Politics & Policy

The Prognosis for Obamacare

Checking the vitals of Obama's health-care plan.

Can Obamacare be stopped? What should Republicans be doing right now to stop it? We asked some of our health-policy experts for assessments of our health-care-policy situation.

JAMES C. CAPRETTA

The House bill would add $239 billion to the federal budget deficit over the coming decade, according to Congressional Budget Office (CBO) projections. That’s bad enough, coming as it would on top of the $11 trillion in deficits that are already expected to occur over the period 2009 to 2019 under the Obama budget plan.

But that’s really just the beginning of it. 

Yesterday, CBO confirmed that the House bill would do even more fiscal damage in its second ten years. Here’s the crucial paragraph, from a letter sent by CBO director Doug Elmendorf to the four Ranking Republicans on the key House committees: 

The net cost of the coverage provisions would be growing at a rate of more than 8 percent per year in nominal terms between 2017 and 2019; we would anticipate a similar trend in the subsequent decade. The reductions in direct spending would also be larger in the second decade than in the first, and they would represent an increasing share of spending on Medicare over that period; however, they would be much smaller at the end of the 10-year budget window than the cost of the coverage provisions, so they would not be likely to keep pace in dollar terms with the rising cost of the coverage expansion. Revenue from the surcharge on high-income individuals would be growing at about 5 percent per year in nominal terms between 2017 and 2019; that component would continue to grow at a slower rate than the cost of the coverage expansion in the following decade. In sum, relative to current law, the proposal would probably generate substantial increases in federal budget deficits during the decade beyond the current 10-year-budget window.

That really should do it. The Blue Dogs are in this fight, in part, because of their stated concerns over growing budget deficits and unaffordable entitlements. The president reiterated again last week that he is determined to sign a bill that slows the pace of rising costs and improves our long-term fiscal outlook.

Well, here’s a bill that would go in exactly the opposite direction from what the authors say is their objective, according to CBO. It would add a third runaway health-care entitlement program to the two already on the books (Medicare and Medicaid) with no prospect in sight that spending on any of them will ever come in line with the government’s revenue base. A back-of-the-envelope estimate indicates the House bill would run up a cumulative federal budget deficit of at least $700 billion in its second ten years, and possibly much more. That’s on top of budget deficits that are already unsustainable and that will put the American economy at considerable risk of crippling interest rates or hyper-inflation. 

This is not a close call. The Democrats have no choice. For the sake of the country, they have to go back to the drawing board and work with Republicans on something much more sensible.

— James C. Capretta is a fellow at the Ethics and Public Policy Center and a health-policy and research consultant.

NEWT GINGRICH

As long as the economy continues to struggle, the American people will rightly view every proposal coming out of Washington through the prism of whether it will help or hurt job creation. That includes health reform. So will the bills sputtering through the Capitol help or hurt our economy?

The Congressional Budget Office said this week that the emerging House bill will hurt. Among several harmful effects, “Requiring employers to offer health insurance — or pay a fee if they do not-would be likely to reduce employment.” They went on to say that such a requirement would also “tend to reduce the hiring of workers at or near the minimum wage.”

However, educating the American people on this reality is only half the battle. Health care is about one-sixth of our economy. If the wrong health reform will hurt the economy, the right health reform can help it.

So the second step is to advance a pro-jobs vision for health reform as an alternative to the Left’s agenda. What would this reform look like?

At the Center for Health Transformation, we have developed a series of proposals that do not rely on big government bureaucracies or higher taxes to insure more Americans and reduce costs. It’s called “Health Based Health Reform.” You can learn more here.

– Former Speaker of the House Newt Gingrich is the founder of the Center for Health Transformation and chairman of American Solutions.

DAVID GRATZER

Advice to the GOP: Keep going.

It now seems possible — even likely — that neither the House nor the Senate will pass a bill before the August recess.

For the next few days, the message should be simple: Yes, American health care needs reform, but the House and Senate proposals are too bureaucratic, too costly, and, on top of everything, will leave too many uninsured.

Quote the CBO director. Talk about socialized medicine in Canada and Britain.

But in September, the debate will change. Expect the White House to re-tool: to dump the most controversial aspects of the plan and come back with a more coherent pitch.

The GOP will need to do more than simply oppose. American health care needs a different prescription than the one presently offered by the Democrats; let’s not forget, though, that the system is ill and in need of treatment.

Conservatives and Republicans will need to promote solid proposals that will foster competition, make it easier for individuals and small businesses to buy insurance, increase transparency, and promote health (not just health care).

Most likely, the president and his party will find a way to declare victory, and this battle won’t end the war — one that will stretch on for years. Individual choice and competition remain the alternative to the rationed care found in every other Western country.

— David Gratzer, a physician, is a senior fellow at the Manhattan Institute.

AMY MENEFEE

The stimulus-like blind-faith push on health care is in jeopardy and Republicans, along with the Blue Dog Democrats, are in prime position to stop the Democrats’ plan to impose government-run health care on the American people. Republicans need to make sure their constituents are aware of the disastrous effects of the bill — it undermines private insurance, puts government between you and your doctor, sets up rationing for health care, hikes tax rates, cuts Medicare, hurts small businesses, expands unemployment and expands the deficit by nearly a quarter of a trillion dollars.

Americans of both parties should call their elected officials to tell them to keep the government’s hands off their health care. They can go to members’ offices, attend rallies, and sign petitions like this one.

Speaker Pelosi has already said she is not afraid of August. She should give members of Congress the month to read the bill and hear from their constituents. Republican members can do a great service by actually reading the bill and letting people know what’s in it.

Republicans should listen to their constituents, explain better ways to do health care reform, and stop the train wreck of a health care bill that President Obama and Democratic leaders are trying to ram through Congress.

– Amy Menefee is communications director of Americans for Prosperity.

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