nec­es­sary step towards reform. When you’re try­ing to restruc­ture some­thing as com­pli­cated as the US health-care sys­tem, you’re much bet­ter off min­i­miz­ing the num­ber of vari­ables you have to deal with. Hence, the pro­hi­bi­tion on expand­ing health-care facilites. How­ever since hav­ing those facil­i­ties can mean life or death to patients; the cre­ators of this bill have included pro­vi­sions for health-care providers to ask for an exemp­tion. Why exactly Mr Kithil finds this to be a prob­lem is not made clear in the email, and I would be happy to dis­cuss his com­plaints on this point if he cares to make them.
* An alter­nate the­ory as to the rea­sonin behind this sec­tion of the bill, was pro­posed by James in a com­ment:

* the pro­hi­bi­tion on expan­sion of facil­i­ties is only on physi­cian owned hos­pi­tals. I think the idea being one thing that dri­ves up costs is some less eth­i­cal doc­tors refer­ring patients for unneeded tests and diag­nos­tics at facil­i­ties they owned to get more insurance money.

# “Page 425, line 4"12: The gov­ern­ment man­dates advance-care plan­ning con­sul­ta­tions. Those on Social Secu­rity will be required to attend an “end-of-life plan­ning” sem­i­nar every five years.“

* While there is lan­guage in this bill for advance-care plan­ning which includes men­tion of end-of-life plan­ning; the way it’s writ­ten, it’s clear the inten­tion is to make the patient aware of what pal­lia­tive, hos­pice and other care ser­vices the health-care provider offers which would nat­u­rally be of impor­tance for a per­son reach­ing the end of their life­time. Are those con­sul­ta­tions going to be filled with hap­pi­ness & joy? Prob­a­bly not. Is it a good idea to put infor­ma­tion in the hands of peo­ple who will need? Definitely.
* It’s also good to point out that under SEC. 138. INFORMATION ON END-OF-LIFE PLANNING, (b) “Noth­ing in this sec­tion shall be construed-“
o “to require an indi­vid­ual to com­plete an advanced direc­tive or a physician’s order for life sus­tain­ing treat­ment or other end-of-life plan­ning document;”
o “to require an indi­vid­ual to con­sent to restric­tions on the amount, dura­tion, or scope of med­ical ben­e­fits oth­er­wise cov­ered under a qual­i­fied health ben­e­fits plan; or”
o “to encour­age the has­ten­ing of death or the pro­mo­tion of assisted suicide.”

# “Page 429, line 13"25: The gov­ern­ment will spec­ify which doc­tors can write an end-of-life order.“

* The phrase “end-of-life order” never appears in this bill and after search­ing through the bill, I can­not find any sim­i­lar phrase to indi­cate the gov­ern­ment can have doc­tors write such a thing.
* On the other hand, there is lan­guage through­out the bill specif­i­cally detail­ing how assisted sui­cide it com­pletely forbidden.

http://ow.ly/1l01p

Myth and Fact: Organizing for America Misinformation on Health Care Bill
by James Gelfand

On March 10th David Plouffe, President Obama's former campaign manager and current White House advisor, sent out an email with a set of facts on behalf of Organizing for America about the "President’s Proposal" for health reform " which is, in actuality, a proposal for the House to pass the same bill that the Senate passed on Christmas Eve, and then for the Senate to pass a "fixer" bill using the nuclear option, budget reconciliation, with 51 votes. The email (and this page) contain a number of claims about this proposal, many of which are questionable at best. Below is our analysis:

Organizing for America Claim: "If you have health insurance through your employer and like your plan, you can keep it."
Fact Check: False

Explanation: This was debatably true in the Senate bill, but the President’s own proposal document lays out on page 3 why this is false in the section labeled "Extend Consumer Protections against Health Insurer Practices." The proposal would effectively end the ability to "grandfather" plans and keep them in operation after the bill is enacted, instead forcing an exhaustive and onerous list of new mandates on all plans, including employer and "grandfathered" plans. These include forcing all plans to cover "children" up to the age of 26, prohibiting rescissions (withdrawing coverage when customers mislead an insurer on their enrollment forms), mandating a new appeals process, mandatory state and federal annual rate reviews, banning annual and lifetime limits, banning all pre-existing condition exclusions, banning plan differences for highly compensated employees, and forcing all plans to cover government-designatedpreventative services with no cost-sharing. While most group health plans do not practice rescissions or have preexisting condition exclusions, the new government mandates will lead to reduced plan flexibility and higher costs. All of these policies will increase the costs of a plan, and while some of these changes may have merit, it is undeniable that forcing these changes will cause many plans to change, and some to cease operation.

