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Critical Condition

NRO’s health-care blog.

Closer, Not Better



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The Baucus bill may have passed the Senate Finance Committee with what passes for “bipartisan support” these days, but it still has a lot of flaws, and critics on both the left and the right. 

At $829 billion, it’s a very expensive way to reform health care. Even if the bill’s proponents claim that it is deficit neutral turn out to be accurate, that doesn’t make it cost-free. The $829 billion has to come from somewhere, namely from Medicare cuts and tax hikes. 

The problem is that while the bill’s tax hikes would almost certainly go into effect, it’s not at all clear that the cuts would as well. The most dubious cut is the one time physician payment cut in 2011, with subsequent year increases held below the rate of inflation. Based on past experience with physician cuts, this is extremely unlikely to happen. 

Another problem, noted by those on both sides of the aisle, is that under the plan 25 million people, including 17 million legal residents of the U.S., would remain uninsured in 2019.  $829 billion is an extremely expensive way to solve only 46% of the problem of the uninsured. Jeff Anderson’s simple plan, just plugged again by our friends at the Weekly Standard, covers the same percentage of Americans at a cost of only $75 billion over 10 years. 
  
The third main problem is that the bill will make insurance premiums more expensive. Democrats are enjoying taking shots at the AHIP-sponsored PricewaterhouseCoopers study, which found that family policy premiums will increase a cumulative amount of $20,700 between now and 2019, but that is not the only evidence that the bill would hike premiums. CBO director Doug Elmendorf said in the Finance Committee hearing on September 22 that “our judgment is that that piece of the legislation would raise insurance premiums by roughly the amount of the money collected.”

The bill may now be one step closer to passage, but the Senate appears to be no closer to addressing these significant problems.   



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