(Mike Zahara) – From wherever you’re sitting, whatever your point of view is on the issue, the current bills in conference for a final healthcare ‘reform’ measure are a train wreck.
It’s just terribly bad legislation all the way around, and the special interests on all sides will just keep shooting holes into a final bill once the final bill draft is completed.
That’s when the real fireworks will begin despite opponents having already spent over 130 million bucks so far; a record of lobbyist influence peddling!
To begin, absolutely nothing in any of the measures being condensed does anything to contain or control costs, and in fact it greatly expands the cost of healthcare, and any politician or interest group that is claiming that there can be any level of cost containment and savings with what’s currently on the table, is simply bald-faced lying to us.
They’re depending on revenue streams and contrived scenarios that are nothing more than wishful thinking with fingers crossed.
‘Opt-outs’ ‘co-ops’, and ‘triggers’ are insurance industry protection gimmicks and an insult to the intelligence of even the most simple-minded person.
Fluffy pronouncements that ending ‘waste and fraud’ is the key to the Holy Grail, are at best disingenuous and at worst, cynical. Why aren’t they ending waste and fraud today? Where are the mandatory prison sentences for any type fraud?
Here are the major issues and the cannon fodder that will be used:
Medicaid: Ask any of the 50 governors and the states’ legislators that deal with Medicaid issues and you will not find a single one of them who would not like to get out of Medicaid, but the current proposals greatly increases Medicaid, when it should be sun-setted out under real reform.
The reason is two-fold: One, is that USDHHS is loaded with federal employees and who with real reform, would be holding positions no longer necessary. Its federal employment protection and vote-insurance that Medicaid grows, not shrinks.
It also dumps a significant portion of ‘supposed reforms’ on the 50 states to cook the books and the federal numbers and make it appear it is ‘cost neutral’ and that it doesn’t add to the deficit.
However, it does nothing to corral or end the 50 states and their 50 different versions of Medicaid coverage and their individual porky coverage either. It does little to allow insurer competition in all 50 states under a ‘cover one state, you must cover all proposal’, only because insurance giants do not want any competition either from Medicare or each other.
It’s a federal sleight-of-hand that takes a significant portion of the uninsured and federally mandates to the states that they must cover them under Medicaid. The latest House version claims a CBO analysis that says that expanding Medicaid would be cheaper than steering people into the private market; what it doesn’t say is that it’s cheaper because the states will be shouldering half the costs!
The most generous estimates are that ‘only’ 15 million ‘new people’ would be enrolled in Medicaid, how states even afford an additional 15 million new recipients is not addressed. The House version requires states provide Medicaid up to 150% of the poverty level and our state’s caseloads will more than double overnight from about 500 million today, to well over 1 billion if ‘reform’ is passed in its current form.
Sen Harry Reid won Nevada a reprieve delay to the start of Nevadans paying hundreds of millions more for Medicaid here—and nowhere does it tell us where Nevada will get these hundreds of millions necessary when the delayed start begins here, dumping this right in the laps of future Nevada legislators.
Assemblywoman Shelia Leslie, you’re a strong advocate of healthcare ‘reform’ in Nevada, would you care to inform us where we’ll be getting the revenue to pay for expanded Medicaid in Nevada?
How does Senator Harry Reid, going into a re-election bid in 2010, explain to voters the unfunded mandate that saddles Nevada taxpayers with hundreds of millions of dollars in new Medicaid mandates?
They haven’t addressed that this is the largest unfunded federal mandate to the 50 states in American history.
That’s not ‘reform’ folks; it’s a shifting of burdens to the states, posing as ‘reform’.
This is how you know both parties are lying to us: You’ve all asked some really good questions and I’m writing this the best way I know how, so you can all understand what they’re doing and why they’re doing it.
The GOP wants insurers to be able to compete in all 50 states, a no-brainer that the Dems firmly reject—but that the GOP doesn’t really want either. They’re bluffing and the Dems aren’t calling their bluff. They could do this with a stand alone bill opening the 50 states, but they won’t because they know the GOP knows what they’re up to.
The Dems want a ‘public option’ regardless, they don’t care about real ‘reform’.
The Dems know if they were to legislate full insurer competition across state lines, that the need for the ‘public option’ would drop substantially as costs would drop by about 20% right out of the gate, just like other insurance vehicles (car, home, life…) that you can buy across state lines today.
