Saturday, November 7, 2009

Be careful of what you wish for, be wary of what you get

In the beginning...

Today is a watershed day in American history. Depending on which side of the issue you’re on, today’s vote by the House of Representatives is either a long-awaited bit of salvation for millions of uninsured or underinsured Americans…or you see it as the beginning of a long slide down a slippery slope signaling the end of our Republic.

As The New York Times reports, “Handing President Obama a hard-fought victory, the House narrowly approved a sweeping overhaul of the nation’s health care system on Saturday night, advancing legislation that Democrats said could stand as their defining social policy achievement. After a daylong clash with Republicans over what has been a Democratic goal for decades, lawmakers voted 220 to 215 to approve a plan that would cost $1.1 trillion over 10 years. Democrats said the legislation would provide overdue relief to Americans struggling to buy or hold on to health insurance.”

Next stop, the U.S. Senate, where the sledding will be a bit tougher. (According to The Politico,“Sen. Tom Coburn, the Oklahoma Republican who developed a close friendship with President Obama when they served together in the Senate, is threatening to have the entire health care bill read on the Senate floor.”)

The vote: 220-215. Close, GOP, but no cigar...

The vote, which comes on the heels of key Democratic defeats last Tuesday, was engineered by Speaker Nancy Pelosi (D-San Francisco). The stories are numerous concerning her threats to fellow Democrats – particularly freshman Reps – who were told to “toe the line” or risk having Pelosi run candidates against them in their next elections. The threatened Congressmen, worried that the Virginia and New Jersey gubernatorial losses portend bad things ahead, were wondering if it was worse to lose on their own (because they supported the health insurance bill) or to lose with the help of their own party’s leadership (for not going along with the vote). Writing in The Wall Street Journal, Kim Strassel writes of Pelosi’s efforts,“She's not about to give her members time to absorb the ugly results, or to be further rattled by next week's Veteran's Day break, when they go home for a repeat of the August furies. If not now, she knows, maybe never. (Down to the wire, a number of Dem freshmen considered bolting…)

It was close. "A lot of Democrats had a sneaky suspicion Mrs. Pelosi was willing to sacrifice their seats on the altar of liberal government health care. Combined with the election results and Mr. Obama's falling poll numbers, this was no recipe for loyalty."

Late add/bonus: Who on Capitol Hill gets what from Big Health/Pharma...

According to Harvard’s Martin Feldstein, “Obamacare could have the unintended consequence of raising health insurance premiums and causing a decline in the number of people with insurance.”

So how does this latest version of the Law of Unintended Consequences work? “A key feature of the House and Senate health bills would prevent insurance companies from denying coverage to anyone with preexisting conditions. The new coverage would start immediately, and the premium could not reflect the individual's health condition,” he writes in The Washington Post.

“This well-intentioned feature would provide a strong incentive for someone who is healthy to drop his or her health insurance, saving the substantial premium costs. After all, if serious illness hit this person or a family member, he could immediately obtain coverage,” he adds. “As healthy individuals decline coverage in this way, insurance companies would come to have a sicker population. The higher cost of insuring that group would force insurers to raise their premiums. (Separate accident policies might develop to deal with the risk of high-cost care after accidents when there is insufficient time to buy insurance.)”

Feldstein, a professor of economics at Harvard University and president emeritus of the nonprofit National Bureau of Economic Research, also writes, “The higher premium level would cause others who are currently insured to drop coverage, pushing premiums even higher. The result would be a spiral of rising premiums and shrinking numbers of insured.” Feldstein also was chairman of the Council of Economic Advisers from 1982 to 1984.

Add rising health premiums: From the folks over at the Cato Institute – “A new study by Cato Adjunct Scholar Aaron Yelowitz concludes that the cost of President Obama’s health care plan would fall inordinately upon younger Americans, meaning they are in essence being asked to subsidize the care of their elders: President Obama won the presidency with 66 percent of the vote among 18-to-29 year-olds. That’s a larger share than any presidential candidate has won in decades. Yet his health care overhaul could impose its greatest burdens on young adults, says Yelowitz.

“Health care proposals moving through Congress would force most or all Americans to purchase health insurance (an “individual mandate”) and would impose price controls on health insurance (“community rating”) that would limit insurers’ ability to offer lower premiums to low-risk enrollees,” blog reports. Those provisions would drive premiums down for 55-year-olds but would drive them up for 25-year-olds—who are then implicitly subsidizing older adults. According to the Urban Institute, many young people could see their premiums double, whereas premiums for older adults could be cut in half. Read the entire thing.

She ran it through...

How much will it cost to not participate?: “H.R. 3962 provides that an individual (or a husband and wife in the case of a joint return) who does not, at any time during the taxable year, maintain acceptable health insurance coverage for himself or herself and each of his or her qualifying children is subject to an additional tax.” [page 1]. “If the government determines that the taxpayer’s unpaid tax liability results from willful behavior, the following penalties could apply…” [page 2]. “Criminal penalties

Prosecution is authorized under the Code for a variety of offenses. Depending on the level of the noncompliance, the following penalties could apply to an individual:
• Section 7203 – misdemeanor willful failure to pay is punishable by a fine of up to $25,000 and/or imprisonment of up to one year.
• Section 7201 – felony willful evasion is punishable by a fine of up to $250,000 and/or imprisonment of up to five years.” [page 3]

When confronted with this same issue during its consideration of a similar individual mandate tax, the Senate Finance Committee worked on a bipartisan basis to include language in its bill that shielded Americans from civil and criminal penalties. The Pelosi bill, however, contains no similar language protecting American citizens from civil and criminal tax penalties that could include a $250,000 fine and five years in jail.

“The Senate Finance Committee had the good sense to eliminate the extreme penalty of incarceration. Speaker Pelosi’s decision to leave in the jail time provision is a threat to every family who cannot afford the $15,000 premium her plan creates. Fortunately, Republicans have an alternative that will lower health insurance costs without raising taxes or cutting Medicare,” said Camp.

According to the Congressional Budget Office the lowest cost family non-group plan under the Speaker’s bill would cost $15,000 in 2016.

Some of the bill’s little known components also include, “Lower taxes for gay couples who receive health benefits from employers. Nutrition labeling requirements for snack food sold in vending machines and many restaurants. A new program to teach parents how to interact with their children.”

Another health “crisis” is here with the spread of the H1N1 flu. Some are questioning the government’s promise to deliver improved access to and better quality healthcare that would come with nationalized medicine when it can’t handle an epidemic that’s been on our radar for quite some time.

What would Ben do?

So as another day passes in this nation and we begin to wonder what we’re getting ourselves into, I’m reminded of what Benjamin Franklin said at the close of the Constitutional Convention in Philadelphia on September 18, 1787. As Franklin emerged from the long task now finished, he was asked, "Well Doctor, what have we got, a republic or a monarchy?" Franklin replied, "A republic - if you can keep it."

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