Tag: universal health care

The Coburn-Burr-Ryan-Nunes Mandate-Price-Control Bill

Today, Senators Tom Coburn (R-OK) and Richard Burr (R-NC), along with Reps. Paul Ryan (R-WI) and Devin Nunes (R-CA) announced that they will introduce a health care reform bill. If my reading of the bill summary is correct, their bill would:

  • Mandate that states create a new regulatory bureaucracy called a “State Health Insurance Exchange,”
  • Mandate that all plans offered through those exchanges meet federal regulatory standards,
  • Mandate “guaranteed issue” in those exchanges,
  • Mandate “uniform and reliable measures by which to report quality and price information,”
  • Impose price controls on those plans by prohibiting risk-rating,
  • Launch a government takeover of the “insurance” part of health insurance, by means of a “risk-adjustment” program intended to cope with the problems created by price controls, and
  • Fall just short of an individual mandate by setting up (mandating?) automatic enrollment in exchange plans at “places of employment, emergency rooms, the DMV, etc.” – essentially, trying to achieve universal coverage by nagging Americans to death.

Needless to say, I am troubled.

The bill summary is self-contradictory. On the one hand, it lists “No Tax Increases” as a core concept. Do its authors not know that imposing price controls on health insurance premiums imposes a tax on healthier-than-average consumers? And where do they think the money for “risk-adjustment” payments will come from? Heaven?

The bill sponsors seem to want to cement in place the monopoly regulation that currently exists at the state level – when they’re not encouraging Congress to take over that function. Have they abandoned their colleague Rep. John Shadegg’s (R-AZ) proposal to allow for competitive regulation of health insurance?

And if Massachusetts created an “exchange” on its own, why do other states need federal legislation?

The bill includes some ideas for which I have more sympathy, like its tax-credit proposal and expanding health savings accounts.

But the above provisions would sow the seeds of a government takeover of health care – so much so that The Washington Post’s Ezra Klein is salivating:

The word of the day is “convergence.” That – and that alone – is the definitive message of the conservative health reform alternative developed by Sens. Tom Coburn (Okla.) and Richard Burr (N.C.), as well as Rep. Paul Ryan (Wisc.). For now, some of the key provisions are about as clear as mud. The plan’s changes to the tax code, in particular, are impossible to discern. So I’ll do another post when I can get some clarity on those issues. The politics, however, are perfectly straightforward.

A superficial read of the Patients’ Choice Act – which I’ve uploaded here – would make you think you’re digging into a liberal bill. A fair chunk of the rhetoric is lifted straight from Sen. Ted Kennedy’s office. “It is time to publicly admit that the health care system in America is broken,” begins the document. “Health care is not a commodity in the traditional sense,” it continues. “States should provide direct oversight of health insurers to make sure they are playing by fair rules,” it demands. The way we pay private insurers in Medicare “wastes taxpayer dollars and lines the pockets of insurance executives,” it says. Elsewhere, it praises solutions that have worked in several European countries.”

And though it’s still too early to say how the policy fits together, it’s clear that many traditionally Democratic concepts have been embraced. To put it simply, the plan wants to encourage a version of the Massachusetts reforms – which it calls a “well-known, bi-partisan achievement of universal health care” – in every state. There are some differences, of course. The plan doesn’t have an individual mandate. It doesn’t have an obvious tax on employers. But it strongly endorses State Health Insurance Exchanges. And that, for Republicans, is a radical change in policy.

This idea – present in every Democratic proposal but absent in Arizona Sen.John McCain’s plan – would empower states to create heavily regulated marketplaces of insurers. The plans offered would have to “meet the same statutory standard used for the health benefits given to Members of Congress.” Cherrypicking would be discouraged through risk adjustment, which the PCA calls “a model that works in several European countries.” The government would automatically enroll individuals in plans whenever they interacted with a government agency and states would be able to join into regional cooperatives to increase the size of their risk pool.

