American Elephants

The closed-door, backroom effort to pass a health care bill — by any means necessary — continues.  Democrats have gone through all kinds of gyrations to make the health care bill cost less than it actually does.  Taxes and fees go up immediately, but benefits don’t begin until 2014.  Since the cost-effectiveness is measured over a decade, collecting income  for 4 years before they have to start spending money,  makes the decade look better.

Another way they can raise taxes, they decided, is to tax “Cadillac” plans — that is the highest priced, most elaborate plans.  [Can't have anyone having a much better plan] But that’s just what unions have — Cadillac plans.  Obama owes an enormous debt to the unions who financed his campaign. So the unions won’t get taxed on  their plans. In other words “collectively-bargained plans” won’t be affected.  So two Americans who are receiving the same benefits could be taxed differently if one of them was a member of a union and the other was not.

Richard Foster, the chief actuary for the Centers for Medicare and Medicaid Services, reports that under his analysis national health spending will rise under the Senate or House Bills by $222 billion over the next ten years.  ObamaCare “bends the cost curve” up — not down.  ObamaCare is “paid for” only in the sense that Medicare payments to doctors are assumed in the bill to be cut by 20% this spring, and even deeper after that.

Many providers will stop accepting Medicare and Medicaid patients.  Medicaid patients already have trouble finding doctors who will treat them, and it is beginning to be more difficult for Medicare patients.  Providers cannot run their practices at a loss.

The Medicare Drug Benefit is the only entitlement program that has come in under estimates. Seniors choose from among a variety of plans as to deductible, co-pays and so on.  Generics cost significantly less than brand-name drugs, and the out-of-pocket costs are less.

When costs reach $2,830, there is a coverage gap.  When the patient has spent $4,550 ($1720 more out-of-pocket) then catastrophic coverage begins with only a small co-pay.  Trying to avoid the “coverage gap” has been an incentive for seniors to use generic drugs if they are satisfactory, and to keep costs down.  If seniors need help, Extra Help is available.  And seniors have responded to the incentive.  So of course, the Democrats intend to eliminate the coverage gap.

There are two possibilities here: either Democrats want seniors to be fully dependent on government for their ability to live, or Democrats just don’t understand incentives and saving money.  Or perhaps both?

There is a new entitlement program for long-term care, which is only included because it will start collecting premiums five years before it starts paying benefits. Mr. Foster estimates the program will be bankrupt by 2025.

I keep remembering the certainty that the Massachusetts health care plan was going to be the model plan for the rest of the country.  It’s been in business for 3 years, and Massachusetts health care costs are the highest in the country, it is close to going bankrupt, all sorts of doctors have departed the state for greener pastures. Essentially, it’s a flop.

A new USA Today/Gallup poll (Jan 8-10) shows that just 37 percent of those surveyed approve of the president’s job on health-care policy while 56 percent disapprove.  A new Quinnipiac poll on Obama’s first year in office shows only 35 percent of those surveyed approve of the president’s handling of health-care in his first year, while 58 percent  disapprove.

Democrats in Congress have to decide what is more important.  Leaving future generations of Americans a legacy that is even remotely fiscally sound, or giving President Obama  an “achievement” to talk about during his State of the Union speech.