Critical Condition

Governors Alarmed about Health-Reform Costs

The nation’s governors have joined the chorus of public officials and citizens voicing serious concerns about the costs and consequences of the sweeping health reform bills that President Obama is trying to ram though Congress.

Democratic and Republican governors meeting this weekend in Biloxi, Miss., said they fear the reform legislation would dump huge costs on the states at a time their coffers are running dry under the pressures of the recessionary economy.

The bills making their way through Congress would dramatically increase eligibility for Medicaid, the program jointly funded by states and the federal government to fund health care for the poor. If the federal government increases eligibility, this could be “the mother of all unfunded mandates,” according to Gov. Phil Bredesen of Tennessee, a Democrat.

But it’s not only state budgets that are in jeopardy. The Congressional Budget Office told Congress that the health-reform bills it is considering would worsen the federal government’s already bleak budget outlook, increase the deficit, and drive the nation more deeply into debt.

Worse still, the CBO said the bills won’t meet the president’s promise of reducing health costs over the long term, saying instead the legislation would “significantly increase” costs. 

Undaunted, two of three House committees last week approved legislation with a price tag of more than $1 trillion. Even with the illusionary “pay-fors” from tax hikes and spending cuts, the CBO also said that the House bill still will add another $240 billion to the federal deficit over the next ten years.

The Congress is planning to pay for reform largely with a tax increase on the rich. It is astonishing that Congress would even be considering huge tax increases in our still-collapsing economy. Small business owners are especially outraged because the tax increases would hit them hard, drying up funds to hire new workers and get their businesses going again.

The legislation also would force businesses to pay for an expensive government-mandated health plan or pay an additional 8 percent payroll tax. Combined with other payroll taxes, this adds 25 percent to the cost of hiring each new worker. People with marginal skills trying to get their foot on the ladder will be hit hardest.

So it’s also a tax increase on the poor.

Americans with health insurance are worried that if the reform plan passes, they could lose their coverage, despite the president’s promises to the contrary. They are right to be concerned. An outside study by The Lewin Group, an economics consulting firm, concluded that as many as 120 million Americans could lose their private health insurance if the reform law creates a new government health insurance plan — the final step toward dragging everyone into government-controlled health programs.

Despite this, many Americans believe that all Mr. Obama wants to do is tax the rich to provide health insurance for the poor. But nothing could be further from the truth.

Medicaid and the State Children’s Health Insurance Program are just two of the programs already providing care for the poor. Nearly 10 million of the uninsured already are eligible for these programs and are not signed up. Another 10 million are illegal immigrants who wouldn’t be covered under any of the reform plans currently under consideration. And up to 20 million more are uninsured because they are moving between jobs and are temporarily without insurance. 

Instead, the president’s plan would put one-sixth of our economy under government control with huge implications for the middle class. It would impose a raft of new federal regulations on health insurance following models that have failed in state after state. Massachusetts was the first state to enact sweeping health reform that requires everyone to have insurance, and its health costs now are 33 percent higher than in the rest of the country.

A recent Washington Post-ABC News poll found that most Americans are “are very concerned that health-care reform would lead to higher costs, lower quality, fewer choices, a bigger deficit, diminished insurance coverage and more government bureaucracy.” 

They are right. The grown-ups in the debate are in the Senate Budget and Finance Committee are still working to find savings to pay for health reform within the health sector and to bring Republicans into the conversation so they can get a more moderate bill with bi-partisan support.

There are better ways to solve these problems than a government take-over of our health sector. Rep. Paul Ryan (R., Wisc.), Sen. Tom Coburn (R., Okla.), and several of their colleagues have introduced legislation aptly called the Patients’ Choice Act. It provides a path to universal coverage by redirecting current subsidies for health insurance to individuals. It also provides a new safety net that guarantees access to insurance for those with pre-existing conditions and helps millions of people out of the Medicaid ghetto. 

It accomplishes the goals of moving toward universal health coverage, making health insurance portable, and getting costs under control. And, rather than turning the health sector over to government, it puts doctors and patients in control. What a novel idea!