Tag: Health

Higher Taxes for Health Care, Fewer Jobs

President Obama broke his pledge not to raise taxes on lower- and middle-income families with his large tobacco tax increase back in February. It appears that the increase is not just hurting tobacco consumers, but also hurting workers in the cigar industry. From Tampa Bay Online:

Tampa will lose part of its cigar heritage in August when Hav-A-Tampa shuts its factory near Seffner and lays off about 495 employees, closing a factory that has been operating since 1902.

Several things conspired to hurt Altadis’ sales, McKenzie said, including the recession and the growth of indoor smoking bans. The bans have especially hurt sales in cold-weather states, where it’s impractical to smoke a cigar outdoors in the winter, he said.

However, the company attributed much of its trouble to the State Children’s Health Insurance Program, or SCHIP, a federal program that provides health insurance to low-income children. It is funded, in part, by a new federal tax on cigars and cigarettes. McKenzie couldn’t say how much sales of Hav-A-Tampa cigars had fallen off, but the numbers have dropped significantly, he said.

Previously, federal excise taxes on cigars were limited to no more than a nickel, said Norman Sharp, president of the Cigar Association of America trade group. The tax increase, which took effect April 1, raises the maximum tax on cigars to about 40 cents, Sharp said.

This health-tobacco legislation raised taxes $65 billion over 10 years. Imagine the damage that would be caused by the giant health bill currently moving through Congress, which will cost $1 trillion or more over 10 years.

Hat Tip: Tad DeHaven

Ed Crane Describes a Libertarian Approach to Health Care Reform

Last week, Cato hosted an all-day conference on health care reform, which included expert opinions from across the political spectrum.  Cato Founder and President Ed Crane started the event with a talk about a libertarian approach to reforming health care, which would reduce federal involvement, increase competition, decouple health care from employment and increase the amount of doctors available.

You can find all of Cato’s reasearch on health care reform at Healthcare.Cato.org.

You’re for Fair Competition, You Say?

Len Nichols is the top health-policy guy at the New America Foundation.  He’s spent the past few months trying to negotiate a compromise between the Left and the far Left over the creation of a new government health insurance program that would compete with private insurers.  With John Bertko, Nichols wrote a paper on how to create a level playing field between a government program and private insurance.

Yesterday’s CongressDailyAM, however, had an interesting article that sheds light on Nichols’ sense of fair play.  According to the article:

Nichols has floated the idea of writing into law a requirement that certain changes to the system would require a two-thirds vote to pass rather than a simple majority.

Never mind that such a requirement would guarantee that the new program would breed even more stagnation and death than Medicare and Medicaid do.

What Nichols proposes is that a Democratic Congress should be able to create a new Fannie Med by a simple majority vote in each chamber, but if a subsequent (Republican?) Congress wanted to repeal it, they should face a higher bar.

Keep that in mind when you hear talk about a level playing field.

Panic Starting to Set in Among Advocates of Government-Run Health Care

Until now the usual suspects hoping to win a government takeover of America’s health care system appeared to be confident of victory.  No longer, however.  Some of them, at least, are starting to notice the fact that health care “reform” will be incredibly expensive at a time when the U.S. government has no money.  Indeed, the problem is not that the Treasury is empty.  Rather, it is filled with IOUs for which foreign creditors, such as China, now worry about collecting on.

Writes Jonathan Cohn at the New Republic:

Attention fellow liberals who want health care reform: You are in danger of losing the fight for universal health insurance. And it’s not only–or even primarily–because of the public plan.

It’s because of the money.

Well, contrary to the belief of many on the Left, money does matter.  As much as we all might wish, money does not grow on trees.  And running the printing presses isn’t the panacea that some believe.

Cohn seems surprised that the Congressional Budget Estimate came in so high, but a complete bill almost certainly would cost even more.  Thankfully, the government-takeover bandwagon has hit a large bump, and even larger barriers must be overcome for health care “reform” to triumph.

“Why Health Care Reform Could Fail Again”

Former Clinton administration adviser Stanley Greenberg has an illuminating article in The New Republic.  Greenberg compared the polls he did during the Clinton health care debate to his recent polling on President Obama’s proposed reforms:

Perhaps I should know better than to have sensed any profound changes in the country. And, when I got the results for the new survey, I looked at each question warily, remembering how it all went badly wrong. As I reached the last of the questions, I exclaimed: “Oh no. It can’t be. Nothing’s changed.”…

The country divides evenly on whether the greater risk is an unchanged status quo or government reforms that “create new problems.” And, finally, Obama might want to pay attention to how closely his situation echoes Clinton’s. Then and now, more people favor the president’s health care plan than oppose it, but the supporters make up less than a majority.

If anything, I found on most of these questions that the desire for change and support for reform was slightly stronger 16 years ago, underscoring the importance of learning some lessons from that history…

Our inability to talk credibly about how we would reduce health care spending or costs for individuals and the country built a contradiction into all our efforts–the more we talked about the comprehensiveness of our plans, the more voters worried this would yield higher premiums or higher taxes. Very quickly, voters came to conclude that their families would face higher costs.

