Critical Condition

A Speech, Not a Plan

President Obama’s speech before Congress soared with oratory but fell flat in delivering on his promise to present details or any substantive new policy initiatives for his health-care-reform plan.

He may get a few days of lift from the passion and the cheers, but the hard realities of policy will continue to chill prospects for getting sweeping reform legislation enacted. A few examples:

Paying for reform. The president said that “the plan I’m proposing will cost around $900 billion over ten years” and that “we’ve estimated that most of this plan can be paid for by finding savings within the existing health-care system, a system that is currently full of waste and abuse.”

He dropped talk of higher taxes on the rich to pay for the reform plan, perhaps after realizing that much of the burden would fall on small businesses. So, if we can believe his new statement, apart from some new taxes on health-insurance providers (which will just be passed along to consumers), the massive coverage expansions will be paid for by curtailing waste and abuse in Medicare and Medicaid and making them more efficient.

That doesn’t pass the laugh test. I testified before the House Energy and Commerce Committee in 2008 about seven rules that the Bush administration had written to curtail documented fraud and abuse in the Medicaid program. The fraud was documented by the Government Accountability Office and the Inspector General of the Department of Health and Human Services — things such as using Medicaid money to take people to Bingo games and to shop for party dresses.

But Congress has done everything it can to prevent implementation of the Bush rules to stop documented fraud. So what do you think the chances are that the Obama administration will be able to pay for its $900-billion reform plan mostly with savings from Medicare and Medicaid?

Rising health-care costs. Gone is the campaign promise that every family will save $2,500 a year on health-care costs when the Obama plan is implemented. This promise has been replaced with new language that says reform “will slow the growth of health-care costs for our families, our businesses, and our government.” (Emphasis added.)

Slowing the growth of health-care costs is a very different agenda. But even with that, President Obama he offered little or nothing of substance to explain how he would achieve that goal.

Keeping the coverage you have now. The president has changed his rhetoric about us not losing the coverage or doctors we have now. In this week’s address he said, “Nothing in this plan will require you or your employer to change the coverage or the doctor you have.” (Emphasis added.) The operable word is “require.”

But the employer mandate is still in place, and the president still wants the new public plan. So there would be every incentive for employers to drop coverage, pay the new tax, and send their employees packing to the public plan, many involuntarily. The Lewin Group says that between 88 million and 120 million Americans would find themselves in the new government-run health program. But they wouldn’t be required to join.

Do you find that reassuring?

What we heard last night from President Obama was a campaign speech that was alarming in his threats to those who oppose him.

The president began his speech by saying: “We know we must reform this system. The question is how.” We’re still waiting for the answer.

– Grace-Marie Turner is president of the Galen Institute, which promotes market-based ideas for health reform.