DEMOCRATS ASKING FOR DEFEAT

…”This vote transforms the political landscape in a way that we have not seen in our lifetimes and the results will be cataclysmic for the Democratic Party. One hopes that the deals that the various members cut with the leadership to sell their votes included generous retirement packages. They’re going to need them!”

Dick Morris And Eileen McGann

The Battle Is Lost, and the War Has Begun

NRO – Jeffrey H. Anderson

President Obama won a major victory last night in his determined effort to impose his will on the American people. But far from striking a fatal blow to the cause of limited government and fiscal responsibility, Obama has awakened a sleeping giant.

Unlike past threats to the American way of life, this time the threat comes from within. Lincoln warned us that this would be so:

All the armies of Europe, Asia, and Africa . . . , with a Bonaparte for a commander, could not by force take a drink from the Ohio or make a track on the Blue Ridge in a trial of a thousand years.

At what point, then, is the approach of danger to be expected? I answer, If it ever reach us it must spring up amongst us; it cannot come from abroad. If destruction be our lot we must ourselves be its author and finisher. As a nation of freemen we must live through all time, or die by suicide.

In the days and months ahead, certain well-meaning opponents of Obamacare will tell us that we need to make an uneasy peace with the overhaul; that we should work to modify it so as to make it somewhat less egregious; that we should focus on other issues; that we should admit defeat. Don’t be persuaded.

A house built on a poor foundation cannot stand. Obamacare will be built on sand, by unskilled workers, using the wrong design plans. You don’t remodel such a structure. You tear it down and begin anew.

President Obama promised that his plan for “health-care reform” would not cause any individuals or families to lose their health-care plans, would not be paid for by cutting seniors’ Medicare benefits, would not bend the health-care cost curve up (but instead would bend it down), would not raise taxes on anyone making less than $250,000 a year, would not raise Americans’ health-insurance premiums (but instead would lower them), would not put the federal government in control of health care, would not require Americans to buy health insurers’ product under penalty of law, would not cost more than $2 trillion over ten years, would not raise deficits, would not provide taxpayer funding for abortion, would increase competition and choice, would leave what’s good in place while fixing what’s broken, and would be bipartisan. Obamacare fulfills none of these promises…



Ten Facts Every American Should Know About

Democrats’ Final Government Takeover of Health Care

Office of the Republican Leader

NUMBERS TO KNOW:

$569.2 billion in tax increases

$523.5 billion in Medicare cuts

$48 billion more for Medicaid

1. A Job-Killing Government Takeover of Health Care. No amount of changes or legislative tricks can hide the true destructive nature of this bill: $17 billion in new taxes on Americans who do not comply with the individual mandate, $52 billion in new taxes on employers that do not provide health coverage deemed “acceptable” or “affordable” by government bureaucrats, and new taxes on capital gains, dividends and interest that will further stifle economic growth and job creation.

2. New Tax on Capital Formation and Job Creation. The Medicare tax on capital gains, dividends, and other investment income gets bigger, magnifying the destructive power of this new tax. The bill increases the tax from 2.9 percent to 3.8 percent, pushing the top capital gains rate to 23.8 percent and the top rate for dividends to 43.4 percent in conjunction with tax relief expiring at the end of this year. As The Wall Street Journal editorialized this week, this tax will “permanently skew the incentives to work, save and create jobs.”

3. Democrats Continue to Say ‘I Do’ To Marriage Penalty. The bill leaves in place a massive marriage penalty, which will mean higher premiums for those that tie the knot. As highlighted in January by The Wall Street Journal, “the disparity comes about in part because subsidies for purchasing health insurance … are pegged to federal poverty guidelines.” The final bill leaves this unfair penalty on married couples in place.

4. Lower Wages and More Unemployment. The final bill imposes $52 billion in new taxes on employers, including small businesses, that cannot afford to provide health coverage or that don’t offer coverage. The effect of this type of tax, similar to a payroll tax increase, would ultimately fall squarely on workers in the form of lower wages or reduced employment. In fact, the Tax Policy Center concluded that “economists generally believe that the burden of payroll taxes is borne by workers in the form of lower wages, regardless of whether the tax is levied on the employer or the employee.” The tax proposed in this bill will likely have the same effect.

5. Employers Targeted By Even Higher Taxes to Enforce Employer Mandate. The final bill incorporated President Obama’s suggestion to rake in a little more cash to pay for a massive government-takeover of health care by nearly tripling the job-killing mandate tax on employers who do not offer health coverage to $2,000 per employee. Sure enough, the President’s suggestion raises an additional $25 billion on the backs of American employers, according to CBO.

6. Individual Mandate Tax Reduced? No, Not Really. Democrats are highlighting their generosity by lowering the amount of the tax for not complying with the mandate. But just how generous are they? Not very. Democrats propose to reduce the individual mandate tax flat payment amount by a scant 14¢ a day. And, while Democrats “reduce” the individual mandate tax flat payment amount, they actually raise $2 billion more by making other alterations to the individual mandate, according to CBO.

