Cannon says:
- Sen. Jay Rockefeller (D-WV) is the biggest opponent of Sen. Max Baucus' (D-MT) tax on expensive health plans because that tax would hit West Virginia coal miners.
- Unions vigorously oppose that tax because it would hit their members.
- Moderate Democrats in the House oppose Rep. Charlie Rangel's (D-NY) supposed "millionaires surtax" because they know it would hit small businesses in their districts.
Once the shooting starts, industry opposition will sway even Democratic members, because there are physicians and hospitals and employers and insurance-industry employees in every state and congressional district.
Can President Obama and the congressional leadership satisfy both groups? My guess is, probably not, and this misguided effort at "reform" will therefore die. Again.
That's a bold prediction. I'm skeptical. I think it is more likely is that this thing passes, and fails spectacularly. There are too many moving parts, and if any of them breaks, the whole thing rapidly starts to spin out of control and eat a gigantic hole in the deficit. If it does break, I think that Democrats keep control of Congress just long enough to explain why they keep having to enact whopping new tax increases every few years. Republicans don't need to improve their message. They just have to wait for Democrats to recover their reputation as tax and spend politicians who woefully underpredict the cost of everything they propose.
Time will tell which one of us is right--if either. This is one time I'd be happy for my predictions to fail in both directions.
I think they will.
It will pass and it will fail.
We are in a strange time, and it will end when there is nothing left to throw away. There is an accumulation of stupidity at the top, all political parties, in the economy, corporations, media, everywhere.
This bill has the potential of making US health care cost the government more, cost businesses and individuals more, for less. It takes enormous work and effort to design such a thing.
Maybe there should be a Nobel prize.
Yes we can!
Derek
Another possibility is that Obama will cave to industry demands and pass a non substantive bill, declare progressive victory, and move on as if he won.
Another possibility is that Obama will have moment of sanity and pass a non substantive bill, declare progressive victory, and move on as if he won.
Not me. I am one of those evil right-wingers who hopes that this thing fails to pass, but if it does pass, I sincerely believe and hope that it fails. Hope, because I do not ever want a massive increase in government control over my life to be ever seen as a success. Fail, fail, fail.
Fortunately, I don't think I have to rely on hope, as it is doomed to fail based on its own internal contradictions.
Yes, but you probably measure success and failure differently than do politicians. To them, success means getting the bill passed. Measuring the consequences and comparing to what was intended is *not* part of the success equation. That's someone else's problem.
And if you aren't convinced, I give you Social Security, Medicare, and Massachusetts health care. And those are just for starters. How much political fallout have those who enacted the ethanol subsidies suffered, while almost everyone (except voters in Iowa) acknowledge that those subsidies were a horrible failure, and yet we can't get rid of them.
So, for me, I hope that it fails to pass. But barring that, I hope that it actually succeeds if it is passed. Because we'll be forever stuck with it if it passes.
"The worse, the better" is a terrible strategy. Government spending doesn't go away, ever. Half the temporary programs are permanent, and so are all the permanent ones. It will fail, they'll throw more money at it, and it'll shamble along, Frankenstein-like, until the next Dark Age comes along. And no, it's not worth even hoping for that - despite all the socialist nonsense Western society is saddled with, we're too strong to fall any time soon. Well-meaning idiots will keep piling weight onto our backs, and we'll keep carrying it for a century or two yet, if not longer.
Stop stupid spending when you can, turn stupid spending back when you can. It's mostly a losing battle, but fighting it is still far better than conceding it.
I believe Megan is precisely correct: with the house, senate, and POTUS all run ideologically, how does this not pass? Pressuring the Blue Dogs, etc., just won't be enough.
And I agree that this will balloon into a catastrophic budget event.
But my question is: then what?
Who truly believes that our economy can take much more abuse?
We produce barely a fraction of what we should, importing a huge proportion of even basic goods.
We spend more than we make.
Less than half of our people even pay income tax.
Social Security payments are ballooning in the face of rising unemployment, as people take early retirement to offset pink slips. Even without this extra-special event, the system is unsustainable.
Medicare and Medicaid are fiscal disasters, also unsustainable, and the new system will only add weight to this fiscal albatross.
Our banks are starting to show signs of zombie-ism.
GM and Chrysler are essentially British Leyland, just waiting for the curtain to fall.
Where is the bright spot in this disaster? A dollar so low that American labor is finally on par with China?
Does anyone see a bright spot in a five-year time horizon?
So the US will turn into a zombie nation, living off its past because its present can't pay for itself. Hey, it worked for Japan, right?
Megan,
You might be the worst pundit at the Atlantic.
The SFC is about to vote a bill our of committee, which will mean that this is the furthest ever that health care reform has gotten, and you say it's doomed. But then again, you and all your regular commenters revel in the doom and gloom (fergodsakes, when was the last time anything good happened that you wrote about and they all agreed with you that it was good?) Seek help sad people!
I'm sure all of your minions here will agree with whatever silliness you pose, and this is hella spiteful, but gawd, after reading your arguments against this health care fight all summer, I'm hoping it passes and is successful just so you can be proved wrong yet again...
Yes, Megan, why can't you just shut up and revel in the wonder that is utopian progress?
This is *precisely* what Megan said:
" I think it is more likely is that this thing passes, and fails spectacularly."
She didn't say it is doomed. She says it will pass and fail. She then, unlike you, gives reasons why she feels that way.
Other than pom-poms, a sweater with a large O on it, and a pair of two tone sneakers, what are you supporting your thesis with?
Dude, it seems you misread Meg's post. She's commenting on the opinion of Michael Cannon who suggests healthcare reform is doomed. Megan disagrees and says she thinks reform will pass. How does the SFC's pending vote prove Megan wrong? If anything, it might demonstrate Megan's got good reason to believe the bill will ultimately become law.
