Critical Condition

The Fix Is Not In

Cost remains the central issue in the health-reform debate, and the news last week was not good for leaders on either side of Capitol Hill — first with a vote in the Senate blocking a deficit-spending trick and then with a new report showing the House bill would actually increase health costs.

The vote last Wednesday on the “Doc Fix” stunned everyone, even, apparently, Majority Leader Harry Reid (D., Nev.). His plan was to shove $247 billion under the carpet by pretending that a permanent increase in Medicare’s payment rates to doctors didn’t count toward the costs of overall health reform. But he ran into a firestorm of opposition, with twelve Democrats plus Independent Joe Lieberman voting with all 40 Republicans to reject the ploy (final vote 47–53).

The reason: The fix wasn’t paid for. No one wants to see doctor payments cut by 21 percent, as they will be without congressional action, but the Reid plan would have added to the deficit — not “one dime,” but $247 billion. Fiscally responsible Democrats and Republicans joined forces to just say no.

This means it is going to be much more difficult for members of Congress to stuff the whole reform package into the $900 billion bag the president has given them. The $400 billion in Medicare and Medicaid “savings” will not happen, and Reid and other leaders are still scrambling to find a mix of $500 billion in new taxes that can win enough votes to pass. No one has put together that magic formula.

In the House, an analysis of the main health-reform bill gave members heartburn. The Republican leader of the Ways and Means Committee, Rep. Dave Camp (Mich.), asked the chief actuary of the Centers for Medicare and Medicaid Services, Rick Foster, to analyze the bill his committee had produced.

Foster concluded that if the bill passed, health expenditures would be 2.1 percent higher than they would be otherwise. Further, just 93 percent of those in America would have health insurance, millions of people would lose the private health coverage they have now, and individuals and businesses would pay $182 billion in penalties over the next decade for violating federal health-insurance mandates.

Speaker Nancy Pelosi (D., Calif.) discounted the findings, saying that she has moved past the House Ways and Means bill and therefore the analysis was moot. But most insiders say that bill is indeed the basis for the negotiations taking place behind closed doors.

So let’s get this straight: Congress is planning to add at least $1 trillion to federal spending, throw 13 million seniors off of their Medicare Advantage plans, impose half a trillion dollars in new taxes, require individuals and businesses to buy health insurance that is more expensive than many can afford now — and tax them if they don’t comply — and all of this will cause health-care costs to actually go up? And we still don’t get to universal coverage?

While the American people clearly believe that health reform is needed, the policies being developed in Congress are increasingly out of step with public opinion. The Galen Institute just released a new poll in which we asked people what they think of the proposals that Congress is considering (rather than the innocuous, mushy questions many other pollsters ask).

We found that people don’t want to be forced to buy health insurance or pay a new tax, they don’t want seniors’ Medicare benefits to be cut to pay for coverage for the uninsured, and they don’t want the middle class to have to pay higher taxes. Instead, they want a targeted approach to reform.

It is not clear whether Congress will eventually heed the will of the American people, but it is clear that the leadership is charging ahead with a sweeping and aggressive reform plan without a full airing and debate.

– Grace-Marie Turner is president of the Galen Institute, a non-profit research organization focusing on market-based health reform.