7. The Power to Tax Our Health Care. The Democrats’ final bill doesn’t just tax individuals and employers if they don’t comply with the complex mandates in the bill. The bill sends the IRS out to tax the very products Americans use to maintain and restore their own health. New taxes on medical devices, on prescription drugs, and on health insurance itself are all targets of the bill. And, with $10 billion in new enforcement resources, you can bet the IRS will be taking its full share out of the pockets of every American who uses any of these products or services.

8. Even More Subsidies, Even Greater Threat to the Economy. The bill increases the subsidies provided under the bill from those provided in the Senate bill by $65 billion, a significant and unsustainable increase. In fact, the Associated Press reported a warning from Massachusetts’ state treasurer, who stated that Congress will “threaten to wipe out the American economy within four years” if it adopts a health care overhaul modeled after the Bay State’s.

9. Taxpayer-Funded Abortion Coverage. The final bill does not include the Stupak amendment language that would prohibit federal funds from being used to fund elective abortions. Instead, states are given the option to opt-out of providing insurance coverage of abortions. Still, taxpayers in a state that opts-out would still see their federal tax dollars fund elective abortions in other states. Additionally, each state through the Office of Personnel Management (OPM) can provide access to two multi-state plans, and only one of them will exclude abortions. OPM’s current health care program – the Federal Employee Health Benefits Program (FEHBP) – does not include any plans that cover elective abortion. For the first time, a federally funded and managed health care plan will cover elective abortions.

10. Medicaid Rolls And Waiting Lines to Swell Even More. CBO estimates that as a result of the Democrats’ bill, one million more Americans will get their coverage from Medcaid, which is plagued with financial woes and wreaks all kinds of budgetary havoc on cash-strapped states. The Democrats’ bill, as the New York Times highlighted, will push even more Americans into a program where they will have trouble finding doctors and have to wait for potentially months to receive care. That’s not meaningful reform by any measure.



Congress health care vote: a dark day for freedom in America

Telegraph – By Nile Gardiner

The passage last night of Barack Obama’s health care reform bill through the House of Representatives is yet another blow to freedom in America inflicted by the Obama administration. The legislation, which comes at a staggering cost of $940 billion, will hugely add to the already towering national debt, now at over $12 trillion. It is yet another millstone round the necks of the American people, already faced with the highest levels of unemployment in a generation.

It is also a great leap forward by the United States towards a European-style vision of universal health care, which will only lead to soaring costs, higher taxes, and a surge in red tape for small businesses. This reckless legislation dramatically expands the power of the state over the lives of individuals, and could not be further from the vision of America’s founding fathers. It has also been rushed through Congress without proper scrutiny, in the face of overwhelming public opposition, and with not an ounce of bipartisan support.

Above all the health care bill is a thinly disguised vanity project for a president who is committed to transforming the United States from the world’s most successful large-scale free enterprise economy, to a highly interventionist society with a massive role for centralized government. The United States has thrived as a nation for over 230 years precisely because of its love for freedom and its belief in free markets.

What we have just witnessed is a massive slap in the face for limited government and the principle of individual responsibility. Its net result will be the erosion of freedom in America, and a further undermining of the country’s economic competitiveness. This may be a political victory for the president and his supporters in Congress, but it is in reality a defeat for America as a great power, and another Obama-led step towards US decline.



WASHINGTON, March 22, 2010–The head of The Heritage Foundation last night labeled the House-approved health bill a modern-day “Intolerable Act” and called for its repeal.

Edwin J. Feulner, president of the Washington, DC-based think tank, said the bill represented “a giant step toward creation of a European-style welfare state.” Instead of empowering individuals, he noted, the trillion-dollar, 2,700 page bill empowers an “unelected bureaucracy [to}... determine the content of health benefits packages, including medical treatment and procedures, and how much will be paid for those services."

Feulner called the government-centered approach "alien to our national character" and predicted that opposition to the widely unpopular measure will only grow.

"The American people are never permanently thwarted," Feulner observed. This legislation "can and will be repealed," he added.

With more than 600,000 active donors, The Heritage Foundation is by far the nation's most widely supported think tank. Established in 1973, it develops conservative, market-based policy recommendations to solve today's most pressing national challenges.

[Note: Full text of Dr. Feulner's statement follows.]

____________________________

Fellow Americans,

Late last night, in a narrow and partisan vote, the U.S. House of Representatives passed the most significant piece of social legislation in over seven decades. It did so in the face of overwhelming and principled opposition from the American people. Large majorities of Americans oppose this legislation because it offends the historic American dedication to the principle of self-government. They understand that this new law will accelerate Washington’s intrusion into our most personal and private decisions.