Organizing for America Claim: "If you're a small business owner, you'll receive new tax credits that make it easier for you to provide coverage for employees if you choose to do so."
Fact Check: False.

Explanation: Senate bill H.R. 3590 included a credit that would cover 50% of premiums for a business with 10 or fewer employees with average wages of $20,000, if that business provided highly comprehensive health benefits and if the business paid the vast majority of every employee’s premium. This credit phases out at a maximum of 25 employees and $40,000 annual compensation for employees. The credit is available for a few years, and then ends abruptly, with no transition period. This credit is highly unworkable for two reasons " first, its short and abrupt nature will dissuade employers from using it due to concern about a large spike in out-of-pocket expenses the day that the credit suddenly ends a few years later. Second is its extremely limited nature " according to the U.S. Census Bureau, the average firm with 10 or fewer employees has an average wage of $27,000, meaning the vast majority of small businesses will not even be eligible for half of the credit.


Organizing for America Claim: "If you have Medicare, the President's plan guarantees that your benefits will not be cut, and the Medicare Trust Fund will be extended for more than 9 years."
Fact Check: False.

Explanation: Both of these claims are demonstrably false. First, proponents of the bill claim that it will extend the Medicare Trust Fund " but the Congressional Budget Office (CBO) has admitted that this is highly unlikely and the discrepancy is due to a number of arcane rules CBO was forced to follow in developing the legislation’s cost estimate. This includes double-counting the $500 billion in Medicare cuts, as if the money saved by those cuts could simultaneously be reinvested in the Trust Fund and used to fund a new $500 billion entitlement for families making up to $88,000 a year. It also assumes that the Sustainable Growth Rate (SGR) formula will operate without interference, thus allowing, starting this year, an across-the-board 23% pay cut to Medicare providers. In their letter to Leader Reid on November 18th of 2009, the CBO expressed doubt that the Medicare provisions would really be enacted " especially a new global budgeting entity that would be charged with annually containing the costs of Medicare in the out years " an impossible task for a commission that cannot make systemic changes to the program, in essence forcing them to ratchet down provider reimbursement or ration care. The claim that benefits will not be cut is countered by an analysis by the Chief Actuary at the Center for Medicare and Medicaid Services, who said in an analysis released December 10, 2009, that "20 percent of Part A providers would become unprofitable" and stop seeing Medicare patients. It is semantics to pretend that losing access to 20 percent of current providers would not result in service and benefit interruptions for Medicare enrollees.

Organizing for America Claim: "If you're uninsured, you could receive a tax credit to help pay for coverage if needed"part of the largest middle class tax cut for health care in history."
Fact Check: False.

Explanation: While the uninsured may be eligible for subsidies under the plan, this is in no way a tax cut. In all, the bill contains about $500,000,000,000.00 in new taxes. Money will be taxed from some people, and then given to others, or given back to the taxpayer. In fact, those same Americans will be facing one of the largest tax increases in history. According to Doug Elmendorf, Director of the CBO, in his testimony before a Senate committee, taxes on health insurance policies, prescription drugs, and medical devices, will all be passed on directly to consumers. Taxes on "Cadillac" high-value health insurance plans will result in benefit cuts or reduced wages. Small business owners who file taxes as individuals will pay massive new "Medicare" payroll and investment surtaxes.Worse, these taxes will rapidly expand like the Alternative Minimum Tax, because they are not properly indexed to inflation " the surtaxes are not indexed whatsoever. Small businesses will be burdened with a new paperwork tax. In addition, consumers will pay higher health care costs because of reduced government payments to providers " a practice called "cost-shifting" where, without overtly raising taxes, the government transfers costs to the private sector. All of this will result in a large series of "hidden taxes" that may not be direct income taxes, but will all result in higher costs " and less money in the pockets " of small businesses and middle class Americans. Calling this bill a tax cut is highly misleading.