In essence, Coburn, Burr, and Ryan are abandoning the individual market entirely. Like Democrats, they’re arguing that individuals cannot successfully navigate the insurance market, and they need the protection of government regulation and the bargaining power that comes from a large risk pool. This is literally the opposite approach from McCain, who attempted to unwind the employer-based insurance and encourage families to purchase health coverage on the individual market. The core elements of this plan, in other words, make it the same type of plan Democrats are offering. A plan that enlarges consumer buying pools rather than shrinks them. It’s pretty much exactly what I’d expect a Blue Dog Democrat to propose. And it’s further evidence that the argument over health reform is narrowing, rather than widening. And it’s narrowing in a direction that favors the Democrats.

UPDATE: After discussions with Sen. Coburn’s staff, I happily issued a few corrections. Still, concerns remain.

Are Health Care Industry Lobbyists Really Proposing to Reduce Their Members’ Revenue by $2 Trillion?

I smell a rat.  Lobbyists never advocate less revenue for their members.  Ever.  If they did, they would be fired and replaced with new lobbyists.

The industry wants universal coverage, because that means more customers and more revenue.  But universal coverage is expensive: it could cost $2 trillion itself.

If you tax your way to $2 trillion, the people revolt.  If you try to “free up” the money by cutting payments to the industry, the industry revolts.  Senate Finance Committee Chairman Max Baucus (D-MT) says he has reforms that will reduce health care spending over time, but the Congressional Budget Office won’t recognize those assumed savings.

So the industry may simply be trying to help Sen. Baucus cook the books by signaling, “Hey CBO – we’ll make sure those reforms work!” – with every intention of fighting those spending reductions later on.

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To Reform Health Care, Obama Must First Convince His Advisers

In The New Republic, Jonathan Cohn makes some interesting observations about how Barack Obama’s campaign and administration approach policy issues, particularly health care.

In early January, most of Barack Obama’s senior staff assembled with the president-elect … It was a pivotal moment in Obama’s transformation from candidate to commander-in-chief. Obama’s advisers had taken all of his campaign pledges, factored in his promise to reduce the deficit, and put together a provisional blueprint for governing. For the first time, Obama would get a sense of how his proposals fit together in the real world.

Does Cohn suggest that candidate Obama just threw out proposals without considering their cumulative, real-world impact?  That Obama launched a new administration with insufficient planning??  Perish the thought.

Obama … said he was mostly happy with what his advisers had produced. Investments in energy and education, plus real progress on reducing the deficit–it was all in there, Obama noted. But then the president-elect turned to his one major concern: a key item that was not, in his opinion, sufficiently funded. “Here’s my guidance to you,” one participant recalls Obama saying to the group. “Protect health care.”

It wasn’t the first time that health care had seemed to get short shrift from Obama’s advisers. Nor would it be the last. Indeed, there were moments during the transition and the early weeks of the administration when it appeared that the push for comprehensive health care reform might collapse before it had even begun. During this time, a debate raged inside the administration, with some senior officials arguing that the new president should wade into health care gingerly–or even postpone it altogether–because it would cost too much, distract from other priorities, and carry huge political risks.

Ultimately, however, these arguments failed to carry the day, and health care reform, against what occasionally seemed like long odds, managed to find a sizeable place in Obama’s budget…

The divide among Obama’s counselors was never over whether to pursue health care reform or even what it should look like in the end … What divided Obama’s team was the question of how to pursue reform–in particular, how quickly.

That tension stretched back to the campaign, when Obama’s political strategists advised him to soft-pedal the topic. One of them was David Axelrod. Although personally acquainted with the flaws in our health care system because of his disabled daughter, he also understood public opinion: The middle-class voters whose support politicians covet were worried about the cost of insurance, but their enthusiasm for universal coverage seemed shallow. Obama, though, always insisted on keeping health care prominent in the election.

Why so much dissension in the ranks? Partly because the nation faces much more immediate problems.

Axelrod’s anxiety hadn’t dissipated since the election. And now he had a new ally in Larry Summers, whom Obama had appointed to head the National Economic Council. One concern for Summers was the diversion of presidential and staff attention from other issues, like the economy.

But the dissension is also because Obama’s advisers understand just how difficult it will be to achieve universal coverage.