This is why opposition to this bill will only grow. Supporters of this bill argue that popular hostility will recede upon its passage. But, rather than cementing our descent into a European-style welfare state, last night’s passage of Obamacare is best seen as a historic turning point, a true catalyst for real change.

I write to reassure our supporters, the conservative movement, and the American people at large that The Heritage Foundation will do all within its power to keep this issue alive in the public square and make the intellectual case for the repeal of this act. We will bring all our resources to bear on behalf of those who believe America is and will always remain the Land of the Free.

This, rest assured, can be done. The American people are never permanently thwarted. President Obama’s health care legislation can and will be repealed.

Those who supported this bill are our fellow Americans, and we do not question their good will or patriotism. In public policy, however, good intentions alone do not suffice. And let there be no mistake, our philosophical differences with supporters of this bill are profound. The reason government-run health care has been the holy grail of the left for decades is that liberals realize as much as we do that it is a giant step toward the creation of a European-style welfare state. This is an evolution Americans have always resisted because it is alien to our national character.

If there is one good thing about the past year–one in which we have witnessed unprecedented horse-trading, press stunts, midnight votes and political manipulation in both houses of the U.S. Congress–it is that the American people have come away educated as never before about the differences between these two visions for America. Americans are strongly opposed to this bill not because they have been hoodwinked but because they understand this bill both in its particulars and at an instinctive, gut level.

They understand this health care bill forces individuals and employers to buy insurance policies designed by government bureaucrats. This intrusion is intended to follow us from cradle to grave.

Instead of empowering families and individuals to make their own choices, Obamacare empowers the bureaucracy to make those decisions for them. It is this unelected bureaucracy, unanswerable to the electorate, that will determine the content of health benefits packages, including medical treatment and procedures, and how much will be paid for those services. Yesterday’s legislation brings us one step closer to fully government-run medicine, with expanded government power over the financing and delivery of medical services that is sure to ration care in the name of cost control.

You will hear the left say this new entitlement will be popular with the American people. Do not believe them for a second. Yes, 32 million people will gain the theoretical right to health insurance. But over half of that coverage comes from placing at least 16 million more Americans into Medicaid, an unpopular and overextended welfare program that already rations care.

Americans will not stand for it. The American love for liberty prevailed in our founding, and will prevail once again.

In December of 1773, to protest unjust taxation, a group of American colonists dumped tea in Boston Harbor. The punishment for that first Tea Party was a series of intrusive laws passed by Parliament that were so oppressive that they could only be described as the “Intolerable Acts.”

Obamacare is today’s Intolerable Act. And just as the colonists banded together to enact change after those acts were passed, so should America respond to Obamacare. This law must be repealed.

Much of the fight against this bill will be led by the individual states, a process we encourage. All told, 33 states have already taken steps to challenge various aspects of Obamacare, including its unprecedented mandate that every American purchase health insurance or face a steep penalty for noncompliance. Four additional states will have this question on the ballot in November.

On Capitol Hill, the initial battle over Obamacare will occur when Congress considers whether to fund the tens of thousands of new federal bureaucrats necessary to implement the new law. In the tradition of the Hyde amendment, which prevented federal funding for abortions through annual limitations appended to appropriations bills, conservatives should look to the appropriations process as our first line of defense. Straightforward funding limitations would prevent any Administration official or any bureaucrat from implementing the law.

Our health care system requires reform, and we have long advocated measures to improve our system. We can and should strengthen the ability of American families to choose the coverage they want, rather than giving that power to Congress and its agency bureaucrats. We can also spur competition and choice to bring efficiency and lower costs to the health system, in place of the bill’s deadening regulation and damaging price controls. And, above all, we should foster state innovation rather than Washington-based central planning.

But such reforms can only be considered once this tragedy of arrogance has been fully and completely repealed.

Fortunately, there are no permanent victories or defeats in Washington. For millions of Americans and for Heritage, Round One of this fight is over. Today, The Heritage Foundation is answering the bell for Round Two. Join our fight; become a part of our mission. Help us educate our lawmakers, as well as those who aspire to become tomorrow’s lawmakers. Together we can make the persuasive case for repeal of this Intolerable Act and thereby return us to our American destiny.

Onward!

Sincerely,

Edwin J. Feulner, Ph.D., President, The Heritage Foundation




Factbox: Winners, losers in House healthcare bill

The healthcare reform measure passed by the House of Representatives on Sunday delivers some good news for drugmakers, device companies and even health insurers.

Reuters – Susan Heavey/Paul Simao

Among the changes in the legislation was a provision delaying hefty taxes on those three industries by at least a year. Following are some of the winners and losers in the overall healthcare industry based on a Senate version of the bill and the reconciliation bill passed by the House on Sunday. The Senate must vote on the reconciliation bill, so changes could still emerge.

WINNERS

BRAND-NAME DRUGMAKERS

* The pharmaceutical industry keeps its $80 billion agreement to provide savings and rebates. Its fees, to be divided among companies such as Pfizer and Merck & Co, would be delayed from 2010 to 2011, increasing from the initial $2.3 billion a year to $2.7 billion.