Megan then suggests she believes the reform effort will end in disaster, but hopes both she and Michael Cannon are wrong. Again, what does the SFC's vote have to say about this? Nothing. Deal with her argument that the bill's actual costs will outstrip projections and that the tax increases necessary to pay for it all will cause voters to rebel against Democrats if you can. Stating the bill is about to make it out of committee -- a prediction with which Megan agrees with -- does nothing for your argument.
The imperatives are to reform health care without actually changing anything about it. I, too, predict a trivial bill and declaration of victory as this particularly ugly can gets kicked down the road.
This bill, or whatever emerges from it, is such a colossal disaster in the making that I am firmly confident that there are enough Democrats in Congress smart enough to stop it.
I am firmly confident that there are enough Democrats in Congress smart enough to stop it.
Outlook not so good.
Doesn't take more than one, actually. I suspect there are more, but they simply can't show their hand just yet.
Moderate Democrats in the House oppose Rep. Charlie Rangel's (D-NY) supposed "millionaires surtax" because they know it would hit small businesses in their districts.
I really would like some right-winger to prove to me that any small business owners would be hurt by a millionaire surtax. It's a straw man!
I have several clients who would be hit by such a tax. (I'm a tax professional.) Most of them would be considered small business owners. A business must have several million dollars of sales before it's considered anything more than a medium sized business. (Back in the day when car dealerships were profitable, many had tens of millions in revenue. Would you call a car dealership a "large business"?) Since most businesses are organized for tax purposes as "pass through entities", the owners pick up all the businesses' income on their personal return. Which means, any moderately successful local business -- car dealership, restaurant, law firm, construction company, landlord, etc. -- might earn enough in any given year to be subject to Rangel's surtax.
I'm not asking you to accept my assertion as "proof". I'm suggesting you use a little more imagination.
I may be mistaken, but I believe that it refers to the fact that small businesses are not exempt from the myriad state-level insurance mandates, the way large businesses are. Small businesses are forced to either provide "Cadillac coverage" or none at all.
Hagios,
The original comment by ElectronHayek is in response to Michael Cannon's claim that moderate Democrats in the House are abandoning the healthcare reform effort out of concern that Rangel's millionaire surtax would hit the small businesses in their districts. (Would that Cannon were right, but I see no evidence of Democrats of any stripe abandoning healthcare reform in sufficient numbers to put passage in doubt. Instead, I see the House Leadership willing to allow some Democrats in difficult reelection races to vote "no" on a bill that's certain to pass.) ElectronHayek claims that concerns that small business owners would be hurt by a millionaire's surtax is a straw man. Why he/she believes that is a mystery. Either the tax will hit small business owners (who make up the vast majority of the top 1% of income tax payers) or it won't raise any revenue to speak of. If the owners of small businesses are hit by the tax they will be "hurt" by it. (Unless the claim is the business owners are somehow better off financially by paying more in tax.)
"small business owners (who make up the vast majority of the top 1% of income tax payers)" I'm not sure about that, David. Unless, perhaps, you include physician practices. I seem to remember that the majority of the over $400K incomes were top execs, heirs, celebrities, and dual-income families of professionals.
David,
Again, I may be mistaken but the tax is not literally a surtax on millionaires, but rather a tax on "Cadillac" coverage. Millionaires will purchase that level of coverage, but small businesses will be forced to as well because they are not exempt from the various state mandates the way large insurers are.
Hagios,
Depends upon which bill you're talking about. The Baucus bill has a tax on "Cadillac Plans" but the House bill(s?) have an income surtax on top bracket or a new bracket. I'm not clear but it's definitely an income tax. Which strikes me as stupid - an income tax will put more money directly into health care that might be spent in otherways - so it'll like as not drive up costs. And then on top of that it'll make it more attractive for employers to give out compensation in the form of health care benefits because they wouldn't be hit by the tax. So that will drive more money into health care as well.
It seems crazy to me.
There needs to be a new term -- kind of a companion to "concern trolling" -- that describes the airily dismissive, faux-confident predictions that such and such will or won't happen despite all evidence to the contrary. (I nominate "Self-Delusion Trolling" -- but I'm sure the creative types who frequent these parts can do a lot better).
What Cannon describes is simply negotiation 101: hoot and holler now, in order to get the best deal then. As Ezra put it today:
Oh, and also via Ezra, it appears both Senators Bayh and Nelson are open to the public option. That's Nelson as in "Ben."
http://voices.washingtonpost.com/ezra-klein/2009/10/evan_bayh_and_bill_nelson_open.html
Enjoy your fantasies, folks, while they last.
Yes I agree the public option will pass and right whingers will explode in fits of rage and fury.
"Enjoy your fantasies, folks, while they last."
Those concerned about the costs of this--and no, it's NOT paid for--are not indulging in fantasies. The likeliest outcome is passage of a bill that results in so much confusion and so much cost to the government (taxpayers) and those currently with insurance that, within 6 months or less (certainly before the mid-term elections) it gets dramatically scaled back or repealed altogether.
As this issue has developed, we've seen progressives care less and less about the substance of the bill and become more concerned about the theatricals. What cheerleaders like Ezra Klein crave most of all is the optics of a progressive policy "triumph" signed into law. That the bill itself will fail on its merits, and cost an enormous amount in new taxes and deficit spending, seems to not register at all with them.
Of course it's paid for, at least according to CBO. It's certainly not out of the realm of possibility that the bill as currently constituted would need more revenue, but we won't know that for a number of years. And in any event, the Baucus bill still needs to be amended with the HELP bill and with the House bill.
That's just ridiculous. One of the biggest criticisms of the Senate Finance approach is that it fails to control costs -- and that's because it has too little effect on the insurance arrangements of the vast majority of the American people. In short, if you're on Medicare on Medicaid, or if you're one of the 150 million odd Americans with private group insurance, virtually nothing changes for you the day after Obama signs the legislation (except, of course, for the new, evil socialist rule that says they can't cancel your health insurance on you). And in any event, the substantive changes the legislation does effect will only be gradually rolled out -- for the most part after 2010. You obviously don't know what you're talking about.
