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The Health Care Legislative Debacle Continues

The Baucus health care bill passed the Senate Finance Committee yesterday by a vote of 14 to 9.  The lone Republican who voted “yes” was  Maine Senator Olympia J. Snowe.   This bill now joins four other versions of universal health care legislation that have advanced through the committee stage in both the Senate and the House of Representatives and are wending their way to the floor of each chamber in one form or another.   And then there will be the Conference Committee, where the final bill will be hashed out behind closed doors.

The Baucus bill has no public health insurance option.   That alone is heresy to the left-wing Democrats in the House and to some like-minded Senators as well, such as Chuck Schumer and John D. Rockefeller IV.  The bill also has a price tag of nearly $200 billion less than the more liberal alternatives, making it the only bill that supposedly contributes to deficit reduction according to the Congressional Budget Office.   The left-wing choruses in both houses are already complaining that it is too stingy.

Aside from complaints by fellow Democrats that his bill has no public option and offers too little in the way of subsidies, Baucus is facing major opposition from Democrats in both houses of Congress — as well as from their union constituents and from businesses — who oppose the bill’s  excise tax on high-priced health insurance plans.

When Sean Hannity tried to ask his panel guest Ned Lamont how he thought the Democrats in Congress would be able to reconcile the fundamental policy conflicts among themselves, Lamont repeatedly ducked the question.  Hopefully, they won’t be able to reconcile those conflicts, and we’ll end up instead with a bill that addresses insurance company abuses (such as denying coverage for pre-existing conditions), opens up competition across state lines, and places sensible limits on medical malpractice lawsuits.   I’m not optimistic about such an outcome, but hope springs eternal.

Some may argue that the Baucus bill is a middle-of-the-road measure that represents a reasonable legislative compromise.  But while it is perhaps the least rotten in a barrel full of rotten apples, it has major flaws.  It front-loads the revenue collection and back-loads the benefits — hence, it is in essence a deficit-reduction smoke-and-mirrors exercise.  Its excise tax on high-end insurance plans will inevitably be passed on to consumers.  The proponents of the public option say that a government-run program competing with the private insurance plans will prevent that from happening, but relying on a government-run program for efficient, cost-effective delivery of any service is a pipe dream.   Just look at the Post Office.

The fact is that leftists (who call themselves “progressives”) want the middle class to pay more for their health care — all in the interests of wealth redistribution.  They really don’t care if the average consumer has to pay the excise tax in whole or in part.

Under a self-styled “progressive” plan authored by Barack Obama’s economic advisor Jason Furman when he was at the Brookings Institution, for example, typical families would have to pay half of their health costs until they reached 7.5 percent of their income.  In order to more fully subsidize the health costs of lower income families, the plan by design would force middle-income families as well as high-income families to pay much more of their health costs out of their own pockets before their insurance reimbursements would kick in.  Furman’s own data indicates that, while under a conventional health plan today an average family of four with a total income of $80,000 has an out-of-pocket expenditure of $783, his “progressive” plan would increase by two and a half times that family’s out-of-pocket non-reimbursable expenditure — to $2,052.

This means, for example, that if two working parents making a combined income of $80,000 decide to take the most conservative course in anticipation of significant medical bills for their family of four, and they choose to contribute more premiums to their employer-sponsored insurance programs in return for lower deductibles, the “progressive plan” would take the higher premium contributions from these parents while reimbursing someone else at their family’s expense.

This is nothing but another form of government-imposed wealth redistribution.  The Baucus excise tax and the other taxes contained in competing bills — as well as the Medicare cuts — are all different flavors of wealth redistribution.   And that, along with rationed care, is what the Baucus bill and its even worse alternatives will bring us, rather than real reform.

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