The Congress has looked at taxing about everyone and everything to pay for half the cost of a health care bill.
They’ve considered sugary soft drinks, beer, “millionaires,” and “gold plated” health benefits to name a few. Every time they come up with one it gets shot down by the interests it would offend.First, as I have asked on this blog before, why do we need to use at least $500 billion in new taxes to pay for half the cost of a health care entitlement expansion bill? We will spend somewhere between $35 trillion and $40 trillion on health care in this country over the next ten years. Many experts contend there is as much as 30% waste in what we spend.Advocates of a health care bill say we need it to reduce the cost of health care in this country that will otherwise bankrupt us if we don’t fix it.
With as much as $10 trillion to $12 trillion in waste, and cost containment as the stated goal, why do we need to raise people’s taxes $500 billion to pay for an expansion of coverage?But since it is clear that the Congress and the White House have all but given up on real health care reform that would really “bend the curve” they are adamant they are going to raise taxes to pay for at least half the cost.
Bob Laszewski’s Health Care Affordability Model has the same connection to the reality of the current battle over health care reform as a Fantasy Baseball League does to the actual outcome of a major league baseball game; i.e., none.
Actually, while those who play Fantasy Baseball – might we call them “baseball wonks”? – are affected by what happens in the real world to the players they have selected, they have no illusions of reciprocity. Laszewski is a brilliant analyst whose examination of the various political proposals for health-care reform have become a “must-read.” But in making his own proposal, Laszewski, a strategy consultant based in Washington, has managed to completely ignore the fact that reform is an intensely political process.
“The Health Care Affordability Model…could be attached to virtually any health care reform plan now on the table,” he writes.
No, it couldn’t. Just like managing a Fantasy Baseball team has no connection to managing real major league players. Given Laszewski’s timing, his proposal is somewhere between almost irrelevant and completely so. Which is not to say his ideas are wrong.
Over the last few months, I have become increasingly disheartened over the prospects for meaningful health care reform.
First, the process is terribly conflicted, and it shows. In the first quarter of 2009, the Center for Responsive Politics reported that the health care industry contributed $128 million to Congress. Now that the tide has turned, this has gone mostly to Democrats who, as it turns out, are just as receptive as their Republican predecessors.
Most health care experts agree the reason our system is so
unaffordable is because of all of the waste and unnecessary care—up to
30% of what we spend.I will suggest that it will take the
genius of individual creativity to separate the 70% of this health care
system that is the best in the world from the 30% that is waste.So
far, the Congress has focused more on entitlement expansion then
fundamentally reforming the system and tackling the real
problem—getting all the excess costs out. The result so far is
expensive health care proposals and no real reform.How can we actually make the health care system affordable as we expand coverage? I will suggest a three-pronged attack:
There is a major bipartisan effort going on in the Senate Finance Committee to reform the health care system.Reportedly, one of the elements of that effort may be a tax on "gold plated" health insurance benefits
above a certain threshold–$17,000 for family coverage is one option
being discussed. The new tax could raise close to $300 billion over ten
years to help pay for a health care bill.
And, I’ve been in the business for 37 years.First, let me
stipulate we really need a system of universal care where everyone gets
to have insurance. But we don’t yet so certain rules are unavoidable
until we do.
Since when was a two-tiered health insurance system a Democratic policy goal?
Among Democrats in the Congress and at the White House there is a great deal of interest in creating a government-run health plan in the under-age-65 market. Such a plan would compete with the existing private health insurance market in a head-to-head showdown between private and public health insurance.
Such a plan was part of the President Obama's campaign health proposal—albeit limited to the small employer and individual market. We are told the President’s greatest interest here is in “keeping the private health insurance market honest.” That is, creating competition in order that private insurers do a better job of controlling costs.
most observers assume that this would mean paying providers at
Medicare—or even Medicaid—rates the administration says not necessarily.
Last week Senate Majority Leader Harry Reid was quoted as raising the possibility
we could take the $600 billion in new revenue projected from a
"cap-and-trade" plan to cut green house-gas emissions and use some or
all of it to help pay the estimated $1.5 trillion cost for
comprehensive health care reform.
Energy and climate change issues aside that would be a bad idea–a really bad idea.
The biggest health care challenge we face in America is the cost of health care. To really reform the system we have to bring its costs under control. The only way we can achieve sustainable health care reform
is to pay for most of the cost of any reform plan out of the savings we
achieve fixing the system and its perverse incentives to spend more
without regard to what we receive.
The first was a recent and the second headline comes from the Washington Post. Both refer to what were supposed to be two already agreed on health
care reform ideas–comparative research about which treatments work
best and the creation of a nationwide system of medical records.
The lesson here is that in health care nothing is easy, simple, or widely agreed to.