"Of course it's paid for, at least according to CBO. It's certainly not out of the realm of possibility that the bill as currently constituted would need more revenue, but we won't know that for a number of years. And in any event, the Baucus bill still needs to be amended with the HELP bill and with the House bill."
"In short, if you're on Medicare on Medicaid, or if you're one of the 150 million odd Americans with private group insurance, virtually nothing changes for you the day after Obama signs the legislation..."
So to sum up, I'm wrong because of course the bill is paid for because the CBO says the Baucus bill is paid for. But it might not really be paid for because that bill will have to be merged with the HELP and House bills, and we don't know if that final version bill will be paid for, and might not really know until years after the fact, so more revenue might be needed. Uh, OK. How am I wrong about it, you know, not being paid for?
And of course I'm wrong about the confusion part because for the sizable majority of the health care consuming public--those on Medicare and private insurance--nothing will change. Nothing changes? Really? If nothing changes for those people, then how can health care costs be controlled, and the new programs, you know, paid for? Or has the reform effort given up on that?
Why is the situation of "the vast majority" relevant? We're talking about economic effects. We've known for a century or more that economics is driven by choices at the margin . . . for example, by marginal costs rather than average costs.
Claudius:
Yes you are wrong, unless you have some special expertise to bring to the discussion, or have done some research with relevant cites that contradicts CBO analysis. But you don't, of course, do you?
A lot of things "might" be true. Do you have specifics to back up your claim, or not?
Please show me where I claimed "nothing" changes. You made the wildly implausible claim that a healthcare reform bill that gets enacted will, "within 6 months or less (certainly before the mid-term elections)" have to be "dramatically scaled back or repealed altogether." I was correctly pointing out that, because the changes A) will be felt primarily by the distinct minority of people who currently lack health insurance, and, B) in any event will be slowly rolled out almost entirely after the midterms, you clearly don't know what you're talking about.
Clearly further legislation will be needed to address costs, over the long term.
The "new programs" will be paid for via a combination of spending cuts and tax increases.
There is no way imaginable that this bill gets rolled back within 6 months of passage. After the amount of political capital Obama and the Congressional Democrats will have spent passing it(i.e., virtually all of it), every dotted I and crossed T will be Holy Writ for at least the next half-century.
... describes the airily dismissive, faux-confident predictions that such and such will or won't happen despite all evidence to the contrary.
You basically you agree with Megan. She thinks it will pass, so do you. I don't understand - why all the snark?
Why is the situation of "the vast majority" relevant? We're talking about economic effects.
No, we were talking about the political effects flowing from the passage of reform legislation, so obviously numbers are relevant.
You basically you agree with Megan. She thinks it will pass, so do you.
I was disagreeing with Canon.
Jasper: "Please show me where I claimed 'nothing' changes."
Right here, from your first reply--"In short, if you're on Medicare on Medicaid, or if you're one of the 150 million odd Americans with private group insurance, virtually nothing changes for you the day after Obama signs the legislation."
Jasper: "I was correctly pointing out that, because the changes A) will be felt primarily by the distinct minority of people who currently lack health insurance, and, B) in any event will be slowly rolled out almost entirely after the midterms, you clearly don't know what you're talking about."
Well, we don't know if you're "correctly" pointing something out, since we don't know what the final bill will say, or how the existing private market will react to it.
Jasper: "Clearly further legislation will be needed to address costs, over the long term. The 'new programs' will be paid for via a combination of spending cuts and tax increases."
It must be nice to live with such smug self-assurance. First, this reform bill was sold as way to, wait for it, control HC costs. Does it not do that? Second, if you really think that ANY spending cuts (which will be needed to control costs) are actually enforced, either now or in the out years, you're either being mendacious or delusional.
You must have your nose so far up Ezra Klein's ass you can smell his breath.
Claudius:
No, I said virtually nothing changes the day after Obama signs the legislation. You are the one making claims about the effects of the legislation's details on mid-terms in 2010 (the legislation will have to be repaled, scaled-back, etc). I was merely (correctly) pointing out your understanding is misplaced, because, again, you don't know what you're talking about.
Well, we certainly do know that the final bill's substantive provisions won't materialize in 2010 because of the logistics involved with setting up the administrative details of exchanges, new taxes, mandates, etc. So yes, we do know that I'm correct.
No, the reform measures under consideration mostly do not do very much to control costs (although they do build a foundation for further reform). I'm not claiming otherwise. Your point?
This is simply incoherent on your part. Again, I'm not claiming Baucus or the other bills do very much about cost control, although Medicare Advantage cuts, if they're (hopefully) enacted, would free up billions of taxpayer dollars for better uses. Also, the taxing of Cadillac plans, again -- if they can (hopefully) survive in the legislation -- will shift resources into less costly plans.
Wow. I'm blown away by your Dorothy Parker-like, razor-sharp skill at verbal repartee.
I too fully believe it will pass, and fail.
But that is not the point. I'm not sure the proponents are all that concerned. Some of them have the 'oh well, we can always revisit it and fix whatever we need to later' mentality (thereby screwing it up even further).
Some may see opportunities in any ensuing crisis.
And some are simply those who like to be judged solely on intentions, rather than results. Its like 'hey we passed the bill - see what great, caring people we are!!'
"Some may see opportunities in any ensuing crisis."
Absolutely, failure of the bill to extend coverage, control costs, reduce the deficit, improve existing coverage, etc., will not be interpreted as an overreach, but as not going far enough.
Well, I'm a proponent and I most definitely do have that "mentality."