But, here’s the kicker: Open markets would also drop reimbursement rates to doctors and hospitals as consumers choose the best options for them, so neither will ever really fully support competition across state lines because it would sock them in the pocket, though that would be real reform that would drive down costs. It would also drive down wages and the unions won’t hear of that. The ‘public option’ ensures union pay rates that have nothing to do with labor pool supply and demand realities.
I hope this is helping you all see that the current effort is nothing more than a protection racket and not real reform at all. Real ‘reform’ would address the ‘public option’ after assessing what the private market was able to do, and not do, on their own when forced to compete against each other for insurance consumers.
With all 50 states opened to open-markets, the uninsured pool drops too, and those unable to afford can be more easily be subsidized by taxpayers, or incentivized to the insurers to steer them into the private market.
The ‘public option’ and reform are not one in the same thing; in the current effort they are mutually exclusive, though they’re being peddled as overall ‘reform’. Yes, a ‘public option’ would/could be a part of reform efforts, but that would come at the last of three stages after reforming insurance and the healthcare providers, first.
The Dems only want a public option and don’t care how they get there. The GOP wants millions of new customers for their corporate owners to insure under federal mandate, but they don’t want a public option.
Neither side has discussed inflation rate cost caps and that too indicates they are protecting respective special interests and not addressing ‘why’ healthcare costs rise at 2-3 times the rate of inflation. They rise so much because all involved operate under the assumption that someone else is paying the bills, so there are no market-oriented pressures to contain costs.
So that’s it. The Dems are fixated on the ‘public option’ and are willing to flush real reform to get it. The GOP knows this and can make self-righteous pronouncements from the sidelines because the Dems will kill off all of their proposals.
We’ve yet to see a GOP stand alone version to compare.
We’re all being played and lied to by everybody.
The insurers don’t know what open-markets are or how to navigate them. It will take enormous effort to get an insurance industry equilibrium that will deliver to us the dozens of TV ads we see each day trying to sell us auto insurance, for example. On the one hand, they really do want 49 million new customers, on the other, they know their profits will take a hit when forced to actually compete with each other.
The states would love to end Medicaid, but none want to give up their control over the perqs in their programs and demands on insurers, and none will be willing to flush the McCarran-Ferguson Act that gives them control over their insurers.
If the bill fails, and the McCarran/Ferguson overturn fails, it may be the 50 governors that killed them off.
Medicaid costs to the states are the next big battle; when 50 state capitals start doing the math from the final bill, their reactions will be deafening.
Medicaid is not sustainable. Real reform would have provided options to get people off of Medicaid and into private insurance or into Medicare because it is far more cost effective in the long run to subsidize that, than continuing Medicaid.
Without reforming Medicaid and getting those people into private plans or Medicare, no healthcare ‘reform’ is possible! It is the Achilles Heel of this whole misguided effort to date; how can this possibly be ‘reform’ by expanding Medicaid and dumping its burdens onto the states?
The young people: The young people President Obama brought to the polls in 2008 and who made up a large portion of the 5 million new voters he attracted, are in for some really big sticker shock. Their meager earnings are not exempted in any proposal. No plan can work without young, healthy people who don’t use healthcare, supporting the all the others. No one is pointing this out given how dangerous doing so would be to a currently strong pro-Obama constituency.
In the new $10 an hour Bill Clinton-created US economy; those premiums will be politically lethal at some point.
Look at how much people grumble about the Medicare portion of their weekly payroll taxes today.
Under the current proposals, the less you earn, the more you’ll hurt at paycheck time though the House has now kicked the starting age to 27, but that adds tens of billions of depleted revenue streams with nothing to replace them.
A potential $750 fine is laughable, and that too has been graduated with no replacement for that lost revenue. Will there be IRS penalties? Interest accruing? Traditional dings on your credit ratings for federal liens? How are they going to pay off student loans and afford health insurance, much less buy a home or start a family?
They’re not, taxpayers will be carrying them, likely under Medicaid with those burdens shifted to the states.
Does healthcare reform wed you to the IRS for the rest of your lives? Well, yes, in its current form it does just that to those on the lower rungs of the economic ladder.
