Health care horror

Democrats create health care horror - Detroit News
Robert Goldberg

The Senate health reform debate is well under way. Democrats have promised that this bill and its companion measure in the House will accomplish three major things: Extend health coverage to the uninsured; provide those who already have insurance with better health care choice; and cut health costs.

In truth, both bills fail on all these counts.

First, both bills would also burden middle-class Americans with billions of dollars in taxes and fees. The taxes and fees kick in next year. The health care coverage doesn't start until six years from now.

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Under the Senate version, individuals who fail to purchase health insurance would have to pony up $750 annually starting in 2016. The House bill would peg that new tax directly to one's annual salary -- charging those who fail to purchase insurance 2.5 percent of their modified adjusted gross income.

Both bills also feature a hefty hidden tax. Because they bar insurers from denying coverage for pre-existing conditions and require that everyone be charged similar premiums, the bills would send the price of insurance ever higher, especially for young people. It's estimated that these moves would end up increasing the cost of private health insurance by 300 percent for each individual or $100 billion over the next 10 years. Congress may not believe those price increases are taxes, but they'll have the exact same impact on the average family's bottom line.

Next, nearly 13 million seniors will be cut from Medicare Advantage, the most popular part of that program. At the same time, the fees doctors and other providers get paid under Medicare will be cut and many new technologies that extend the life of seniors will not be covered.

Then, the same group that came up with the "evidence" that led to the "just say no to mammogram" recommendation for women younger than 50 will churn out a laundry list of what medical tests, services and technologies should be covered and what care should not. That will be called quality by a Quality Commission or Quality Choices Commissioner. Your health plans will pay for what this group decides upon. And that is what is known as "choice" under healthcare reform.

Third, according to the chief actuary for Medicare and Medicaid, over half of the people getting new insurance -- about 18 million to 21 million -- would be enrolled into an expanded Medicaid program. That will require massive increases in state taxes since it will be state Medicaid programs that will be mandated to cover the cost of people who are barred from any other type of health insurance under either the House or Senate proposal.

Only between 8 million and 10 million people -- about 38 percent -- would get coverage through a new national insurance exchange, helped out by taxpayer subsidies.

When all is said and done, between 23 and 30 million Americans will still go without health insurance in 2019 under either version. Why? People, particularly the young, would rather pay $750 a year and then enroll in a health plan when they find out they are sick -- as they will be allowed and encouraged to under both plans -- rather than invest in and be rewarded for their health.

For this slight reduction in America's uninsured rate, the costs are enormous. The "sticker price" over the next 10 years for both bills is nearly $1 trillion. But neither counts what states have to pick up in Medicaid costs and a lot of line-item projects that add up to about $250 billion. Both presume that compliance with penalties and taxes will immediately hit 100 percent.

Meanwhile, the average cost of health insurance for most Americans will go up, not down. And in exchange for that privilege, they will pay higher taxes, face greater debt and encounter a healthcare system with fewer doctors, longer waiting lines and less innovation. If that's increasing health coverage, widening choice and making health care more affordable, I have a bridge I'd like to sell you.

Robert Goldberg is vice president of the Center for Medicine in the Public Interest.