There are simply limits to the ability of the American polity to effect structural changes. I think what the Democrats are trying to achieve right now -- coverage expansion to near universality coupled with long overdue re-regulation of private health insurance -- makes sense because A) it's politically feasible B) it will improve the lives of millions of people, and C) it builds a platform for further reform down the line. As many people have noted, Social Security was a vastly weaker and less comprehensive program when it was rolled out in the 1930s than it is now. Incremental improvements and expansions over the years have made it a much better program.
In short, once the American people have a taste of universal health insurance, they won't give it up. No democratic polity ever has. And from that political reality will flow the eventual, necessary, more stringent measures with respect to costs.
In short, once the American people have a taste of universal health insurance, they won't give it up. No democratic polity ever has. And from that political reality will flow the eventual, necessary, more stringent measures with respect to costs.
Which is why the Social Security program you just cited as an example, and the kissing cousins of Medicaid and Medicare, have bowed to the political reality of necessary stringent measures with respect to cost. As opposed, say, to one of them turning into an uncontrolled demographic time bomb while the other controls costs through persistent strangulation of service providers on the other and still resmebles a demographic timebomb. And if that happened, the taxpaying constiuents certainly would not go whistling past the graveyard, murmering "I've got mine" and hoping the other shoe doesn't finally drop until sometime after they're dead.
Seriously, just because a large enough pile of dung will break the fan instead of being broken up by the fan is no reason to go looking for a large pile of dung on the premise that you can shovel your way out of it later, maybe, poassibly, assuming access to a suitably large deck of tarrot cards, fresh votive candles, and a cooperative goat. The very nature of the US political system, which you also cited, means that healthcare "reform" as presently structured will simply put the US Federal Government on track to repeat California's fiscal meltdown somewhere on the scale of nuclear winter. The US electorate simply doesn't accept the fact that toys cost money.
Mouse: Your snark is misplaced, because there's little need to cut Social Security, as the program is eminently affordable by a society as wealthy (and growing wealthier) as the US. And the political will to engage in more stringent, explicit rationing -- a project that obviously will have to be tackled at some point to deal with the government medical programs you mention -- won't materialize until we have universal healthcare.
Unlikely. There's no provision in the US Constitution requiring a 2/3rds vote to enact a VAT, er, raise taxes. Indeed, via budget reconciliation, there's not even a need for a super-majority in the senate.
So you plainly admit your entire argument to be premised around a handwaved claim of "This time, will blow a budget hole so big they'll have no choice but to do something drastic"?
That's borderline sociopathic, considering the extended consequences of such a thing happening.
The bill will pass, there will be, as with most legislation, some things that need fixing, and the world will still keep on turning. Ultimately, it will be seen as a key step to strengthening the economy and society. In the short-term, the usual rightwing and glibertarian suspects will whine and pout, and try to ginn up fear and resentment. Big deal.
Don't be so sure. I've heard that a lot of the opponents of this unconstitutional expansion of communism are preparing a secret refuge in a hidden valley deep in the mountains of Wyoming. If they carry out their threat -- and take their talents and mastery of science and commerce with them -- those of us left behind will be reduced to living in a hunter-gatherer society.
In short, be careful what you wish for.
Believe it or not, most right-wingers who know of her consider Ayn Rand to be a complete loon too. She made a few good points, but she was sufficiently insane that, shall we say, I don't consider her to be much of a role model.
On the other hand, I consider the religious right to be sufficiently insane so that hardly any of them are good role models; I much prefer Ayn Rand. But it should be noted that Rand did not in fact advocate secret refuges in hidden valleys as a practical strategy. That was a plot device in what can best be described as a pulp adventure novel . . . arguably the greatest pulp novel ever written . . . and criticizing it as an approach to rightist political change is about as sensible as criticizing the climax of V for Vendetta as an approach to leftist political change. It's a story! In the real world, Rand sought to bring about political change by writing books setting forth her ideas, giving speeches, appearing on talk shows, and encouraging people who liked her ideas to support candidates she approved of . . . most notably Barry Goldwater. In other words, she had a very mainstream approach to practical politics.
As a rule, most brands of extremist political thinkers are rightfully considered crazy. I'd rather avoid taking either Ann Coulter or Ayn Rand too literally, thanks anyways. You're right that she was less crazy in practice than in theory(at least, until you get into her sexual philosophy), but still.
I don't think anyone ever suggested that this bill will be so catastrophic as to repeal the law of conservation of angular momentum. We're just suggesting that it's bad law that will cost more than advertised.
Well it would be great to see the bill pass and do well. So many people are so focused on keeping government out of their health care, but the current system gambles on their health while taking their money as well. I could understand protecting health insurance if it was run as not-for-profit, then there would at least by guidelines the company would have to follow.
As a country we have a very skewed view of health care and what it really means to us.
According to Eva Mor, author of (Making the Golden Years Golden)puts it like this, "Preventive care is a must. It will make our population healthier and with little or no need of expensive chronic illness care. It will be a great investment for the young generations, saving billions of dollars over the years. The baby boomer should be also provided with accessible and affordable long-term care insurance. This will protect them, allow them to remain independent as long as possible, and protect their assets." http://www.ourblook.com/component/option,com_sectionex/Itemid,200076/id,8/view,category/#catid107
There is a need for restructuring the entire system, not just health insurance, but medical education and practice as well.
I could understand protecting health insurance if it was run as not-for-profit, then there would at least by guidelines the company would have to follow.
/snark
Yep, it's not as if health insurance companies are regulated or anything. They don't even have to be actuarially sound if they don't want to.
Seriously, what is it about healthcare that turns everyone into raging communists? Why is the idea of private healthcare so totally inconceivable to people? Yeah, the US system has serious structural problems, but just as many of them are governmental(tax discrimination, excessive mandates, jurisdictional lock-in, etc.) as are private(preexisting condition lock-in, sketchy denial of claims, etc.). Nobody claims that hungry children require nationalized food production, so why does everyone seem to claim that uninsured people require nationalized medicine? It boggles my mind.