Organizing for America Claim: "Even if you currently have health insurance, there will be new protections from insurance company abuses, and tax credits will make coverage more affordable."
Fact Check: False.

Explanation: While for a small minority of people, who buy insurance individually, there may be some benefits from insurance market reforms, the vast majority of Americans receive health benefits through their employers, and the majority of them are beneficiaries of self-insured ERISA plans. These people will see no change in the new so-called "protections" other than higher costs resulting from a loss of plan flexibility and onerous new requirements and mandates on health insurance providers. Further, the President and White House staff have independently admitted that for many Americans, health insurance will become more expensive, but claimed that this is acceptable because Americans would be required to purchase more comprehensive plans. While the merit of forcing more comprehensive plans can be debated (the U.S. Chamber of Commerce supports allowing individuals to purchase high-deductible and more basic, affordable plans), the Administration has already conceded that health insurance will be more expensive for many Americans.

Organizing for America Claim: "You will never again be hit with arbitrary health insurance premium hikes."
Fact Check: False.

Explanation: Proponents continue to vilify health insurance providers in an effort to distract from the public’s concerns about the proposal. While the health insurance industry has made an easy target, the allegation that they arbitrarily raise rates has been thoroughly discredited. In fact, the health insurance industry makes only a 2.2 percent profit, compared to 19.4 for the internet services industry and 20.4 percent for the communications equipment industry, among others. Overall, the primary drivers of health insurance cost increases are increases in the costs of health care services, products, and pharmaceuticals. The Administration chooses to overlook the fact that many insurers are currently being forced to increase their rates to build up cash reserves in anticipation of heavy losses if the President’s proposal is enacted. By enacting guaranteed issue and community rating, with an ineffective individual mandate, the plan will cause a death-spiral for health insurance pools when healthy people opt out and sick people opt in.

Organizing for America Claim: "If We Do Not Pass [the Senate Bill]… Up to 17 million more people will be uninsured by 2019."
Fact Check: Misleading.

Explanation: The Senate bill and President’s proposal delay the enactment of their primary coverage provisions for four years " this was done in an effort to lower the visible costs of the legislation by gaming the CBO score with budget gimmicks and moving four years of spending beyond the 10-year budget window the CBO uses to estimate scores. Now, the Administration has also continued to claim that every day we do not act, 14,000 people lose their health insurance. In other words, the Senate bill’s budget gimmicks will cause 14,000 people, times 365 days, times 4 years, so 20,440,000 people to lose their health insurance. Further, in a letter from the CBO to Senator Reid on November 30th, 2009, they found that even after enactment of the Senate bill and spending almost $1 trillion over ten years, 24 million people would still be uninsured in 2019. The Chamber’s calculations, based on Census Bureau data, found that of the 46 million people the Administration claimed were uninsured last year, more than 10 mill ion were undocumented or illegal, 11 million were already eligible for free or subsidized health insurance, 15 million were in income brackets such that they could likely afford reform, and only around 10 million were chronically uninsured not necessarily by choice. All of this adds up to point to a very confusing picture of tens of millions with no coverage without the bill, yet tens of millions with no coverage if the bill is enacted. Claiming that the bill will somehow save 17 million people from being uninsured in 2019 is misleading at best.

Organizing for America Claim: "If We Do Not Pass [The Senate Bill]… The average family's health care costs will nearly double by 2020, from $13,000 to $24,000."
Fact Check: False.

Explanation: In the November 30th, 2009 analysis of the Senate bill, the CBO wrote that: "Average premiums per policy in the nongroup market in 2016 would be roughly $5,800 for single policies and $15,200 for family policies under the proposal, compared with roughly $5,500 for single policies and $13,100 for family policies under current law… [an increase] of 10 percent to 13 percent in the average premium per person." In other words, health insurance will cost more if the President’s proposal (the Senate bill) is enacted, not less.

In short, your 'judge' is either a liar or an idiot, because he's wrong about every post in your chain email.