* Overall, wider insurance coverage could help offset the costs by providing more potential customers.

* Drugmakers warded off deeper price cuts in the Medicare program for the elderly. The House had sought to fully close the so-called “doughnut hole” where coverage drops temporarily after reaching a certain limit, but the bill maintains the industry’s 50-percent discount. The government will pay for another 25-percent discount.

* Lawmakers rejected Obama’s plan to end lucrative “pay-for-delay” settlements with brand-name drugmakers, a win for both generic and brand-name companies.

* The bill also discards an earlier provision that would have extended a hospital drug discount program.

BRAND BIOLOGIC DRUGMAKERS

* While the bill sets up a regulatory path for generic versions of expensive biologic drugs, Amgen and Roche’s Genentech unit and other biological drugmakers won a 12-year period of exclusive sales for brand-name drugs before facing competition from generic rivals.

DEVICE MAKERS

* Fees for medical device makers, such as Boston Scientific and Medtronic, would be delayed to 2013 after initial bills called for 2010. The sector earlier won a reduced industry tax of $20 billion, down from $40 billion.

* Rather than an overall industry fee, the bill now contains a 2.9 percent sales tax. Certain consumer products, including eyeglasses and contact lenses, are exempt.

HOSPITALS

* Hospitals, which include companies such as Universal Health Services and Tenet Healthcare, say they kept a $155 billion, 10-year deal to accept lower government payments from Medicare and Medicaid in exchange for an expected boost in insured customers.

* A provision that could have helped certain rural and children’s hospitals with an expanded drug discount program was dropped.

PHARMACY BENEFIT MANAGERS

* Analysts say increased Medicare drug coverage could boost pharmacy benefit managers (PBM) that administer prescription drug benefits as companies, such as Express Scripts and Medco Health Solutions, could see increased volumes.

* PBMs still face more disclosures but not new taxes. Companies must give the Department of Health and Human Services information about rebates from drugmakers for certain drugs.

LOSERS

HEALTH INSURERS

* While health insurers overall still face tighter regulation, companies such as Aetna Inc, Cigna Corp, UnitedHealth Group Inc and WellPoint Inc saw their $67 billion, 10-year tax delayed until 2014.

* Private Medicare plans called Medicare Advantage would see their payments frozen in 2011, then lowered in 2012. The plans, which can offer more benefits than traditional Medicare coverage, would also have to spend at least 85 cents out of every dollar on medical costs — leaving 15 cents toward overhead and salaries, among other things.

* Consumer protection rules would change the way companies do business, banning denial of coverage for preexisting medical conditions and ending lifetime coverage limits. Some curbs would be expanded to all health insurance plans six months after the bill passes, while others take effect in 2014.

* The bill changes penalties for individuals who do not buy health insurance as mandated. The fine is lowered from $495 to $325 in 2015 and from $750 to $695 in 2016, but the alternative method of fining people using a percentage of income increased slightly to 2.5 percent by 2016.

* The bill does not include President Barack Obama’s call for federal oversight of health insurance rates. It also expands tax credits and other financing to help more people afford insurance.

* Lawmakers have said roughly 30 million more Americans could have insurance with the reform.

GENERIC DRUGMAKERS

* The 12-year period of exclusive brand-name sales of biologic drugs surpasses the 5-7 years proponents had sought.

* Overall, companies that make generic versions of brand-name drugs see little direct help, although increasing insurance access may help more people buy medicine.

* But the bill includes a 75-percent discount on generic drugs in Medicare, the same as on brand-name drugs. Companies were concerned that closing the Medicare “doughnut hole” would turn people away from cheaper, generic medicines.

TANNING BED MAKERS

* The bill keeps a 10-percent tax on consumers who use indoor tanning salons, seeking to raise $2.7 billion by 2019 while discouraging a practice that can cause skin cancer.



A Campaign Begins Today

NRO – Mitt Romney

America has just witnessed an unconscionable abuse of power. President Obama has betrayed his oath to the nation — rather than bringing us together, ushering in a new kind of politics, and rising above raw partisanship, he has succumbed to the lowest denominator of incumbent power: justifying the means by extolling the ends. He promised better; we deserved better.

He calls his accomplishment “historic” — in this he is correct, although not for the reason he intends. Rather, it is an historic usurpation of the legislative process — he unleashed the nuclear option, enlisted not a single Republican vote in either chamber, bribed reluctant members of his own party, paid-off his union backers, scapegoated insurers, and justified his act with patently fraudulent accounting. What Barack Obama has ushered into the American political landscape is not good for our country; in the words of an ancient maxim, “what starts twisted, ends twisted.”

