Politics & Policy

The President’s Imaginary Health Plan

The president launched a last-ditch effort to pass a government takeover of American health care yesterday. To hear him tell it, his plan would let every American keep the health insurance he has today if he wants to. And it would reduce premiums, cut taxes for the middle class, slow the pace of rising costs, reduce the federal budget deficit, and keep bureaucrats out of health-care decisions too.

This latest presidential health-care pitch might have left some Americans scratching their heads. What plan is he talking about, they might ask themselves. Because the plan he described doesn’t remotely resemble anything the Democrats have assembled over the past year.

The Senate-passed bill, upon which the president’s latest offering is modeled, would not let Americans keep the insurance they have today. It would impose deep cuts in the private-insurance component of Medicare, called Medicare Advantage. Those cuts would force millions of seniors out of their current coverage, against their will. They would get much less by way of benefits to boot. And many millions of workers would lose their job-based plans as employers opted to pay the government’s fines instead of offering heavily regulated coverage themselves.

The Congressional Budget Office has also found that the Senate bill would increase, not decrease, premiums, as the president was forced to admit at the Blair House summit meeting last week. One-size-fits-all federal insurance requirements would force millions of Americans to buy more expensive coverage than they have selected in today’s marketplace. Research by a private actuarial firm shows that premiums would jump by more than 50 percent in the individual market and 20 percent for those in small employer plans.

The Senate bill would also impose massive middle-class tax increases, not cuts. There are new levies on insurers and device and drug makers in the Senate plan that would get passed on directly to middle-class consumers.

The president’s claims of cost control and fiscal responsibility are a complete illusion. He omits from his accounting the $371 billion in additional ten-year spending he has proposed for Medicare physician fees, and double-counts premium collections from a separate program to pay for his health-care plan.

Moreover, the deep cuts in Medicare the president relies on to pay for his entitlement expansions would not come from waste and abuse, as he asserted. He would impose arbitrary reductions in payments for every hospital and nursing home in the country, without regard to assessment of quality or patient needs. His own chief actuary says these cuts would push one in five facilities into deep financial distress, which means they are completely unrealistic.

The president’s plan also relies on revenue collected from the so-called “Cadillac tax” on expensive insurance plans. Only the president doesn’t want to enforce it himself. He proposes to delay its implementation to 2018, long after he will have left the presidency. Yet he wants us to believe we can bank on the hundreds of billions of dollars this tax would supposedly raise in a second decade of implementation.

CBO says the president’s new entitlement spending would reach $200 billion by 2019, and then grow 8 percent every year thereafter. In other words, it would be another runaway entitlement program, piled on top of the unaffordable ones already on the books.

What the president described in his presentation yesterday does not exist. What does exist is a bill the public has resoundingly rejected in every way it can. And for very good reasons.

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