Cycloptichorn wrote:

In short, your 'judge' is either a liar or an idiot, because he's wrong about every post in your chain email.

Cyclo, your claim is based on your opinion AND someone else's opinion. Both appear to be in conflict with the opinions of others about the facts of what is actually in the Senate's health care bill and Obama's health care proposal.

http://coffeebear.net/2009/11/22/h-b-3200/
I decided to seek out an online copy of the bill to get an idea of how accu­rate Mr. Kithil’s claims might be, as his claims sounded like a load of hog­wash to me. A quick google search turned up a copy of the bill over at OpenCongress.org which I’ve used to make my com­par­i­son of the bill to Mr. Kithil’s claims.

http://coffeebear.net/2009/11/22/h-b-3200/
About Mark McKibben
Mark is a data analyst for [REDACTED], currently residing in the Midwest. CoffeeBear is a place for him to spout off about whatever catches his fancy. In his spare time, Mark does a bit of webdev & design. To stalk him more effectively, try following him on Twitter.

* Sec­tion 152 is titled PROHIBITING DISCRIMINATION IN HEALTH CARE and noth­ing in it guar­an­tees cov­er­age to ille­gal aliens. Addi­tion­ally, a later por­tion of the bill, SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED ALIENS, specif­i­cally for­bids the bill from pay­ing for health-care for ille­gal aliens.

And exactly how are you going to PROVE that someone is or is not an undocumented alien BEFORE you treat them?
And if you cant, then wont the US taxpayer still be footing the bill for their health care?

http://www.opencongress.org/bill/111-h3200/text
JUDGE DAVID KITHIL's References:

PAGE/SECTION/LINES
50/152/
58/59/
65/164/
203/.../14-15
241/
253/
272/1145/
317/
321/
425/.../4-12
429/.../13-25

Quote:

* Sec­tion 152 is titled PROHIBITING DISCRIMINATION IN HEALTH CARE and noth­ing in it guar­an­tees cov­er­age to ille­gal aliens. Addi­tion­ally, a later por­tion of the bill, SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED ALIENS, specif­i­cally for­bids the bill from pay­ing for health-care for ille­gal aliens.

And exactly how are you going to PROVE that someone is or is not an undocumented alien BEFORE you treat them?
And if you cant, then wont the US taxpayer still be footing the bill for their health care?

There is another solution to your problem - legalize them and make them pay just like everyone else, taxes, everything. Right? That way we get their money and cut down a lot on crime.

No law we pass is going to keep hospitals and doctors from helping people who stagger in.

One year into its promise of greater government transparency, the Obama administration is more often citing exceptions to the nation's open records law to withhold federal records even as the number of requests for information declines, according to a review by The Associated Press of agency audits about the Freedom of Information Act

Major agencies cited the exemption at least 70,779 times during the 2009 budget year, up from 47,395 times during President George W. Bush's final full budget year, according to annual reports filed by federal agencies. Obama was president for nine months in the 2009 period.

http://www.heritage.org/Research/Reports/2010/03/What-House-Passage-of-the-Senate-Health-Bill-Means-for-America
What House Passage of the Senate Health Bill Means for America Published on March 16, 2010 by Kathryn Nix and Robert Moffit, Ph.D. This week House Speaker Nancy Pelosi (D"CA) and the House leadership are working feverishly to enact H.R. 3590, the highly unpopular Senate health bill. It includes new middle-class taxes and government spending, bunches of federal boards and bureaucracies, mandates and penalties, an entitlement expansion, and unprecedented taxpayer funding of abortion. It is also characterized by flagrant inequities: special back-room deals at the expense of federal taxpayers for Florida, Nebraska, and Louisiana.

Nonetheless, House leaders will insist that Members of the House enact the 2,700-page Senate health bill, promising to “fix” its ugly and objectionable features with the second bill, which they would enact through the extraordinary budget reconciliation process. The Senate must fully cooperate with this scheme.

No Guarantees

Once the House passes the Senate bill"however it is “passed”"and sends it to the President’s desk for a signature, it becomes the law of the land. No fixes are guaranteed. A reworked House bill to amend the Senate bill may or may not survive the Senate’s budget reconciliation debate; provisions can be blocked on a point of order or struck down as incompatible with the reconciliation rules.

