A Real Killer

President Obama and his fellow Democrats are hell bent on ramming through a health care reform act that doesn't actually reform health care and will end up increasing the costs for health care, will kill job creation in small businesses, put a damper on the economy, and may end up killing patients in need of care. Moreover, one of the plans actually outlaws private health care providers, making the government solely responsible for health care insurance in the nation.

For starters, how exactly can a byzantine health care delivery system such as the one proposed result in lower costs?


Organizational Chart of House Democrats Health Plan -

That's just the tip of the iceberg.

The House plan basically phases out private health care altogether:

It turns out we were right: The provision would indeed outlaw individual private coverage. Under the Orwellian header of "Protecting The Choice To Keep Current Coverage," the "Limitation On New Enrollment" section of the bill clearly states:

"Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day" of the year the legislation becomes law.

So we can all keep our coverage, just as promised — with, of course, exceptions: Those who currently have private individual coverage won't be able to change it. Nor will those who leave a company to work for themselves be free to buy individual plans from private carriers.

From the beginning, opponents of the public option plan have warned that if the government gets into the business of offering subsidized health insurance coverage, the private insurance market will wither. Drawn by a public option that will be 30% to 40% cheaper than their current premiums because taxpayers will be funding it, employers will gladly scrap their private plans and go with Washington's coverage.

People will initially be able to keep their private carriers, but they wont be able to switch. Doing so puts them in the pool of people who can only choose the government plans. The government plans, which will rely on massive taxation, will undercut the private plans since they aren't subsidized by the government, and businesses will drop their private coverage in favor of the government plan, which we're all paying for in any event. They reduce choice, plain and simple, and if you don't like it and want to opt out of paying for insurance, you'll be taxed for that privilege.

The health care proposals are sweeping in their tax and grab breath. In New York, the plans would be a disaster. It would put the marginal tax rates imposed on wage earners making as little as $80,000 at well above 50%, when factoring in state and local taxes.

The $544 billion tax hike would violate one of President Obama's ironclad campaign promises: No family will pay higher tax rates than they would have paid in the 1990s.

Under the bill, three new tax brackets would be created for high earners, with a top rate of 45 percent for families making more than $1 million. That would be the highest income-tax rate since 1986, when the top rate was 50 percent.

The legislation is especially onerous for business owners, in part because it penalizes employers with a payroll bigger than $400,000 some 8 percent of wages if they don't offer health care.

But the cost of the buy-in to the program may be so prohibitive that it will dissuade owners from growing their businesses -- a scary prospect in the midst of a recession.

Obama took to the airwaves yesterday with ads and TV interviews promoting the need to reform health care.

As a Senate health committee passed a different version of a health-care reform bill - a milestone for the issue - Obama said on NBC, "The American people have to realize that there's no such thing as a free lunch."

And in a Rose Garden speech, he said the "status quo" on health care is "threatening the financial stability of families, of businesses, and of government. It's unsustainable, and it has to change."

Asked if Obama supports the surtax on wealthiest Americans even though it would break a campaign pledge, White House spokesman Robert Gibbs said only, "It's a process that we're watching."

Republicans in Washington and small-business defenders in New York said the House legislation would effectively place a stranglehold on businesses while running off top earners.

Not only do these plans violate Obama's no tax hikes pledge on 95% of Americans, but he does so with massive tax hikes to boot. Throw in the fact that he's intent on imposing surtaxes on the very groups of people who are most likely to create jobs, and you have a significant brake on the economic recovery that he's hoping will improve Democrat chances in 2010 and beyond.

As Hot Air points out, the Bureau of Labor Statistics notes that many of the top wage earners in the nation are the very people who provide health care in the first place. If the tax burden increases on them the more work they do, why will they strive to see more patients? They will do just enough to maintain their current income levels, will engage in tax avoidance strategies, and the number of health care professionals will decrease, leaving fewer doctors to provide care to more people. That, on its face, is a serious reduction in the quality of care.

In other words, these plans are stunning in their economic destructiveness.

Now, as for what they will actually do to the delivery of health care? It's not much better. In fact, as reported by the AP and other outlets, the US already provides government health care to several groups of people. The Indian Health Service is supposed to provide quality health care to Native Americans across the nation. It has an abysmal record, and the quality of care is such that you don't want to get sick or injured on nights or weekends or pretty much any other time since the care is so shoddy.

The IHS has failed in its mandate to provide quality free health care as required by federal law and treaties with the Native American tribes. The care is free, but it isn't quality. In fact, it can be a real killer.

Then, there's the Veterans Administration, which is supposed to care for members of the US Armed Services; the very people sworn to defend the nation. We owe it to our Armed Forces to provide quality care, and yet we have repeatedly seen shoddy care, coverups, and inadequate resources devoted to quality care.

That inadequate care goes back decades and while the quality of care has improved to some degree, it still falls far short of the quality of care found outside the VA system.

Both systems service a population that is several magnitudes smaller than that of the entire US health care delivery system. Yet seeing how the government can't provide quality health care in either of those instances, why should anyone believe that the government will do better with the health care delivery of hundreds of millions of Americans?

UPDATE:
The Congressional Budget Office has thrown cold water on the Congressional health care bills, noting that it will not bring down costs of health care.

Under questioning from Chairman Kent Conrad , D-N.D., Elmendorf told the Senate Budget Committee that the congressional proposals released so far do not meet that second test.

“In the legislation that has been reported, we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount and, on the contrary, the legislation significantly expands the federal responsibility for health care costs,” he said.

Elmendorf was not addressing the narrow question of whether the Democrats’ legislation would be budget-neutral over 10 years. Congressional Democrats and the White House have promised to offset the cost of health care legislation over that period.

But budget analysts and some members fear the legislation will not slow the growth of health care spending enough to prevent it from overwhelming the federal budget after that 10-year window.

Also, to remain budget neutral, massive taxation is required. The Democrats aren't even attempting to overhaul the health care delivery system without imposing massive taxation on already overburdened taxpayers, and this testimony reinforces that fact. Indeed, the costs will only rise as those imposed taxes don't meet revenue projections, requiring still more tax hikes or reduced services to compensate.

UPDATE:
Sen. Max Baucus (D-MT) says that he's close to getting bipartisan support on the health care makeover.

Senate Finance Committee Chairman Max Baucus(D-Mont.) said Thursday that he hopes to have a bipartisan deal on a health care reform bill by the end of the day.

He made the remarks after huddling for about two hours with five Finance Committee members most closely involved in the negotiations. It was the first time Baucus acknowledged a time frame for reaching an agreement.

“We are meeting very aggressively today,” Baucus said of the bipartisan group, which plans to meet again at 1:30 p.m. “We will keep meeting all day long. I hope we can reach some kind of agreement by the end of the day, but having said that, it depends on what kind it is.”

Asked again by reporters if he expected a deal Thursday, Baucus reverted back to his standard line that the group “will be ready when we’re ready.”

Baucus said the task of filling a $320 billion hole in the bill has been challenging since the Democratic leadership and President Barack Obama asked Baucus last week to take the idea of taxing health benefits off the table.

It's called taxes without calling it such. It will be playing fast and loose with the definitions and tax treatment of income and health care expenses, but the reality is that it will be new and additional taxes imposed to fund this mess.

More to the point, Baucus has no choice but admit that the bill as presented to him was not revenue neutral as written, which is a sign of bad things to come.