His health-care bill is unhealthy for America. It raises taxes, slashes the more private side of Medicare, installs price controls, and puts a new federal bureaucracy in charge of health care. It will create a new entitlement even as the ones we already have are bankrupt. For these reasons and more, the act should be repealed. That campaign begins today.

— Mitt Romney is the former governor of Massachusetts and author of No Apology.



Opposing view: ‘It must be repealed’

This monstrosity ignores people’s will and violates the Constitution.

USA Today = By Jim DeMint

There’s no fixing the government health care takeover Democrats forced through on Sunday. It must be repealed.

After telling Americans in 2008 that they would lower spending, taxes and insurance premiums, Democrats passed a bill that breaks every promise. Using secret deals, kickbacks and carve-outs, Democratic leaders jammed through legislation to control more than one-sixth of the nation’s economy.

The plan will explode the national debt, raise $569.2 billion in new taxes, force taxpayers to fund abortions, and impose unconstitutional mandates on every American.

All of this was done in the face of overwhelming public outrage and bipartisan opposition in Congress. This process has been an insult to our democracy and threatens our nation’s prosperity and freedom.

Government bureaucrats will now dictate the terms of our health care system. Americans must purchase Washington-formulated insurance plans or pay stiff penalties, a requirement that defies the Constitution and is a boon to the insurance companies the Democrats pretend to despise.

This plan raids $52 billion from Social Security. It cuts nearly $500 billion from Medicare and doesn’t count the hundreds of billions needed to compensate doctors who treat elderly patients. A portion of this trillion dollar bill is paid for with a government takeover of the student loan industry. The government will shut down private lenders, sell expensive loans to 19 million college students and use the profits to finance “ObamaCare.”

It adds millions of people to Medicaid, a failing program that many doctors and pharmacists refuse to participate in. Medicaid won’t do its patients any good if a doctor won’t treat them or a pharmacist won’t fill their prescriptions.

Even the bill’s most strident supporters doubt its effectiveness. Many admit to not understanding the bill they voted on. Some voted “yes” out of fear a “no” vote would hurt the president.

Americans objected at every turn, peacefully protesting for over a year and begging their leaders not to take away their health care freedom. They asked for common-sense solutions such as buying health insurance across state lines, stopping frivolous lawsuits that drive up costs, and giving the same tax breaks to those who don’t get insurance from employers.

Washington didn’t listen.

When a president and a Congress collude to violate the Constitution and ignore the American people, everything our nation stands for is at risk. It’s not too late to undo the damage.

I, and other Republicans, will work to repeal this monstrosity, and give Americans freedom to make their own health care choices.

Sen. Jim DeMint is a Republican from South Carolina.



Pelosi hails church agency on health reform

United Methodist News Service

The landmark vote on health care by the House of Representatives March 21 affirms The United Methodist Church’s Social Principles that declares health care is a “basic human right,” the top executive of the denomination’s social action agency said.

“For decades, the General Board of Church and Society has worked alongside thousands of United Methodists to achieve health care for all in the U.S.,” said Jim Winkler, chief executive of the United Methodist Board of Church and Society. “This vote brings us closer to that reality.”

The majority of United Methodist lawmakers in the House voted against the plan. However, in her closing remarks before the legislation was approved, Speaker Nancy Pelosi referred to The United Methodist Church as one of many organizations “sending a clear message to members of Congress: Say yes to health care reform.” More specifically, the Board of Church and Society is included on Pelosi’s Web site listing organizations supporting reform.

While it has historically supported access to health care for all, the denomination’s top lawmaking assembly did not act on the specific legislation. General Conference, held every four years, last met in 2008.

Differing opinions

United Methodists, like most Americans, have taken different positions on the basic legislation approved by the House. Opponents of the legislation have cited its cost, its expansion of federal power and concerns that it would reverse past policy by allowing federal funding of abortions.

The United Methodist Church is third among religious groups in the total number of members of the 111th Congress. Among its 44 members in the House, 26 voted no; 18 voted yes.

“There are parts of this bill that are good, including much-needed health insurance reforms and making health insurance affordable for the uninsured,” said Rep. Mike Ross, a United Methodist from Arizona who opposed the legislation. “On the other hand, many parts of this bill cause me great concern, like telling people they must buy health insurance or be fined, cutting Medicare by more than a half-trillion dollars, increasing taxes and forcing businesses to provide health insurance to their employees.”

Rep. Marion Berry, a United Methodist from Arkansas, said health care reform “must be deficit-neutral and must be fully paid for by squeezing out more savings from the pharmaceutical manufacturers and private insurance industry instead of cramming down hospitals and other providers and taxing Americans.”

United Methodist Congresswoman Laura Richardson of California voted for the legislation.

“While this legislation does not include an comprehensive full public option as the House of Representatives preferred, it is a giant step forward in beginning the reform of our nation’s current neglectful health care system,” she said.

Palmer rejoices

Bishop Gregory Palmer, president of the Council of Bishops, said he “rejoiced” at the passage of the bill because it aligns with the values of The United Methodist Church.

