Weekly Newsletter: June 8, 2009
U-Turns Ahead
This past week saw several reversals of key campaign promises by President Obama as it relates to health reform. Tuesday’s meeting with Senate Democrats resulted in press reports indicating the President would be willing to support some type of tax on health insurance benefits as part of an overall legislative package. While some Members may agree on the need for tax equity in the way individuals purchase their health coverage, Members may also oppose efforts to cap or repeal the current employee health insurance exclusion—a tax increase—in order to expand welfare and entitlement spending as part of health reform.
Wednesday saw the public release of a letter in which the President stated his support for “shared responsibility”—meaning a tax on individuals who do not purchase health insurance. However, many Members may agree with candidate Obama—and disagree with President Obama’s new position—who pointed out that in Massachusetts, the one state with an individual mandate, “there are people who are paying fines and still can’t afford [health insurance], so now they’re worse off than they were. They don’t have health insurance and they’re paying a fine.” Members may also agree with recent Obama Administration nominee Sherry Glied, who wrote last year that a mandate “is in many respects analogous to a tax”—and furthermore has the potential to be a “very regressive tax, penalizing uninsured people who genuinely cannot afford to buy coverage.”
Overhanging both reversals lies the signal promise of the Obama campaign:
“I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”
Many Members may view any attempt to tax individuals who do not purchase health insurance—to say nothing of taxing workers’ health insurance in order to expand the welfare state—as a fundamental breach of his promise from last September.
The Big Winners in Health Reform: Federal Bureaucrats
Several developments during the past week provided important clues to the Democrat vision of health reform. First, President Obama’s letter to Senators Baucus and Kennedy signaled support for allowing the Medicare Payment Advisory Commission (MedPAC) to make “recommendations on cost reductions” that would be binding unless overturned by majorities in both houses of Congress. And draft legislation released by the HELP Committee included the establishment of a Medical Advisory Council to determine the minimum benefit package individuals would have to purchase—or otherwise individuals would be subject to a tax to be determined by the Treasury.
Coupled with Finance Committee Chairman Baucus’ earlier suggestion that insurance commissioners be required to give a “seal of approval” to health plans meeting new federal mandates, the proposals collectively amount to a significant shift in control of health care from doctors and patients to federal bureaucrats:
- Under Obama’s proposal, bureaucrats would be empowered to enact further binding savings from Medicare, over and above the more than half a trillion in savings the President has proposed;
- Because the Obama proposal advocates “recommendations on cost reductions” from across the health spectrum, it could quickly turn MedPAC into the type of Federal Health Board—one that could ration health care—proposed by former Senator Tom Daschle;
- Both the Baucus and Kennedy plans would require individuals to purchase “bureaucrat-approved” health insurance—and many Americans’ current health insurance would be insufficient to meet federal bureaucrats’ new diktats;
- The Kennedy draft bill also allows federal bureaucrats to set levels of taxation—by permitting them, without any Congressional intervention, to determine the tax penalties assessed to individuals who do not purchase “bureaucrat-approved” coverage.
A Medicaid Card Does Not Mean Access to Care
A recent survey conducted by consultants at Merritt Hawkins, in addition to quantifying the longer wait times in Massachusetts as a result of that state’s health reform initiative, also examined beneficiary access to physicians within Medicaid. Their survey of more than 1,000 medical offices in 15 major metropolitan areas found that just over half of specialists contacted were accepting Medicaid patients. In seven cities, including Washington, DC, Medicaid acceptance was below 50%; in Dallas, fewer than two in five doctors (38.6%) surveyed participate in the Medicaid program. The study found that “Medicaid is not widely accepted in most markets surveyed, in at least some of the medical specialties review, and, in some cases, all of them.”
The report remains consistent with a government-run Medicaid program where in one state only one in six female beneficiaries over 50 obtains a mammogram. Some Members may agree with the report’s conclusions that “Medicaid does not guarantee access to physicians in many cases” and that “plans to expand Medicaid, or to create other forms of government-supported health care insurance that reimburse physicians below their costs, may not have the effect of increasing access for some patients.” Some Members may view the report as further reason to oppose the establishment of a government-run health plan that could force nearly 120 million individuals from their current coverage—and place them into a system where an insurance card “does not guarantee access.”