As for preventative care, most of it doesn't live up to the hype. "Eat less, exercise more" works great, but your doctor can't prescribe that one very effectively. Most of the rest costs about as much as it saves, to my understanding.
You are halfway there, Megan.
Yes, it burns a hole in the budget, and what then?
Higher taxes, for sure, but also look at the only part of government they are not growing: Defense.
Cutting defense spending means less evil US warmongering, which is how the Obama wing of the Dem party views our military and our past foreign affairs. Just read his speeches. This is all intentional.
The hole in the budget is a plus, not a minus, to them, because it forces us to cut defense spending, and so we become more like Europe, their utopia, or at least as close as we can get.
As for re-election, they figure the media will cover them like they always do, and find a way to shift the blame.
I mean, if you can have a president who chooses to deny his hand-picked general the forces needed to fulfill the president's hand-picked strategy in a war that just a few months back he called necessary, essential and willing to do anything to win, and the media can spin this as if it's no big deal, then the Dems must figure they can get away with anything...
So you think that Democrats are trying to starve the beast? I think your thesis needs some revision. Media cover is nice, but it's certainly not everything.
I hate to be the one going off-topic again, but ... I've been reading this blog and the zillions of comments about health care for some time. Why is it that so much white space gets devoted to the details of bills, the arcane of funding mechanisms, the villainy of either our current president or our last one – and very little on cost? I was driving home, listening to NPR, and a lobbyist for our nation’s hospitals blithely mentioned that health care costs would increase 79% in the next N years. I forget what the N was because I was again God-smacked by the percentage. Health costs have already gone up 10% a year for a while. How does this happen? As a small business owner, if I were told that the projected cost of ANYTHING were going up 10% a year for the foreseeable future, I would either fail to believe it (considering the recent historical low inflation rates) or close up shop.
Mind you, these are health care costs that will go up with or without any action by the government. It’s not the result of covering the uninsured or any other pet peeve you may have.
A quick googling of health care cost increases in the last decade indicates that the major culprits are not malpractice insurance (though it may lead to some defensive medicine), nor drugs. It’s hospital and doctor costs. Yet, all we hear here is that doctors have to pay back their student loans and hospitals would be fine if we just reduced the governmental interference or we have to make sure we don’t stifle innovation.
Isn’t there something really, really screwed up that we’re not talking about? Like Megan, I went to good schools, was a National Merit Scholar, obtained a PhD, and had a minor in economics as an undergrad. As I mentioned, I’m also a small business owner with motivation. You know what? I have no idea what the problem is, and I’m apparently not alone.
So, from my viewpoint, the problem is costs. We’re talking about price increases that most societies would define as vigorish. It can’t be baby boomers, could it? Not that much increase, that fast. It can’t be the uninsured traipsing into ER’s. They do that now, but they aren’t going to do that 10% faster every year.
Could someone enlighten me regarding what seems increasingly to be a verbal shell game to ignore the real problem?
I think this is the real problem:
http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande?currentPage=all
And I think the answer, as Dr. Gawande says in this interview with, of all people Ezra Klein, has nothing to do with who is paying the bills (government or insurance), but requires an actual health care reform.
http://voices.washingtonpost.com/ezra-klein/2009/06/an_interview_with_atul_gawande.html
The government is instead giving us health care expansion.
Spoken like someone who has great access to health care via good a good health insurance policy. I've got mine, - let's not make it expensive by trying to save too many people.
Mean while, the interview contains this nugget:
there are smart reasons to think about including a public option in the mix,
I guess he is right about everything else but that, right?
He also says this:
First, they spend more than $3,500 per Medicare beneficiary on home visits. El Paso is around $800. McAllen is spending more than half what many communities spend on their entire health care expenditures. The doctors there have to disinvest from these home health agencies and come to agreement on when those visits are worth using.
the end of life, McAllen spends $22 per person on hospice but more than $3,000 on ambulance rides. In a place like Portland it will be more than $400 on hospice and around $500 on ambulances. Increasing use of hospice, offering that as an option and working as a community on how to manage end of life, would be a smart move.
on basic cardiac prevention like getting people statin drugs. Most studies have shown you'll lower the cardiovascular disease rate by 25 percent and lower the number of procedures ordered. This was done in by Kaiser of Northern California, and they became the first community I've ever heard of where heart disease stopped being the leading cause of death.
you took those three things and worked on them for a year, you could go from $15,000 per person per year to less than $10,000.
Sounds to me like he has excellent ideas for controlling costs, including (gasp!) Medicare costs-which we all know are just impossible to control .
In reality, cost control is possible and will happen. No country with a universal health care system has gone bankrupt, so I confidently predict that the world's richest country won't either.
Of course cost control is possible. I've always though cost control is possible. I also think that, as is demonstrated by some of the passages you highlighted, that it is entirely possible within the system we already have.
My problem is, and has always been, that I think we should control those costs FIRST, specifically in the Medicare and Medicaid programs, before we enact Universal Healthcare. Also, because many private insurance payment schedules are based on (in some form) Medicare payments, reforming Medicare might just be what insurance companies need to keep private insurance viable and control costs.
If it doesn't, then I would have absolutely not problem with going to a public option, and I've said that before. I just want the reform to work first, so expansion isn't a gamble based on hoping to be able to control costs later.
Also, what about this screams I have "great access to health care"? I'm a graduate student, so I have whatever the school decides I get. It's not terrible, but it's not anything fantastic either.