Mostly, though, Summers worried about money. Experts generally believe it will take years before better use of information technology, more preventive care, and other reforms start to yield serious savings. At least in the short run, health care reform is therefore likely to add to the government’s financial burden–during a time of rising deficits. This made Summers uncomfortable.

How bad was the dissension?

Particularly in Obama’s absence, the voices of the skeptics often predominated. “It was scaring the hell out of the rest of us,” says one of the advisers who favored more aggressive action.

Ultimately, Obama insisted on putting $634 billion in his budget to fund health care reform.  But Cohn acknowledges that Obama may be over-reaching.

At a time when the economy is collapsing, perhaps Obama can’t afford the distraction of such a major policy effort; at a time when the government is pumping out so much money for other priorities, perhaps it’s foolish to incur a new obligation that, if carried out by the book, still may not pay for itself in under ten years. And, even if it makes sense to seek health care reform this year, Obama’s decision to allocate health care money now could make the budget tougher to pass–inviting an extra political fight that might make reform even harder to achieve.

Nice thing about Cohn: he may be a high priest in the Church of Universal Coverage.  But he’s a darned good journalist.

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Week in Review: A Health Care Summit, School Choice and Ayn Rand

Obama Holds White House Health Care Summit

President Obama hosted almost 150 elected officials, doctors, patients, business owners, and insurers on Thursday for a White House forum on health care reform. The Washington Post reports Obama “reiterated his intention to press for legislation this year that dramatically expands insurance coverage, improves health care quality and reins in skyrocketing medical costs.”

Cato senior fellow Michael D. Tanner responds:

The Obama administration and its allies mainly seek greater government control over one-seventh of the U.S. economy and some of our most important, personal, and private decisions. They favor individual and employer mandates, increased insurance regulation, middle-class subsidies, and a government-run system in competition with private insurance. On the other side are those who seek free market reforms and more consumer-centered health care.

These differences are profound and important. They cannot and should not be papered over by easy talk of bipartisanship.

In a new article, Tanner explains why universal health care is not the best option for Americans seeking a better system:

If there is a lesson which U.S. policymakers can take from national health care systems around the world, it is not to follow the road to government-run national health care, but to increase consumer incentives and control.

To find out how the free market system can increase health care security, read University of Chicago professor John H. Cochrane’s new policy analysis, which explains how markets can “provide life-long, portable health security, while enhancing consumer choice and competition.”

Battle Over Washington DC School Choice Program Continues

Congressional Democrats are considering cutting the funding for a pilot education program that sends low-income children in Washington, D.C., to private schools through vouchers. The program serves as an example of how helpful school choice programs can be to children who are born into families that cannot afford to send them to good schools.

Adam Schaeffer, policy analyst at Cato’s Center for Educational Freedom, says even the mainstream media is on the side of school choice this time.

In a recent study, Andrew J. Coulson, director of Cato’s Center for Educational Freedom, demonstrates the superiority of market-based education over monopolies.

For comprehensive research on the effectiveness of charter schools, private schools, and voucher programs, read Herbert J. Walberg’s book, School Choice: The Findings.

Cato Celebrates Women’s History Month

The Cato Institute pays homage to three women during Women’s History Month who unabashedly defended individualism and free-market capitalism early in the 1940s — an age that widely considered American capitalism dead and socialism the future.

In 1943, Isabel Paterson, Rose Wilder Lane and Ayn Rand published three groundbreaking books, The God of the Machine, The Discovery of Freedom and The Fountainhead, that laid the foundations of the modern libertarian movement.

On Rand’s centennial, Cato executive vice president David Boaz highlighted the many contributions she made to liberty:

Although she did not like to acknowledge debts to other thinkers, Rand’s work rests squarely within the libertarian tradition, with roots going back to Aristotle, Aquinas, Locke, Jefferson, Paine, Bastiat, Spencer, Mill, and Mises. She infused her novels with the ideas of individualism, liberty, and limited government in ways that often changed the lives of her readers. The cultural values she championed — reason, science, individualism, achievement, and happiness — are spreading across the world.