Moreover, even if a subsequent bill to amend the Senate bill somehow makes it through a very difficult reconciliation process, it will change little in terms of overall health policy. For all intents and purposes, the legislative debate for this year would be over. For this reason, ordinary Americans and lawmakers alike should understand what the Senate bill has in store for the nation’s health care system.

The Cost to Americans

Bending the Curve Upwards. The Senate bill manifestly does nothing to bend the health care cost curve downward. According to the latest Congressional Budget Office (CBO) report, the Senate bill would increase health care spending by $210 billion over the next 10 years.[1] This follows a previous report from the chief actuary at the Center for Medicare and Medicaid Services, who estimates that the Senate bill would result in $222 billion in additional health care spending over 10 years.

The Senate health bill does not even begin to address the distortions in health care markets and perverse economic incentives that drive costs up.[2] In fact, the Senate bill adds heavy new federal regulations on insurers and fees on high-ticket medical expenditures such as medical devices, prescription drugs, and high-cost insurance plans. As a result, the costs for patients and taxpayers would be higher than they would be under current law.

Even More Deficits. Congressional leaders claim that the Senate bill is “deficit neutral” because, among other things, it assumes current law governing Medicare physician payment rules, which would automatically result in an initial annual reduction in Medicare physician payment of 21 percent. This is an absurd assumption. Congress is not going to allow its own ridiculous Medicare physician payment update rules to go into effect. But if Congress were to repeal this rule, the so-called “doc fix,” it would add a 10-year cost to Medicare in excess of $200 billion. Assuming that the Congress does not “pay for” the doc fix"the most realistic scenario"that is the end of deficit neutrality.

In addition, the Senate bill includes additional billions in non-coverage spending and, as Congressman Paul Ryan (R"WI) has explained, “double-counts” savings from Medicare spending cuts, which cannot simultaneously enhance Medicare trust fund solvency while financing other program expansions.[3]

Finally, the CBO cost estimate looks at a 10-year window that includes 10 years of revenue collection but only six or seven years of outlays.

When all spending and offsets are properly accounted for, the true cost of the Senate bill skyrockets to over $2 trillion.[4] Further adding to this cost is the political implausibility of the projected 10-year savings, such as the $463 billion in cuts to Medicare.[5]

Taking into account these facts about the Senate bill, the most plausible expectation is that, over time, it would add significantly to the federal deficit.

New Middle-Class Taxes. The President solemnly promised that he would not impose any new taxes on American households making less than $250,000. The Senate bill shatters this promise.

For example, the excise tax on high-cost health insurance plans would overwhelmingly hit middle-class taxpayers. Likewise, special federal premium taxes in the Senate bill would also be passed down to consumers, resulting in premium increases that would be higher than they would otherwise be.[6] In addition to taxes on health insurance, the Senate bill would also create new taxes on medical necessities such as prescription drugs and medical devices.[7]

Beyond these new taxes, the President’s proposal would add yet another provision (presumably for consideration in the budget reconciliation process) that would tax investment income. This would result in 115,000 lost job opportunities and a net reduction of $17.3 billion annually in household disposable income.[8] Amidst a recession, this is a stunningly bad idea.

Increased Health Insurance Premiums. The President initially promised that Americans would see a $2,500 annual reduction in their family health care costs. But under the Senate bill, premiums would go up for millions of Americans. In fact, according to the CBO, estimated premiums in the individual market would be 10"13 percent higher by 2016 than they would be under current law.[9]

The Senate bill changes health insurance rules and adds a guaranteed issue of coverage provision combined with an individual mandate to purchase a federally designed health insurance benefit package. This combination could result in all sorts of unintended consequences, including even greater instability in the health insurance markets and even higher numbers of uninsured.

The reason: the economic incentives for younger and healthier individuals could encourage them to pay the cheaper mandate penalty rather than buy the more expensive government required health insurance, knowing that they could always sign up later under the guaranteed issue rule.[10] This in turn could further destabilize the health insurance market, which would then be populated by disproportionately larger numbers of the elderly and sickly in insurance risk pools.