And those dynamics are still in play. In my recent polling, I found that voters are skeptical about claims that reform will reduce costs and personal health outlays. Claims about simplicity, information-technology modernization, and best practices don’t seem to be enough to persuade them otherwise…

It may surprise you that Obama has already lost seniors, according to our current survey–only one-third approve of his plan. It doesn’t take a rocket scientist to see there isn’t much in it for them. There is already talk of carving out major savings from Medicare and, unlike during Clinton’s battle, no offer of a new drug benefit. Clearly, they need to see health care gains for themselves too…

With few illusions about the old system, union households are strong supporters of Obama’s proposal. Yet the members will ultimately judge whether the plan is good for their families–and I’m certain that all the talk about taxing insurance contributions has not gone unnoticed…

[W]hile voters have great confidence in Obama and his administration, they are worried about the deficits and spending and the government bailouts of the irresponsible. So, while voters want to see a rebalancing away from greed and toward the public good, almost half the citizenry is worried the government may get it wrong.Ross Perot is a distant memory, but his more libertarian, blue-collar male voters are very much alive. They are pretty certain government will mess this up–and only about 30 percent support Obama’s health care plan right now. With Republicans reciting their mantra about no “government takeover” of health care, the plan’s opponents have found a common text…

Most are not at all satisfied with a system that has forced them to trade higher wages for continued health insurance coverage and other compromises. But those personal compromises to get satisfactory coverage will mean people can live a little longer with the status quo and want to make sure the proposed changes really will make things better for their families.

Those who support real health care reform should take note.

Sen. Kennedy’s Budget-Breaking “Reform” Bill

It appears that the Obama administration has decided to disown the venerable Senator.  No wonder.  The Congressional Budget Office estimated the ten-year cost of Sen. Kennedy’s bill at $1 trillion, but admitted that its analysis was incomplete. 

Now the consulting group HSI Network, LLC comes foward with an estimate of $4 trillion:

The Senate Committee on Health, Education, Labor and Pensions (HELP) have proposed a health reform bill called the Affordable Health Choice Act (AHC) that seeks to reduce the number of uninsured and increase health system efficiency and quality. The draft legislation was introduced on June 9th, 2009. The proposal provided adequate information to suggest what the impact would be of AHC using the ARCOLA™ simulation model. AHC would include an individual mandate as well as a pay or plan provision. In addition, it would include a means-tested subsidy with premium supports available for those up to 500% of the federal poverty level. Public plan options in three tiers: Gold, Silver and Bronze are proposed in a structure similar to that of the Massachusetts Connector, except that it is called The Gateway. These public plan options would contain costs by reimbursing providers up to 10% above current reimbursement rates. There is no mention of removing the tax exclusion associated with employer sponsored health insurance. There is also no mention of changes to Medicare and Medicaid, other than fraud prevention, that could provide cost-savings for the coverage expansion proposed. Below, we summarize the impact of the proposed plan in terms of the reduction on uninsured, the 2010 cost, as well as the ten year cost of the plan in 2010 dollars.

HELP Affordable Health Choices Act

  • Uninsurance is reduced by 99% to cover approximately 47,700,000 people
  • Subsidy - Tax Recovery = Net cost:
    • $279,000,000,000 subsidy to the individual market
    • $180,000,000,000 subsidy to the ESI market with
    • Net cost: $460,500,000,000 (annual)
    • Net cost: $4,098,000,000,000 (10 year)
  • Private sector crowd out: ~79,300,000 lives

HSI figures that a lot more people will take advantage of federal health insurance subsidies, driving costs up far more than indicated by the CBO figure.  (H/t to Phil Klein at the American Spectator online.)

Of course, no one knows what the bill would really cost in operation.  But the history of social insurance and welfare programs is sky-rocketing expense well beyond original projections.  Go back and look at the initial cost estimates for Medicare and Social Security, and you will run from the room simultaneously laughing and crying.

Health care reform would be serious business at any moment of time, but especially when the country faces $10 trillion in new debt over the next decade on top of the existing $11 trillion national debt.  And with the $100 trillion Medicare/Social Security financial bomb lurking in the background, rushing to leap off the financial cliff with this sort of health care legislation would be utterly irresponsible.

Cato on Health Care Reform

We are now facing some of the most sweeping changes health care has seen in decades. Reform is needed, but increasing government control over one-sixth of the economy and over important personal and private decisions – as many of the proposals aim to do – would harm American taxpayers, health care providers, and patients.

This week, the Cato Institute launched Healthcare.Cato.org, which highlights Cato’s contributions to the health care debate. The resources provided on the site provide in-depth analyses of health care issues and reform initiatives, and underscore the ways in which free-market reforms, increased consumer choice, and energized competition – not more government control – improve the quality and cost-efficiency of health care.

Please check back regularly for updates and new resources!

Update: The Cato Institute Conference on Health Care Reform will be Webcast live from 9:00-5:00 PM Wednesday.

Featured speakers:

  • Rep. Paul Ryan (R-WI)
  • Rep. Michael C. Burgess, M.D. (R-TX)
  • Rep. Jason Altmire (D-PA)
  • Karen Davenport, Director of Health Policy, Center for American Progress
  • Douglas Holtz-Eakin, Former Director, Congressional Budget Office, and Director of Domestic and Economic Policy for the McCain presidential campaign
  • Tom G. Donlan, Barron’s
  • Karen Tumulty, Time Magazine
  • Susan Dentzer, Health Affairs
  • John Reichard, Congressional Quarterly

Full schedule of events and Webcast, here.