I would suggest the following is a key part of the problem: health care is tax deductible for businesses and it is tax-free income for the workers who get this benefit. If Congress eliminated the tax-deductibility of health care benefits, companies would immediately find it much more attractive to pay every employee the $4k or $12k or $24k of income equivalent to what they now provide in health insurance, because wages and salaries would remain a deductible expense. This is where it gets interesting. Employees would suddenly be paying taxes on this extra income. But it would be real income. They suddenly might not want the cadillac-plan since it now is real money out of pocket and not healthcare-monopoly-money. Every group that has health insurance likes that this is tax-free income. But the tax-free groups spend their health dollars like they didn't earn them. They are indifferent to the cost of extra tests etc. These groups crowd out the provision of health care services at prices that people would pay if they were paying real money, not monopoly-money. If they take away the business deduction the taxes generated by employee taxes would be very progressive. The highest earners would be paying taxes on the equivalent of a higher value plan and at a higher tax rate. The adjustments downward in healthcare prices would be swift and deep. We would suddenly see hospitals managing their capital expenses because they would have to publish a price list. It is likely we would have to bribe people to get their shots and other necessary procedures that are important for public health. We would see the same productivity improvements we see in other industries that price in real money to real consumers. The insurance companies would figure it out. European experience suggests there would need to be real regulation. It would be self funded. I would suggest this is the real solution.
Completely agree. It might be prudent to make purchasing health insurance tax deductible, but cap the level at which you can deduct it below the "Cadillac" level in order to encourage people to have some form of insurance. Either way, moving more people away from employer provided insurance where the consumer is insulated from the costs and the benefits to individual plans would allow people to actually choose the level of health insurance they want, as well as allow them to attempt to minimize costs.
If necessary, I would have absolutely not problem with the government subsidizing some sort of public catastrophic care that kicks in at a certain level, as well as legislation mandating transparency in insurance policies and banning rescission anytime perhaps 6 months after a policy has been enacted (to allow enough time to fact check an application; this seems to be the way most insurance companies attempt to drop coverage, and is despicable, although I think it happens less often than many would have you think).
If you really want tax equity, you need to have two different tax benefits, actually. Employee health benefits are exempt from income tax; to replicate that, you need to allow private purchase of health insurance to be an adjustment to gross income. But employee health benefits are also exempt from FICA/Medicare; to replicate that, because these are not figured on individual income tax forms for employees, you need to institute a tax credit equal to 7.65% of expenditures on health insurance. Or perhaps to 15.3%—a case can be made that you should give back the employer's contribution to FICA/Medicare too. For the self-employed, you could either do exactly the same, or simply treat health insurance as a business expense, period.
Though I would favor not limiting this to health INSURANCE. Buying routine health care through comprehensive insurance is irrational in the first place; and its practical impact is to made both the provider and the patient opponents of cost control, because the patient doesn't pay the cost and the doctor gets income from it. Treating all medical expenses, not just insurance, in the same way, with a deduction toward AGI and a tax credit, would achieve neutrality between insurance and out of pocket payment, which would move us back toward insurance being limited to major catastrophic illnesses, the sort of thing that insurance is actually good for.
I could live with governmentally provided catastrophic care, I think, with a substantial deductible—say a few thousand dollars, or perhaps a smaller amount for a single condition.
This isn't a complete list, but here's a few of the big reasons medical costs keep inflating at such absurd rates:
1) The population is aging. The Boomers are going from low-consumption age brackets into high-consumption age brackets, and this isn't changing any time soon. When you age the population significantly, you increase healthcare costs, even holding all else equal. If you age-adjust the numbers, they get way less unreasonable - of course, that doesn't save anyone a nickel, but it explains a lot of it.
2) Medical care is genuinely getting better. People are living through things that they wouldn't have ten years ago, and progress of this nature will continue going forward. However, these new treatments tend to be incredibly expensive, and as technology advances and more of them go into use, costs will rise dramatically.
3) Related to the above, most people don't pay with their own money. 95% of the population has insurance, and most of the ones who don't are in low-consumption groups(since, for example, all old people are covered). When something expensive that can save your life is free, you buy a lot of it. This one won't change any time soon, and to be frank, I don't think it's possible to change it in any sort of modern society.
There's other stuff too - malpractice, med school costs, all that junk - but those are the big three, I think.
Excellent observation, William, and one I haven't seen made before. Hundreds of billions of additional taxable income will means tens of billions of additional FICA and Medicare taxes. I wonder if this has been figured into the projections of Social Security and Medicare shortfalls.
Could be, Alsadius, but I'm surprised, with all I've read here and elsewhere, that there isn't a more definitive breakdown. The only thing that I've read recently was a study of the increase in health care components in the last decade. Doctor and hospital costs were rising at a much, much faster rate than other components (e.g., drugs). I appreciate that the population is aging and living longer. However, it's just not possible that these factors account for 8-10% increases in cost, year after year. Either prices have gone up or consumption has gone up or both. I'm betting on prices, as no large group can consume 10% more of anything year after year. And, by prices, I mean the total price for the treatment of a symptom, including the possibility of over-prescription, excessive testing, and inappropriate use of expensive technology.
Megan,
Then I guess its a good thing that the Democrats aren't doing the cost predictions and are instead leaving the predictions to the historically pessimistic CBO.
Traditionally, the CBO underestimates benefits and overestimates costs.* This is a good thing. We want to be careful that we don't have "costs spinning out of control" and this happens to be what the CBO is good at.
Consequently, we can probably expect the plan to have more benefit and less cost than the CBO estimate. If anything ends up hurting Democrats, it will be that the costs are not distributed in a way that is favorable to their electoral demographics.
*It is also more accurate with costs than benefits.
Megan always forgets to mention the tiny detail of how every effort to control Medicare costs were not only opposed by the "conservative" Republicans and "fiscally responsible" Blue Dog Democrats, they were demagogued out of any future bill.
Most importantly, Megan has, for the last 9 months, trashed any measure that would cut costs. No negotiation/regulation of drugs and equipment prizes, because it would ruin innovation and kill more people in the long run (there are serious problems with this rationale, as many wrote at the time). No end-of-life counseling, because "it wouldn't be hard to manipulate a significant number of sick people into forgoing a lot of expensive care". Medicare can't possibly be cut by evidence based practices, because... it has never been done in the past. But it shouldn't be cut anyway, since it's so great on a number of non-measurable ways related to senior quality of life.