The current versions of healthcare ‘reform” are also the greatest expansion of the US Treasury Department’s IRS Division in American history; many more new federal employees will be needed, many more contracts to manage their collections efforts to be let.
There will also be about 25+ million in the general population who will never buy insurance regardless of what we do and will just take the eventual $750 hit. How is that addressed?
In ‘opt-out’ states, is there anything to prevent establishing residency in ‘opt-in’ states under portability that was supposed to be key to ‘reform’? How is that paid for? There will always be about 15-20 million who will game the system too, how is that addressed?
Medicare Advantage and Prescription Drug benefits: Two ghastly expensive programs where neither are means tested, and won’t ever be, are deal breakers too. That both were GOP born ideas that are corporate welfare giveaways give the GOP no room for outrage over anything happening today. But any talk of trying to cut either, gives them an issue Dems freely allowed for by supporting both programs too!
500 billion in Medicare cuts and 180 billion in Medicare Advantage cuts shoots directly at the most important constituency to both parties: Seniors. Those people vote and won’t tolerate any cuts.
No real ‘reform’ is possible without cutting Medicare, and no politician in either party will touch this third-rail.
All by themselves, Seniors as a group, have the ability to kill the bill.
Fee-for-service and for-profit providers: That we ever allowed for for-profit hospital and medical corporations was unconscionable. Their power is enormous and no doctors or hospital corporation will give an inch…or even allow for a grandfathering of them, and a future barring of others.
Doctors will not relinquish fee-for service, and want taxpayers to subsidize their being able to charge whatever they please when an open market system would drive their fees and reimbursements down, not up, with true competition, and force them to be market-oriented, not the taxpayers subsidized dependencies they are today.
Exemptions for Cadillac Plans: The unions are sure to ensure they’re exempt from the tax on Cadillac health plans, and the private sector following the old, failed ‘yacht tax’, will just stop offering them. Who doesn’t see this happening? This is another false revenue stream that simply is not going to happen.
Abortion and Illegal Immigrants: 40 Dem House members are threatening revolt without much stricter abortion language and immigrants have to be revisited with far more defined language and sanctions for the bill to ever survive in the US Senate.
Ending McCarran-Ferguson’s repercussions: Although most insurers would love to have one uniform, very basic, bare-bones standard insurance platform to work with for all 50 states, that isn’t going to happen, because Democrats don’t want real ‘reform’, they want only the ‘public option’ at all cost, and therein lies a very real possibility that insurance companies will just simply opt out of providing healthcare coverage altogether, and take their investor money to other lucrative insurance vehicles if they lose their Sherman Anti-Trust exemption.
Many believe this is the real unstated goal of Dem ‘reformers’—to create a new giant bureaucracy of only federal health insurance by squeezing the private sector completely out of the competition pool.
Plus, the CBO piped in and said ending McCarran-Ferguson will have little impact:
Nothing in the law prohibits current insurers from doing this and Congress can’t compel the private sector to participate in businesses that are adverse to their stockholders’ interests.
This is another issue that no one is addressing and hoping no one notices.
The companion to this is those employers who are still providing insurance coverage to their employees. There is nothing that Congress can do to compel private employers to continue private coverage and a great exodus out of private coverage and willingness to pay fines instead, will be what their financial people tell them to do.
Private employer fines do not make a dependable revenue stream and will be an imperceptible fraction of the actual costs.
The House bill itself is almost 2000 pages, and the Senate version is over 1500. If banks are ‘too big to fail’, they should be broken up into smaller entities; the same logic applies to bills that are too big to actually read if they take weeks to read from page-to-page.
The House version weights 19 pounds and is about 400,000 words! We’ve long told you that any bill that is more than about 100 pages is nothing more than special interest protections and exemptions within the remaining pages; that’s about 1800 pages of no ‘reform’ at all in this case.
It’s a nifty way to steamroll something through absent the sober analysis that is necessary to something so large a part of the US economy.
If it’s too big to read, it’s also too big too pass.
These are just some of the big ticket items; there’s an abundance of other issues with the potential to devastate the budget, the economy, and bring down the final draft bill.
That’s how bad what’s on the table today is; it’s an atrocious bill that doesn’t ‘reform’ a damn thing!
I want reform as much as the next guy but folks, this isn’t reform at all!
(Mike Zahara is a Democrat blogger at www.WatchdogWag.com)