The “Doc Fix” Is Not In

(Grace-Marie Turner) – Cost matters: The cost of health care remains the central issue in the health reform debate, and that’s why the news this week was so bad for leaders on both sides of Capitol Hill.

First, the Senate. Wednesday’s vote on the “Doc Fix” stunned everyone, even, apparently, Senate Majority Leader Harry Reid. His plan was to shove $247 billion under the carpet and pretend that a permanent increase in Medicare’s payment rates to doctors shouldn’t count as part of overall health reform. But he ran into a firestorm of opposition, with 12 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 and would have added to the deficit. No one wants to see doctor payments cut by 21%, as they will be without congressional action, but the Reid plan would have added to the deficit — not “one dime,” but 247 billion “dollars.” Fiscally responsible Democrats and Republicans joined forces to just say no.

This means it is going to be much more difficult to stuff the whole reform package into the $900 billion bag the president has given them.

Reporter Chris Frates of Politico wrote after the vote: “The fact that Democrats, who hold a 60-vote majority, could not muster even 51 votes for the bill is a sign of rocky sledding ahead for health care reform.”

I still think that the price tag is the biggest problem Sen. Reid faces. The $400 billion in Medicare and Medicaid “savings” are an illusion, and he and other leaders are still scrambling to find a mix of $500 billion in new taxes that can win enough votes to pass a bill. No one has put together that magic formula yet.

In the House, an analysis of the main health reform bill gave members heartburn because it said that their plan would bend the cost curve alright, but in the wrong direction.

Ways and Means Committee Republican Leader Dave Camp 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 health expenditures would be 2.1% higher in a decade than if the bill didn’t pass. Further, just 93% 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 Pelosi discounted the findings, saying that she has moved past the House Ways and Means bill and that meant 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 out 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 most 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?

Good grief! Can they possibly get this done?

(Ms. Turner is head of the Galen Institute)