Dems pass cost-raising health plan in committee

Today, with the help of liberal Maine Republican Senator Olympia Snowe, Democrats were able to push some kind of cost-increasing health care legislation out of the Senate Finance Committee and closer to a vote on the Senate floor. The “Baucus Bill,” named for Senator Max Baucus, contains very little to do with increasing health insurance coverage and everything to do with raising taxes, fees and increasing the cost of existing insurance plans by thousands. Sounds like a case of typical Washington incompetence being celebrated by the Democrats.

The most amazingly pathetic part of this story is that the bill, as it is, has not even been written yet. The Finance Committee voted for a “shell” in which the legislative language will be inserted. Nowhere but the halls of congress can something like this happen. If I go to a bank with just a summary of a business plan, I doubt they’re giving me a business start-up loan until they see the entire plan. Not with congress, they can vote “Yes” on a shell summary and act like they’ve done something meaningful.

Reuters reports on the debacle:

WASHINGTON (Reuters) – A key U.S. Senate committee endorsed a sweeping healthcare overhaul on Tuesday, gaining the support of an influential Republican and delivering President Barack Obama a victory on his top domestic priority.

The Democratic-controlled Senate Finance Committee approved the measure by 14-9, with Senator Olympia Snowe becoming the first Republican in Congress to back a healthcare reform bill.

“Today we reached a critical milestone in our effort to reform our healthcare system,” said Obama, who warned there were still big challenges ahead for healthcare reform.

The bill, the last of five pending health measures to clear a committee in Congress, will be merged with the Senate health panel’s version for a floor vote.

Snowe, who had been courted by Obama and his fellow Democrats, said she backed the plan with reservations and could not guarantee her continued support as the overhaul advances.

“My vote today is my vote today. It doesn’t forecast what my vote will be tomorrow,” Snowe said.

As the Wall Street Journal states, this bill is nothing more than a tax bill:

Remember when health-care reform was supposed to make life better for the middle class? That dream began to unravel this past summer when Congress proposed a bill that failed to include any competition-based reforms that would actually bend the curve of health-care costs. It fell apart completely when Democrats began papering over the gaping holes their plan would rip in the federal budget.

As it now stands, the plan proposed by Democrats and the Obama administration would not only fail to reduce the cost burden on middle-class families, it would make that burden significantly worse.

Consider the bill put forward by the Senate Finance Committee. From a budgetary perspective, it is straightforward. The bill creates a new health entitlement program that the Congressional Budget Office (CBO) estimates will grow over the longer term at a rate of 8% annually, which is much faster than the growth rate of the economy or tax revenues. This is the same growth rate as the House bill that Sen. Kent Conrad (D., N.D.) deep-sixed by asking the CBO to tell the truth about its impact on health-care costs.

To avoid the fate of the House bill and achieve a veneer of fiscal sensibility, the Senate did three things: It omitted inconvenient truths, it promised that future Congresses will make tough choices to slow entitlement spending, and it dropped the hammer on the middle class.

One inconvenient truth is the fact that Congress will not allow doctors to suffer a 24% cut in their Medicare reimbursements. Senate Democrats chose to ignore this reality and rely on the promise of a cut to make their bill add up. Taking note of this fact pushes the total cost of the bill well over $1 trillion and destroys any pretense of budget balance.

It is beyond fantastic to promise that future Congresses, for 10 straight years, will allow planned cuts in reimbursements to hospitals, other providers, and Medicare Advantage (thereby reducing the benefits of 25% of seniors in Medicare). The 1997 Balanced Budget Act pursued this strategy and successive Congresses steadily unwound its provisions. The very fact that this Congress is pursuing an expensive new entitlement belies the notion that members would be willing to cut existing ones.

Most astounding of all is what this Congress is willing to do to struggling middle-class families. The bill would impose nearly $400 billion in new taxes and fees. Nearly 90% of that burden will be shouldered by those making $200,000 or less.

It might not appear that way at first, because the dollars are collected via a 40% tax on sales by insurers of “Cadillac” policies, fees on health insurers, drug companies and device manufacturers, and an assortment of odds and ends.

But the economics are clear. These costs will be passed on to consumers by either directly raising insurance premiums, or by fueling higher health-care costs that inevitably lead to higher premiums. Consumers will pay the excise tax on high-cost plans. The Joint Committee on Taxation indicates that 87% of the burden would fall on Americans making less than $200,000, and more than half on those earning under $100,000.

Industry fees are even worse because Democrats chose to make these fees nondeductible. This means that insurance companies will have to raise premiums significantly just to break even. American families will bear a burden even greater than the $130 billion in fees that the bill intends to collect. According to my analysis, premiums will rise by as much as $200 billion over the next 10 years—and 90% will again fall on the middle class.

Senate Democrats are also erecting new barriers to middle-class ascent. A family of four making $54,000 would pay $4,800 for health insurance, with the remainder coming from subsidies. If they work harder and raise their income to $66,000, their cost of insurance rises by $2,800. In other words, earning another $12,000 raises their bill by $2,800—a marginal tax rate of 23%. Double-digit increases in effective tax rates will have detrimental effects on the incentives of millions of Americans.

Why does it make sense to double down on the kinds of entitlements already in crisis, instead of passing medical malpractice reform and allowing greater competition among insurers? Why should middle-class families pay more than $2,000 on average, by my estimate, in taxes in the process?

Middle-class families have it tough enough. There is little reason to believe that the pain of the current recession, housing downturn, and financial crisis will quickly fade away—especially with the administration planning to triple the national debt over the next decade.

The promise of real reform remains. But the reality of the Democrats’ current effort is starkly less benign. It will create a dangerous new entitlement that will be paid for by the middle class and their children.

So there it is and the Democrats are acting like this is a groundbreaking victory when, in fact, it is higher taxes and will leave 25 million people still uninsured. Enough with the government incompetence on this issue, it sickens me.

The solutions, as they always have, will come from the private sector, not the morons in Washington trying to pass obscure bills in a finance committee which don’t even accomplish what Democrats allege is needed.

Luckily, for the sake of the country, Republican Sen. Mitch McConnell says it won’t get far:

WASHINGTON, D.C. – U.S. Senate Republican Leader Mitch McConnell made the following statement Tuesday regarding the Finance Committee vote on partisan health care reform:

“Sen. Snowe called me this morning to let me know that while she continues to have serious, substantive policy reservations with this proposal, she wanted to keep the process moving. I share her concerns about the direction of this bill once it leaves the committee, and her call for transparency before we vote to proceed to any bill on the floor.

“The fact is, this proposal will never come before the Senate. But what we do know is that the bill written behind closed doors here in the Capitol will be another 1,000-page, trillion-dollar Washington takeover. We know it will slash a half-trillion dollars from seniors’ Medicare, add new taxes and raise premiums. That’s not reform.”

Amen to that, lets hope it goes nowhere. Americans are opposed to government growth and government control of health care, when will the arrogant politicians acknowledge this fact?

Keep fighting for the real solutions.