Under such circumstances, premiums would increase even more, further discouraging healthy individuals from obtaining coverage. The danger is that more and more Americans could choose to remain uninsured rather than pay the higher price of carrying coverage.

New Problems for Employer-Sponsored Insurance. The Senate bill would introduce perverse incentives within the group insurance market as well. For example:

Incentives to drop coverage. The structure of the employer mandate would create strong incentives for firms that hire a large proportion of low-income workers to drop their employee health plan altogether.[11] The penalty employers would face for failing to offer coverage to employees would be $750 a person. However, if employers did offer coverage, but the employee-paid portion accounted for a larger percentage of a worker’s income than deemed acceptable by the bill, the worker would be eligible to drop out of employer-sponsored insurance and obtain a subsidy to buy insurance in the exchange instead. Under this scenario, the employer would pay a $3,000 fine for every worker that bought insurance in the exchange, capped at one-fourth of the workforce. If more than 25 percent of the workforce was comprised of low-income workers, the employer could end up paying the same amount regardless of whether they offer insurance or not"not including the expense and effort of offering insurance. It would thus be more beneficial simply to not offer insurance at all, much to the detriment of employees who would not be eligible for subsidies in the exchange.

Discrimination against low-income workers. The bill would also discourage employers from hiring workers from low-income families in the first place.[12] Eligibility for subsidies in the exchange is dependent on family income, so employers would benefit by hiring workers from higher-income families rather than low-income families. This would mean that a single mother would be less likely to be hired than an equally eligible job applicant looking to earn a second income, and a teenager would be more appealing as an employee than an adult. This penalty hurts those who need jobs the most by giving employers financial reasons not to hire them.

New inequities. The generous subsidies available to purchase insurance in the federally designed state-based health insurance exchanges would be limited to a subset of Americans that fall within an eligible income bracket, creating gross inequity among workers of equal income. Workers who were offered insurance through their employers would be able to opt out and enter the exchange only if their portion of employer-sponsored insurance premiums is greater than a specified percentage of their income. This would mean that one worker could receive thousands of dollars in additional federal assistance, while another with the same income would receive little to no assistance.[13] Of course, workers getting employer-sponsored insurance benefit from group coverage; but, of course, when an employer provides insurance, the worker still pays for it through lower wages and other compensation.

Expansion of Entitlement Programs and Government Control

New Regulations. The combination of an excise tax on high-cost insurance plans, a federally defined minimum medical loss ratio, age compression in rating, and federally defined required benefits would not only raise premiums but also make it exceedingly difficult for insurers to remain solvent and stay within the law.[14] At the same time, presumably through the reconciliation process, the President is proposing new federal health insurance rate authority that would, working with the state officials, monitor and reverse “unjustified” premium increases.[15]

The assumption is that government officials will set the right premium rates. If they set them above the market rate, Americans would pay too much for insurance. If they set them below the market rate, insurers would be forced to cut costs by clamping down on reimbursements for doctors, hospitals, and medical services, thus creating access problems for enrollees.

Or, if they run shortfalls because of federal officials’ miscalculations, they could lobby Congress for taxpayer bailout to cover the shortfalls. If banks are “too big to fail,” it is hard to imagine how health insurers, covering millions of people, would not also become the next big industry recipients of taxpayer bailouts.

Expanding Medicaid. Under the Senate bill, the federal government would initially cover most of the cost of expanding Medicaid, but thereafter states would have to pick up a portion of the cost. This comes at a time when states are cutting spending in Medicaid and other areas to accrue savings and avoid increasing debt.[16] In fact, a Heritage analysis of the options shows that states could save significantly if they were to drop their Medicaid programs altogether, which could become an appealing option after adoption of the Senate bill.[17]

An Un-level Playing Field for Insurance. The Senate bill requires the Office of Personnel Management (OPM) to sponsor at least two health plans that would compete nationwide against private health plans in the state health insurance exchanges established under the Senate bill. This would greatly expand the powers of OPM and could lead to a de facto “public plan” with separate rules for benefits, profits, and medical loss ratios.[18] The advantage of government-sponsored plans in the market could undermine the ability of private insurers to compete. There is nothing, of course, in the Senate language that would preclude taxpayer bailouts of the government-sponsored plans if they incurred shortfalls.