Megan does exactly what she accuses politicians of doing. "Medicare and other expenses are growing out of control, we've got to cut costs. Hey, wait! Are you crazy? You can't cut THAT!". The problem is, she is not alone. Every Republican is doing the same, along with some Democrats. So I hope it doesn't escape Megan how her prediction has a whiff of self-fulfillment to it.
This bill covers more Americans, and it's a step towards universal health care. It's true that, eventually, costs will have to be cut in the government programs. But hey, I say let's wait until the "conservative, small government" party is ready to make some cuts in Medicare, and shut up the hysteric voices from their own ranks screaming "death panels!", instead of encouraging them. Until then, at least Democrats are timidly fulfilling at least one of their promises - increasing coverage of the American population, thus ending a lot of unnecessary, stupid, pointless, immoral suffering in one of the richest countries in the world.
When did Megan make the comment that costs need to be cut, even generically? I seem to recall her saying exactly the opposite - something to the effect of "Costs will keep going up, and we'll keep paying them".
HEh, back in 1961 Saint Ron said this about Medicare/Medicaid:
"[I]f you don't [stop Medicare] and I don't do it, one of these days you and I are going to spend our sunset years telling our children and our children's children what it once was like in America when men were free."
We now know that to be complete, bat guano crazy wing-nuttery. Twenty years later, Reagan was protesting that he was always IN FAVOR of Medicare, honest Injun!
I expect Megan to be the same way in a few years. Medicare will be reformed and costs contained, the way such programs are every where else in the world-indeed, the way they are in Massachusetts, where costs have been cut-despite Megan's assertion that this was "impossible".
Its always been a Republican talking point that Social Security or Medicare will bankrupt us in a few years-until reforms are passed and the programs are restored to solvency. Then its as you were- till a few years later and then the same claims are made.
Its the Baucus bill perfect? Hell no. I hope for improvements, like a public option. But it will produce good results, and will work better than the current system . That, and not some conservative/libertarian vision of perfection is all we should expect.
We now know that to be complete, bat guano crazy wing-nuttery. Twenty years later, Reagan was protesting that he was always IN FAVOR of Medicare, honest Injun!
But that's true. Reagan always DID favor Medicare. He was simply opposed to government-paid for healthcare programs!
In 1961, Reagan wasn't trying to get elected to an office that had much of anything to do with Medicare. In 1980(or whichever year you mean to imply), he was. Politicians lie about their beliefs, even the good ones. Hell, especially the good ones - anyone I'd qualify as "good", or "intellectually honest", or "wrong but reasonable", or... doesn't stay a politician for long if they're too honest about what they think.
Also, most of the times Republicans roll out the "It'll bankrupt us!" talking point, they're trying to reform the system. Wonder who keeps opposing them?
And since then we have smoking bans inside and out, bans on the sale of flavored tobacco (except the type that the biggest tobacco company in the world sells, natch), seatbelt laws, helmet laws, bans on trans fats, mandatory calorie labeling, an attempt at a FEDERAL anti-texting-while-driving law, calls for obesity taxes, calls for obesity in children to be treated as child abuse and the beat goes on all based on the excuse that "your health care costs the taxpayers money."
Just because you AGREE with the loss of freedom, doesn't mean it isn't a loss of freedom.
you mean like france's 20+ year ongoing deficit re: healthcare?
you mean like the cagematch between the canadian federal government and the provincial governments over how to fund the ever-increasing healthcare costs? the feds keep cutting their portion of funding and the provincial governments keep begging them to increase it.
you mean like the way australians complain that their government is not spending enough per citizen on healthcare?
the rest of the world isn't doing so hot, actually. but admitting that appears to be beyond the ken of dwellers in liberaltopia.
Sadly, I tend to agree that the Baucus bill (or something roughly approximating it) will pass, and then subsequently give rise to other substantial problems. I am by no means a healthcare policy wonk, but in a work-related capacity, I had occassion this week to sit in on highly wonkish discussion of reform among some well-credentialed healthcare policy/planning consultants. Opinions varied of course, but there were a few consistent themes among the "experts": (1) they all believed that substantial reform is warranted and desirable; (2) they didn't much care for the Massachusetts plan or others like it (e.g., Baucus), owing mostly to costs and looming doctor shortages in certain disciplines; and (3) they think that we removed some good ideas from the table early-on in this debate.
For example, many of the consultants were intrigued by Sen. Wyden's proposals, which have been quickly dismissed by more senior legislators on the Hill for one reason or another. They discussed vastly different, but highly successful models in Singapore and elsewhere, which we've never contemplated in a meaningful way. And at bottom, they seemed to think that the current offerings will succeed in providing broader coverage but fail miserably when it comes to controlling costs. In fact, most seemed to think that costs will rise even more dramatically (CBO scores notwithstanding), because any effort to contain them necessarily offends some particular interest group, and our statesman-like leaders in the Capitol building will have none of that. Shocking, I know, that our legislators would kick the can down the road on the hard stuff...
In addition to the reasons stated by Michael Cannon, another development may forebode doom for the Democrat's health plan: an unraveling of the White House's backroom deals with industry players.
While the Obama Administration was initially smart to co-opt their opposition — pharma, hospitals, physicians, insurance companies — it was inevitable that these deals would not be honored by Congressional Democrats. The recent PricewaterhouseCoopers study on premium inflation under the Baucus bill is likely the first shot in an upcoming war.
As more of these groups see their deals broken, they'll realize that there were naive in assuming they could negotiate with Democrats. After all, Democrats don't understand or accept that private industry has a moral right to exist — or that's it good for the country. Instead, they'll go on the offensive, and this badly-flawed version of health care reform will die peacefully.
