Critical Condition

Preliminary Impressions of the Reconciliation Bill

The CBO’s cost estimate of the reconciliation bill is preliminary, and therefore so are my comments.

Democrats have chosen to raise a slew of taxes, but we don’t yet know what those tax increases will be.

Democrats are claiming the reconciliation bill combined with the Senate bill would reduce the deficit even more than the Senate bill alone. But the reconciliation bill adds more of the same sort of budget gimmicks that the Senate bill employs. The Senate bill assumes that Congress will tolerate Medicare spending cuts that the program’s chief actuary calls “doubtful” and “unrealistic.” Likewise, the reconciliation bill increases spending on private Medicare Advantage plans, Medicaid payments to primary-care physicians, and hospitals that care for the uninsured — but then assumes that Congress will cut these subsidies in the future.  Again, highly doubtful

Under the Senate bill, 34 million more Americans would receive government-subsidized health insurance.  House Democrats would boost that number to 35 million.  That’s 35 million Americans who would face implicit tax rates of 100 percent or more if they try to climb the economic ladder.

Compared to the Senate bill, the reconciliation bill places an addition 1 million Americans in the Medicaid program, where access to care is poor.

The Senate bill encourages undocumented aliens to come to the United States to receive government subsidies.  Undocumented family members would be counted when determining a family’s health-insurance subsidies. A family that takes in an undocumented family member would receive larger subsidies.

It is fitting that Democrats included the final stage of a slow government takeover of the student-loan industry, because it shows that this legislation is yet another step in the ongoing government takeover of health-care sector.

Michael F. Cannon — Mr. Cannon is director of health-policy studies at the Cato Institute and co-author of Healthy Competition: What’s Holding Back Health Care and How to Free It.

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