Reality Begins Bursting Healthcare Hype
The Heritage Foundation
Yesterday the non-partisan Congressional Budget Office (CBO) released a preliminary analysis of the Kennedy-Dodd health care plan, and the results were truly frightening. Assessing just Title I of the draft legislation, CBO estimated the plan would add $1 trillion to the federal deficit while only extending health insurance to a net 16 million more Americans.
As scary as that is, what is even more disturbing is what costs the CBO did not estimate: “The proposal does not include a ‘public plan’ that would be offered in the exchanges, nor does it contain provisions that would require employers to offer health insurance benefits or impose a fee or tax on them if they did not offer insurance coverage to their workers.”
Even without the public plan, the CBO analysis undercuts one of the fundamental promises President Barack Obama has repeatedly made about health care reform. Speaking to the American Medical Association yesterday, President Obama promised: “If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.”
The CBO disagrees. According to their analysis, while the Kennedy-Dodd bill would enable 39 million Americans to obtain health insurance, the plan would kick about 15 million people out of the system because their employers would no longer offer insurance, and coverage from other sources would decline by 8 million.
These numbers will only look worse once a public plan is factored in. And the public plan is just one of the biggest problems in the Kennedy-Dodd bill: A Public Plan Will Deprive Millions of Americans of Their Current Health Care - An independent analysis by the Lewin Group, for example, shows that a public plan depending on eligibility and payments rates could result in up to 119.1 million Americans being switched by their employers from their existing coverage or transferred to government-sponsored coverage so that employers can reduce benefit costs.
Thus a public plan, especially combined with a mandate on employers to offer government-specified coverage or pay a tax, would mean that millions of Americans would be pushed out of the private coverage they have today.
Mandates on Businesses and Individuals Act as Costly New Tax - The committee bill would impose “a shared responsibility” on both individuals and employers to pay for health coverage. These requirements amount to mandates, though the penalties are not spelled out.
An employer mandate would be a regressive tax on business that would be directly shifted to employees in the form of reduced future wages or job losses. It would also spur many employers to drop private coverage, paying the tax rather than having to buy government-specified insurance. An individual mandate would force Americans to buy a set of health benefits designed by the government or suffer some penalty.
Federal Regulation of Health Insurance Undermine State Flexibility - Under the committee bill, Congress and federal officials would exert a high degree of control over health insurance, including underwriting and rating rules, and would prescriptively organize the market for competing health plans. That would limit the ability of states to design rules and market rules that fit local conditions.
As more details are added to the Kennedy-Dodd plan, its trillion-dollar price tag will only go up. And there is still nothing in the bill about how to pay for all the new spending. That means trillions more debt for our children.
There is an alternative. A patient centered alternative that keeps health care decisions between doctors and patients instead of centralizing power in Washington. Rep. Paul Ryan’s (R-WI) bill, the Patient’s Choice Act, is just one example of what that approach could look like. Listen to Ryan explain his proposal, here.