Though the denomination’s chief legislative body, the General Conference, has taken no stand, it has been a strong advocate for universal health care.

The United Methodist Church in its law book states: “We believe it is a governmental responsibility to provide all citizens with health care.”

The 2008 United Methodist Book of Resolutions adds: “In the United States today, however, fulfillment of this duty is thwarted by simultaneous crises of access, quality, and cost. The result of these crises is injustice to the most vulnerable, increased risk to health care consumers, and waste of scarce public and private resources.”

Resolution 3201 in the United Methodist Book of Resolutions charges the United Methodist Board of Church and Society with primary responsibility for advocating health care for all in the United States Congress. The resolution was approved by the 2008 General Conference, the denomination’s highest policy-making body.

Paul Brown, a Duke graduate student, called for unity amid disagreement.

“Sisters and brothers, our unity is grounded in Jesus Christ—not in the details of health care reform,” he wrote on the denomination’s Facebook site. “As a church that includes both Hillary Clinton and George W. Bush as members, we are free to disagree on various social issues, but we remain united in one Lord, one faith, and one baptism.”

Votes by United Methodists in House of Representatives

YES:

Vic Snyder (D), Ark. Doris Matsui (D), Cali. Laura Richardson (D), Cali. Allen Boyd (D), Fla. Suzanne Kosmas (D), Fla. Baron Hill (D), Ind. David Loebsack (D), Iowa Dutch Ruppersberger (D), Md. Mark Schauer (D), Mich. Bennie Thompson (D), Miss. Russ Carnahan (D), Mo. Emanuel Cleaver II (D), Mo. Betty Sutton (D), Ohio Bart Gordon (D), Tenn. Lloyd Doggett (D), Texas Gene Green (D), Texas Solomon Ortiz (D), Texas Rick Larsen (D), Wash.

NO:

Marion Berry (D), Ark. Mike Ross (D), Ark. Mike Coffman (R), Colo. Jeff Miller (R), Fla. Bill Posey (R), Fla. Bill Young (R), Fla. Steve Buyer (R), Ind. Lynn Jenkins (R), Kan. Jerry Moran (R), Kan. Ed Whitfield (R), Ky. Mike Rogers (R), Mich. John Kline (R), Minn. Lee Terry (R), Neb. Steven LaTourette (R), Ohio Dan Boren (D), Okla. Tom Cole (R), Okla. Phil Roe (R), Tenn. Joe Barton (R), Texas John Culberson (R), Texas Chet Edwards (D), Texas Kay Granger (R), Texas Ralph Hall (R), Texas Sam Johnson (R), Texas Pete Olson (R), Texas Pete Sessions (R), Texas Rick Boucher (D), Virginia



Tell your Friends and Family to Sign the Thank You Card to Speaker Pelosi



History Shows True Costs Are Often Significantly Understated

Medicare (hospital insurance)

In 1965, as Congress considered legislation to establish a national Medicare program, the House Ways and Means Committee estimated that the hospital insurance portion of the program, Part A, would cost about $9 billion annually by 1990.v Actual Part A spending in 1990 was $67 billion.

The actuary who provided the original cost estimates acknowledged in 1994 that, even after conservatively discounting for the unexpectedly high inflation rates of the early „70s and other factors, “the actual [Part A] experience was 165% higher than the estimate.”

Medicare (entire program)

In 1967, the House Ways and Means Committee predicted that the new Medicare program, launched the previous year, would cost about $12 billion in 1990. viii Actual Medicare spending in 1990 was $110 billion—off by nearly a factor of 10.

ESRD program

In 1972, Congress enacted a universal entitlement to kidney dialysis for patients suffering from end stage renal disease. The program proved twice as expensive as the publicly predicted levels—$229 million in 1974 instead of the predicted $100 million. The bill‟s authors had seriously underestimated the demand for services, especially among the over-65 population.
Medicaid DSH program.

In 1987, Congress estimated that Medicaid‟s disproportionate share hospital (DSH) payments—which states use to provide relief to hospitals that serve especially large numbers of Medicaid and uninsured patients—would cost less than $1 billion in 1992xi. The actual cost that year was a staggering $17 billion. Among other things, federal lawmakers had failed to detect loopholes in the legislation that enabled states to draw significantly more money from the federal treasury than they would otherwise have been entitled to claim under the program‟s traditional 50-50 funding scheme.

Medicare home care benefit

When Congress debated changes to Medicare‟s home care benefit in 1988, the projected 1993 cost of the benefit was $4 billion. The actual 1993 cost was more than twice that amount, $10 billion.

Medicare catastrophic coverage benefit

In 1988, Congress added a catastrophic coverage benefit to Medicare, to take effect in 1990. In July 1989, the Congressional Budget Office (CBO) doubled its cost estimate for the program, for the four-year period 1990-1993, from $5.7 billion to $11.8 billion.