"Democrats don't understand or accept that private industry has a moral right to exist". I'll assume that this was just a flight of hyperbole (I'm a registered Democrat and a small business owner, as are hundreds of thousands of others).
Democratic and Republican lawmakers NEED private industry. Where else can they go for those fat jobs after serving a couple of terms?
:)
Not hyperbole — just an observation. The national Democratic leadership, as personified by Obama, Reid and Pelosi, certainly don't seem to get the connection between private industry and jobs.
Here's a good proof-point, from a recent article in the Wall Street Journal about the White House's efforts to tax "global" corporate profits (not a small business issue):
I assume you have good reasons for being a Democrat. But I find it hard to believe that support for private industry and small business could be one of those reasons.
Strange, but a cartoon from 1941(!) best demonstrates President Obama's philosophy of governance and exact view of the medical profession. And, with a little thought explains why he's failing...
Not everyone wants to live in:
BARACK OBAMA'S FAIRY PALACE
http://naturalfake.wordpress.com/2009/10/13/barack-obamas-fairy-palace
If it doesn't fall apart now, I don't see how Democrats survive when premiums start going through the roof.
The thing is, premiums are going to shoot up instantly. How can they not? The government is basically killing smaller, less gold plated plans and taxing the crap out of the gold plated ones. Then they are forcing companies to accept preexisting conditions, while the (minimal 1000$) penalty for not buying insurance doesnt kick in for 3 years.
The incentive provided in this bill for the healthy is obvious- dump your insurance and buy it when you get sick. The irony is that everyone agrees that this is exactly the flaw the plan was designed to mitigate. Instead of flooding more healthy people into the pool, this plan chases them out of the pool while swamping it with the already ill. Of course premiums will go up! How could they not?!
They should trash the entire bill as it is and start over. It should have 3 pages.
Page 1. Allow health insurance to be sold across state lines, and for the companies to pay taxes based on where they have insurees, not where their businesses are located.
Page 2. Commit money to health and physical fitness in schools again. Instill a healthy lifestyle at a young age to short circuit obesity, smoking, sedentary lifestyles, etc.
Page 3. Tax credit for not using health insurance each year except for wellness checkups. We should incentivize healthy choices and reward those who make the effort to stay healthy and not drag on the system.
The only downside is that this doesn't provide any entitlements or cash cows for politicians or the health industry. Therefore, these things won't ever be discussed as reforms. That is why I want this process to fail. It is overly complicated and has little to do with the health of our citizens.
"...spin out of control and eat a gigantic hole in the deficit"
You say that as if anyone cares. People don't. It's an abstraction they cannot understand. And similarly, they do not comprehend how it affects jobs creation, inflation or the standard of living.
The Fdereal government continues to steal money from future generations because a) nobody really gives a shit and b) there's nothing you can do to stop them anyway.
Actually we do understand it. We also understand that having a defense budget larger than almostt he entire world combined doesn't make much fiscal sense either.
"They just have to wait for Democrats to recover their reputation as tax and spend politicians who woefully underpredict the cost of everything they propose."
There is a fundamental problem in that. The entire debate of 'how much will it cost' and 'who will it cover' misses the underlying point of what the Democrats want to do. There's a basic, core political reason why nationalized health care has been near and dear to the hearts of the Democratic Party for fifty years and more, why it was the FIRST thing they tried to do when they gained full control in 1992 and why it was immediately revived upon gaining full control in 2008, and that reason has nothing to do with health care quality, availability, or 'social justice' as such.
What the Dems want is an American version of the British NHS. Everything they do on this subject is done with that end goal in mind, they don't mind getting there by increments but that is where they want to go, and the reason is that it changes everything once it is in place.
Once a NHS (by whatever name) is in place, you have a huge and well-organized voting bloc of NHS employees and 'associated interests' with a vested self-interest in maintaining and expanding their own size and scope and budget.
Once you have people _dependent_ on them for their health care, any potential change or reduction in budget or scope becomes perceived as a direct personal threat to them. Any attempt to reduce, or even slow the growth and influence, of this new NHS would then be the seed of a super-sized version of 'Mediscare'.
We need only look to English politics to see what I'm talking about.
The Dems _don't care_ if it busts the budget or not, that's not the point to them. They _don't care_ whether it 'works' or not. They want to create the locked-in political base it represents. That's why all talk of 'compromise bills' misses the point. They're counting on creating their new health service and then using it as the tool to make sure their ideology (and to a large extent they themselves) are guaranteed reelection year after year.
Once it's in place, 'tax and spend' won't be a pejorative, it'll be SOP and almost impossible to undo short of total collapse.
Traditionally, the CBO underestimates benefits and overestimates costs." -- zosima
No, the CBO tends to overestimate benefits and underestimate costs. You have it exactly backwards.
The CBO numbers for the Baucus bill are simply bogus. They're based on fantasy-world assumptions about spending, and deliberately calculated to fit within a ten year time-frame in which taxes rise immediately and benefits come later. So even the fantasy-figures are bogus.
"They just have to wait for Democrats to recover their reputation as tax and spend politicians who woefully underpredict the cost of everything they propose."
Right, as opposed the Bush administration who cut taxes, predicated a 60 billion dollar price tag for Iraq, fired the guy who said it would be 200 billion, and now almost a trillion dollars in, they paid for it all by borrowing from China and Japan.
Megan, you're better than this. Try not to keep your "Bush Years Forgt Machine" turned off.
The right and its spinners like Megan are so laughable....no they are totally pathetic really. Firstly it was never going to pass. Then it was going to pass but be completely innocuous. Now it's going to pass and be a massive failure. Then why oh why did the sainted Bill Kristol warn that it ever passed it would be the end of Republicanism as we know it. Get real Megan and stop being so silly, basically the country wants it and when they have it their love affair with it will be every bit as passionate as Bill Kristol predicted. Take a look at SS and Medicare if you want confirmation.