Penalizing Marriage. The Senate’s structure of the subsidies for health insurance is inequitable, offering more financial assistance to non-married couples than to married couples with comparable income.[19] This is bizarre social policy.

Sidecar Sideshow

House enactment of the Senate health bill means that it becomes the law of the land, regardless of further House efforts to craft a “sidecar” bill to make changes. It is quite possible that House action, followed by a presidential signature, simply ends this year’s health care debate.

Given the inherent difficulties in enacting complex legislative changes under the rules that govern reconciliation, the basic contours of the Senate bill would remain. And the relationship between the federal government and American citizens would increasingly be a relationship of dependence and, thus, subservience.

Kathryn Nix is a Research Assistant in, and Robert E. Moffit, Ph.D., is Director of, the Center for Health Policy Studies at The Heritage Foundation. Center for Health Policy Studies Deputy Director Nina Owcharenko also contributed to the research for this paper.

http://www.gpo.gov/fdsys/pkg/BILLS-111hr3590PP/html/BILLS-111hr3590PP.htm

[Congressional Bills 111th Congress]
[From the U.S. Government Printing Office]
[H.R. 3590 Public Print (PP)]

December 24, 2009

Ordered to be printed as passed

In the Senate of the United States,

December 24, 2009.
Resolved, That the bill from the House of Representatives (H.R.
3590) entitled ``An Act to amend the Internal Revenue Code of 1986 to
modify the first-time homebuyers credit in the case of members of the
Armed Forces and certain other Federal employees, and for other
purposes.'', do pass with the following

AMENDMENTS:

Strike out all after the enacting clause and insert:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Patient Protection
and Affordable Care Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:

Sec. 1. Short title; table of contents.

TITLE I--QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS

Subtitle A--Immediate Improvements in Health Care Coverage for All
Americans


...


``Sec. 36C. Adoption expenses.''.
(c) Application and Extension of EGTRRA Sunset.--Notwithstanding
section 901 of the Economic Growth and Tax Relief Reconciliation Act of
2001, such section shall apply to the amendments made by this section
and the amendments made by section 202 of such Act by substituting
``December 31, 2011'' for ``December 31, 2010'' in subsection (a)(1)
thereof.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2009.

Amend the title so as to read: ``An Act entitled The
Patient Protection and Affordable Care Act.''.

Attest:

Secretary.
111th CONGRESS

1st Session

H. R. 3590

_______________________________________________________________________

AMENDMENTS

_______________________________________________________________________

December 24, 2009

Ordered to be printed as passed

Quote:

There is another solution to your problem - legalize them and make them pay just like everyone else, taxes, everything. Right? That way we get their money and cut down a lot on crime.

So you would reward them for breaking our laws?

OBAMA: I am certain that we've made sure, for example, that any burdens on states are alleviated, when it comes to what they're going to have to chip in to make sure that we're giving subsidies to small businesses, and subsidies to individuals, for example.

BAIER: So the Connecticut deal is still in?

OBAMA: So that's not " that's not going to be something that is going to be in this final package. I think the same is true on all of these provisions. I'll give you some exceptions though. Something that was called a special deal was for Louisiana. It was said that there were billions " millions of dollars going to Louisiana, this was a special deal. Well, in fact, that provision, which I think should remain in, said that if a state has been affected by a natural catastrophe, that has created a special health care emergency in that state, they should get help. Louisiana, obviously, went through Katrina, and they're still trying to deal with the enormous challenges that were faced because of that.

(CROSS TALK)

OBAMA: That also " I'm giving you an example of one that I consider important. It also affects Hawaii, which went through an earthquake. So that's not just a Louisiana provision. That is a provision that affects every state that is going through a natural catastrophe. Now I have said that there are certain provisions, like this Nebraska one, that don't make sense. And they needed to be out. And we have removed those. So, at the end of the day, what people are going to be able to say is that this legislation is going to be providing help to small businesses and individuals, across the board, in an even handed way, and providing people relief from a status quo that's just not working.