CBO explained that it had received newer data showing it had significantly under-estimated prescription drug cost growth, and it warned Congress that even this revised estimate might be too low. This was a principal reason Congress repealed the program before it could take effect.

SCHIP

In 1997, Congress established the State Children‟s Health Insurance Program as a capped grant program to states, and appropriated $40 billion to be doled out to states over 10 years at a rate of roughly $5 billion per year, once implemented. In each year, some states exceeded their allotments, requiring shifts of funds from other states that had not done so.

By 2006, unspent reserves from prior years were nearly exhausted. To avert mass disenrollments, Congress decided to appropriate an additional $283 million in FY 2006 and an additional $650 million in FY 2007.

Massachusetts Commonwealth Care

In 2006, the Bay State passed a historic universal-coverage plan, which combined a mandate on all residents to have health coverage with generous subsidies for lower-income uninsured families. At that time, the program was predicted to cost roughly $472 million in fiscal year 2008. It cost $628 million that year.xvi In the words of one Democratic state senator, who came to regret his vote for the plan:

The assumption was that, as more people—and, in particular, more young and relatively healthy people—joined the system, premiums would go down across the board. There was also the assumption that as more people became insured, the number of people going to the emergency room would drop dramatically, saving the Commonwealth money. Neither of those things happened—at least not enough to produce the cost savings we were told we would see. In fact, health care reform has cost the Commonwealth much more than expected.

Source: Senate Joint Economic Committee (PDF)


Related Previous Posts:

PelosiCare: This Magic Moment…The Losers Try Again!

Wealth Redistribution: Legal Plunder Or Just California Dreamin?

Democratic Liberalism: New Freedom Or Reimagining Socialism?

Charity in Truth: Classical Economics, Globalization, And The Pope’s Discontent

What Would Ronald Reagan Say About ObamaCare And Socialized Medicine?

Related Links:

Michelle Malkin:Obama to sign the Demcare House of Cards

Politico: Obama stumps for health care in Iowa

WSJ: Pro-life Democrats, R.I.P.


