Fix Health Care Policy

Medicare Cuts vs. Medicare Reform

As the discussions over the fiscal cliff continue, the debate over entitlement reform is getting confused. The issue is not only how much savings constitutes reform, but also the underlying policies that get you there. Thus far in the fiscal cliff negotiations, Republicans have pushed for greater spending cuts, namely in Medicare.

To that point, a National Journal article commented, “In just a few short weeks, the dominant Republican line on Medicare has shifted from attacking the Democrats for making cuts to the program to demanding a new round of cuts to reduce the federal deficit.”

But this claim cannot be taken at face value, as all spending reductions are not created equal.

There are major distinctions between Obamacare’s Medicare cuts and Medicare reforms that would reduce spending and extend the life of the program.

Read the rest on The Foundry…

Tags: fiscal cliff, market competition, Medicare, ObamaCare, premium support, price controls, unsustainable

Obamacare: The Price Controls Begin

The Department of Health and Human Services announced Tuesday that, starting next year, health insurance companies must receive permission from the Obama administration before they can raise rates higher than 10%. As we warned before Obamacare even became law, this is a form of price control, a government intervention that has a long and well established history of failure.

Way back in 1993, Heritage Foundation scholar Heritage’s Ed Haislmaier was detailing the shortcomings of price controls in health care:

“Price controls would not work in health care because they attack the symptoms of runaway costs, not the cause. Medical costs today are soaring because consumers are largely insulated from them…and because the tax system discourages consumers from seeking good value for money in health care.” (Read more at The Foundry…)

Tags: health insurance, medical costs, ObamaCare, price controls, tax treatment

Morning Bell: “The American Public Is Not Behind This Bill”

After more than a year of $862 billion deficit stimulus bills, national-debt-doubling federal budgets, and government takeovers of the auto industry, it is difficult to remember that President Barack Obama actually ran as a moderate in many ways. On his way to a 53% – 46% win over Sen. John McCain (R-AZ), then-Sen. Obama promised to “cut taxes for 95% of workers and their families,” expand the Army by 65,000 and the Marines by 27,000, and enact “a net spending cut” for the federal government. Obama promised lower taxes, a strong defense and shrinking the size of government. No wonder independents in nine states that went for President George Bush in 2000 and 2004 switched their vote to Obama in 2008 (CO, FL, IN, IA, NV, NM, NC, OH and VA). But now those independents are beginning to reassess. Public Policy Polling (a liberal polling firm) notes that Obama now has a negative approval rating in every state that he flipped from the Bush column to his in 2008.

And now President Obama has lost one of his biggest and earliest supporters on his signature issue: health care. Yesterday, when pressed on CNBC if he would be in favor of scrapping the Senate health care bill, Warren Buffett responded: “I would be.” Specifically, Buffett believes that the Senate bill will not contain health care costs: “We have a health system that, in terms of cost, is really out of control, and if you take this line and you project what has been happening into the future, we will get less and less competitive. So, we need something else. Unfortunately, we came up with a bill that really doesn’t attack the cost situation that much and we have to have a fundamental change.” Buffett is correct on both fronts: 1) the President’s own Centers for Medicare and Medicaid Services (CMS) has reported that the Senate health care bill would raise national health expenditures $234 billion by 2019; and 2) our current system is completely unable to control exploding health care costs. (more…)

Tags: deficit, Medicaid Expansion, national debt, ObamaCare, price controls, Public Opinion, Senate Health Bill, start over, Warren Buffett

The President’s Health Proposal: Bringing Back Price Controls

In preparation for the Health Care Summit, President Obama unveiled his first official health care proposal. It is intended to reconcile the differences between the highly unpopular House and Senate bills. Curiously, President Obama’s latest iteration of the liberal health policy agenda includes more federal power: the power to control “private” health plan premiums.

Price Controls. According to the President’s proposal, a new “Health Insurance Rate Authority” would oversee rate review for private insurers, so that “if a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates, or take other actions to make premiums affordable.” On the face of it, this means price controls on health insurance.

The President knows the unhappy history of price controls, and the genuine misery- shortages, mainly- that such a policy guarantees. Think of the long, hot gasoline lines of the 1970s, courtesy of the Carter Administration. (more…)

Tags: health care spending, Health Care Summit, health premiums, President's proposal, price controls

Morning Bell: Can They Make Obamacare Worse? Yes They Can!

Flacking for President Barack Obama’s “new” health care plan, White House Press Secretary Robert Gibbs told reporters assembled for yesterday’s press briefing: “The president posted ideas of his on the White House website today. We hope Republicans will post their ideas either on their website, or we’d be happy to post them on ours, so that the American people could come to one location and find out the parameters of what will largely be discussed on Thursday.” And this might have been a small bit of successful Obama administration gamesmanship on health care and transparency in government except for one small problem: reality. Not only do House Republicans already have their own health care plan, not only is it already available online, but the White House’s own website already links to it!

And speaking of the President’s behind-closed-doors plan, don’t believe any of those headlines showing a $950 billion price tag. That is an Obama administration-created number that should not be afforded any more credibility than Gibbs’ grasp of the contents of his own website. In fact, the independent Congressional Budget Office (CBO) published this about the President’s new plan yesterday:

“Preparing a cost estimate requires very detailed specifications of numerous provisions, and the materials that were released this morning do not provide sufficient detail on all of the provisions. Therefore, CBO cannot provide a cost estimate for the proposal without additional detail, and, even if such detail were provided, analyzing the proposal would be a time-consuming process that could not be completed this week.”

In other words, even with over a year to prepare for the moment they would finally release their own plan, the White House could only manage to obtain an “incomplete” grade from the official budget scorekeeper in Washington. So every time you hear the President say “my plan is paid for” or “my plan reduces the deficit,” just remember you are going to have to take his word for it.

And where the President’s plan is more firm than fuzzy, it only makes the scheme worse: (more…)

Tags: CBO, Cornhusker Kickback, Medicaid, Medicare, ObamaCare, President's proposal, price controls

President’s Proposal Introduces “AIG Risk” in Federal Insurance Rate Regulation

The White House has just issued an 11 page concept paper (PDF) for yet another health care bill that, among other items, includes a proposed new Federal “Health Insurance Rate Authority.” The Administration has yet to provide any legislative language on how this new Federal regulatory regime would operate, but based on statements by the President and other officials, as well as similar provisions included in the bills already passed by the House and Senate, there is good reason for concern as to whether the President and Congress really know what they are doing in this regard.

The President and the Congressional leadership assert that health insurer rate increases are unjustified and point to some cases of recent double-digit increases announced by certain insurers. But so far they have offered no explanation of what portion of those increases they think are unjustified or their reasons for taking such a position. (more…)

Tags: federal regulatory powers, health insurance premiums, policyholders, President's proposal, price controls