update: added Emergency video – end

Are Health Care Reform Cost Estimates Reliable?
History Shows True Costs Are Often Significantly Understated
Since the end of World War II, major health care reform proposals have generally always cost more—sometimes significantly more—than the highest cost estimates published while the legislation was pending. Consider the following examplesi:
United Kingdom’s National Health Service. In 1946, the British government estimated that the first-year cost of its proposed National Health Service, which would provide free health care to all citizens at the point of service, would be £260 million. The actual expenditures of the NHS in its first year of operation (1948-49) were £359 million—38% more than predicted.ii
Britain‟s official assessment of what happened is typically understated: “Architects of the NHS underestimated the immediate public demand and the consequent costs.”iii A more vivid assessment, from the British Health Minister in May 1949 to his Cabinet colleagues:
If the present [budget] estimates are not to be exceeded, services must be withheld which the community has proved it urgently needs—dental treatment and spectacles must be refused, beds must be closed, staff dismissed, and waiting lists already appallingly long must grow even longer. I do not think my colleagues will wish this to happen; I hope they will share my view that the additional money must be found to prevent its happening. But if they do not, I shall need their assistance in determining which services should be withheld and which developments cancelled.iv
Over the past 60 years, British debates about “NHS under-funding” have followed essentially this same pattern: Demand for “free” services is still exceeding available funds; therefore, the government must either increase funding or reduce patients‟ access to care.
This problem is not exclusive to Britain. Government health care programs in the U.S. have proven just as vulnerable to cost under-projections: Table 1: By a Country Mile: Historical Examples of Erroneous Health Care Cost Estimates (billions of dollars*) Benefit Estimated cost at time of enactment** Actual cost Diff. Error ratio
UK National Health Service
.260
.359
-.099
1.38 to 1 Medicare hospital insurance 9 67 -58 7.44 to 1
Medicare (entire program)
12
110
-98
9.17 to 1 Medicare ESRD program .1 .229 -.129 2.29 to 1
Medicaid DSH program
1
17
-16
17.00 to 1 Medicare home care benefit 4 10 -6 2.50 to 1
Medicare catastrophic coverage***
5.7
11.8
-6.1
2.07 to 1 Massachusetts Health Reform .725 .869 -.144 1.20 to 1
* UK example is in British pounds. **All figures are per-year or for a single specified year, unless otherwise noted. See accompanying text for additional details.
*** Multi-year estimate.
Source: Joint Economic Committee, Republican staff, July 2009.
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Medicare (hospital insurance). In 1965, as Congress considered legislation to establish a national Medicare program, the House Ways and Means Committee estimated that the hospital insurance portion of the program, Part A, would cost about $9 billion annually by 1990.v Actual Part A spending in 1990 was $67 billion.vi The actuary who provided the original cost estimates acknowledged in 1994 that, even after conservatively discounting for the unexpectedly high inflation rates of the early „70s and other factors, “the actual [Part A] experience was 165% higher than the estimate.”vii
Medicare (entire program). In 1967, the House Ways and Means Committee predicted that the new Medicare program, launched the previous year, would cost about $12 billion in 1990. viii Actual Medicare spending in 1990 was $110 billion—off by nearly a factor of 10.ix
ESRD program. In 1972, Congress enacted a universal entitlement to kidney dialysis for patients suffering from end stage renal disease. The program proved twice as expensive as the publicly predicted levels—$229 million in 1974 instead of the predicted $100 million. The bill‟s authors had seriously underestimated the demand for services, especially among the over-65 population.x
Medicaid DSH program. In 1987, Congress estimated that Medicaid‟s disproportionate share hospital (DSH) payments—which states use to provide relief to hospitals that serve especially large numbers of Medicaid and uninsured patients—would cost less than $1 billion in 1992xi. The actual cost that year was a staggering $17 billion. Among other things, federal lawmakers had failed to detect loopholes in the legislation that enabled states to draw significantly more money from the federal treasury than they would otherwise have been entitled to claim under the program‟s traditional 50-50 funding scheme.xii
Medicare home care benefit. When Congress debated changes to Medicare‟s home care benefit in 1988, the projected 1993 cost of the benefit was $4 billion. The actual 1993 cost was more than twice that amount, $10 billion.xiii
Medicare catastrophic coverage benefit. In 1988, Congress added a catastrophic coverage benefit to Medicare, to take effect in 1990. In July 1989, the Congressional Budget Office (CBO) doubled its cost estimate for the program, for the four-year period 1990-1993, from $5.7 billion to $11.8 billion. CBO explained that it had received newer data showing it had significantly under-estimated prescription drug cost growth, and it warned Congress that even this revised estimate might be too low. This was a principal reason Congress repealed the program before it could take effect.xiv
SCHIP. In 1997, Congress established the State Children‟s Health Insurance Program as a capped grant program to states, and appropriated $40 billion to be doled out to states over 10 years at a rate of roughly $5 billion per year, once implemented. In each year, some states exceeded their allotments, requiring shifts of funds from other states that had not done so. By 2006, unspent reserves from prior years were nearly exhausted. To avert mass disenrollments, Congress decided to appropriate an additional $283 million in FY 2006 and an additional $650 million in FY 2007.xv
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Massachusetts Commonwealth Care. In 2006, the Bay State passed a historic universal-coverage plan, which combined a mandate on all residents to have health coverage with generous subsidies for lower-income uninsured families. At that time, the program was predicted to cost roughly $472 million in fiscal year 2008. It cost $628 million that year.xvi In the words of one Democratic state senator, who came to regret his vote for the plan:
The assumption was that, as more people—and, in particular, more young and relatively healthy people—joined the system, premiums would go down across the board. There was also the assumption that as more people became insured, the number of people going to the emergency room would drop dramatically, saving the Commonwealth money. Neither of those things happened—at least not enough to produce the cost savings we were told we would see. In fact, health care reform has cost the Commonwealth much more than expected.xvii
Why So Far Off?
A certain level of error in cost projections is to be expected, especially regarding sectors as complicated as health care. But as Table 1 shows, the foregoing examples represent extreme under-estimates, with error ratios ranging from 1.2:1 to 17:1. What explains this phenomenon? For reasons that may never be entirely understood, health care appears to be an area with great room for overly optimistic assumptions regarding changes in the behavior of patients and providers, technological innovation, the practice of medicine, program take-up rates, future health cost inflation, and the likely success of proposed cost-control mechanisms.
This is not to say the official “scorekeepers” are bad at their jobs. On the contrary, they typically exhibit very high levels of skill, integrity, independence, and professionalism—often working under extremely tight time frames and hectic conditions, and not infrequently amidst a din of interested voices attempting to influence their work.
In some of the above cases—such as the British NHS, the U.S. ESRD entitlement, and the Massachusetts health care reform—initial public estimates appear to have simply underestimated the level of demand for the proposed new benefits, perhaps due to insufficient data or a lack of experience administering benefits of that sort. In other cases, such as Medicare‟s creation, the actuaries could not have been expected to factor in future program expansions not actually authorized in the then-pending legislation. And of course, even the best actuary is helpless
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against a legislative draftsman who delays a new program‟s full implementation in order to push a large portion of its costs beyond the last year of the official estimating window.
Whatever the causes, it seems there is a kind of Murphy‟s Law of health care legislation: “If it can cost more than the highest available official estimate, it probably will.” The House and Senate are currently considering health care reform bills that would cost in the vicinity of $1 trillionxviii over the first 10 years and $2.4 trillionxix over the first 10 years of full implementation. Given the potentially significant fiscal and budgetary consequences, lawmakers will want to keep this variant of Murphy‟s Law in mind when considering major health reform legislation.
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