He said the repeal of Obamacare “is essential to any meaningful effort to bring down health care costs, provide greater stability and security of coverage to more Americans, and address our entitlement crisis. Both the program’s original design and its contorted final form make repairs at the edges unworkable. The only solution is to repeal it and pursue genuine health care reform in its stead.”
And that is the key – we must pursue genuine health care reform. There has much talk about repealing this legislation and saying doing nothing would be better. While that is true as Levin points out that this bill has moved our situation from bad to worse. That isn’t to say we should be content to stay at bad. People do want health care reform. It is needed. It is unfortunate that Republicans didn’t address this while they held Congress and the White House, if they did we could have possibly avoided this mess.
But it needs to be repealed, even if some of the establishment elite don’t agree, such as when David Frum wrote earlier last week lamenting that Republicans missed an opportunity to make a deal. He said, “when we went for all the marbles, we ended with none.” He said for us to have no illusions:
This bill will not be repealed. Even if Republicans scored a 1994 style landslide in November, how many votes could we muster to re-open the “doughnut hole” and charge seniors more for prescription drugs? How many votes to re-allow insurers to rescind policies when they discover a pre-existing condition? How many votes to banish 25 year olds from their parents’ insurance coverage? And even if the votes were there – would President Obama sign such a repeal?
We followed the most radical voices in the party and the movement, and they led us to abject and irreversible defeat.
There were leaders who knew better, who would have liked to deal. But they were trapped. Conservative talkers on Fox and talk radio had whipped the Republican voting base into such a frenzy that deal-making was rendered impossible. How do you negotiate with somebody who wants to murder your grandmother? Or – more exactly – with somebody whom your voters have been persuaded to believe wants to murder their grandmother?
Frum would like for us to forget that it was voices similar to his that led us to defeat in 2006 and 2008. And we are done. I find it amazing that he lays the blame at those who led this charge. They weren’t the ones who wrote the bill or vote on it without reading it. They weren’t the ones who get GOP leadership out of “informal negotiations.” Elections do have consequences which is why many of us who were against this health care reform bill knew that the chance of it not passing in some form or capacity was slim and none. Could you imagine what would have been in this if we didn’t speak out? If “death panels” weren’t discussed? I shudder to think.
Well Mr. Frum, Congressional votes have consequences as well. Will it get repealed in 2010? I don’t know. I think obviously it is far more likely to see it repealed in 2012. As far as voting on the things that he mentions – well that is why we have to replace this current health care legislation with something that will work to bring down health care costs.
Levin suggests to start with the problem that both conservatives and liberals alike agree on:
Conservative and liberal experts generally agree on the nature of the problem with American health care financing: There is a shortage of incentives for efficiency in our methods of paying for coverage and care, and therefore costs are rising much too quickly, leaving too many people unable to afford insurance. We have neither a fully public nor quite a private system of insurance, and three key federal policies—the fee-for-service structure of Medicare, the disjointed financing of Medicaid, and the open-ended tax exclusion for employer-provided insurance—drive spending and costs ever upward.
The disagreement about just how to fix that problem has tended to break down along a familiar dispute between left and right: whether economic efficiency is best achieved by the rational control of expert management or by the lawful chaos of open competition.
Unfortunately the current bill will do nothing but exasperate the cost problem.
It is designed to push people into a system that will not exist—a health care bridge to nowhere—and so will cause premiums to rise and encourage significant dislocation and then will initiate a program of subsidies whose only real answer to the mounting costs of coverage will be to pay them with public dollars and so increase them further. It aims to spend a trillion dollars on subsidies to large insurance companies and the expansion of Medicaid, to micromanage the insurance industry in ways likely only to raise premiums further, to cut Medicare benefits without using the money to shore up the program or reduce the deficit, and to raise taxes on employment, investment, and medical research.
Since this legislation rejected incrementalism, Levin notes, there is no way it can be improved in small steps. He said that it won’t be easy, and that the conservative health care agenda must now be an electoral agenda with the repeal of this bill being the center of the conservative case to voters in 2010 and 2012. He notes it must be an effort that “to refine, inform, and build on public opposition to the new program and to the broader trend toward larger and more intrusive, expensive, and fiscally reckless government in the age of Obama.”
He notes that the structure helps with most of the benefits won’t begin until 2014, and those that start now such as the preexisting condition exclusion applies to only the individual market, only prohibits only the refusal of treatment for a particular disease (doesn’t prohibit a family from coverage altogether) so it impacts few people. He also notes that many states already allow young adults to stay on their family’s plans ranging anywhere from 24-31 so that provision will have a small impact. He also notes that the checks for $250 to go out to seniors to cover the “donut hole” gap in Medicare prescription drug coverage this year won’t make up for what is coming:
The bill will also have the government send a $250 check to seniors who reach the “donut hole” gap in Medicare prescription drug coverage this year—and the checks will go out in September, just in time for the fall elections. But the checks will hardly make up for the significant cuts in Medicare Advantage plans that allow seniors to choose among private insurers for their coverage. Those cuts begin in 2011, but the millions of seniors who use the program will start learning about them this year—again, before the election—as insurance companies start notifying their beneficiaries of higher premiums or cancelled coverage.
He notes that businesses are already starting to talk about the impact of this legislation. Verizon said that they expected their health care costs to rise. Caterpillar said this will cost them $100 million. John Deere said they will take a $150 million hit after taxes. AT&T sees a $1 Billion healthcare related charge coming.
Levin says this will help opponents of the current health care legislation make their case, but they need to focus on the long-term implications of this legislation that will occur after the congressional election: “spending, taxes, rising health care costs, cuts in Medicare that don’t help save the program or reduce the deficit, and a growing government role in the management of the insurance sector.”
He makes the following case:
The numbers are gargantuan and grim—even as laid out by the Congressional Budget Office, which has to accept as fact all of the legislation’s dubious premises and promises. If the law remains in place, a new entitlement will begin in 2014 that will cost more than $2.4 trillion in its first 10 years, and will grow faster than either Medicare or private-sector health care spending has in the past decade.
Rather than reducing costs, Obamacare will increase national health expenditures by more than $200 billion, according to the Obama administration’s own HHS actuary. Premiums in the individual market will increase by more than 10 percent very quickly, and middle-class families in the new exchanges (where large numbers of Americans who now receive coverage through their employers will find themselves dumped) will be forced to choose from a very limited menu of government-approved plans, the cheapest of which, CBO estimates, will cost more than $12,000. Some Americans—those earning up to four times the federal poverty level—will get subsidies to help with some of that cost, but these subsidies will grow more slowly than the premiums, and those above the threshold will not receive them at all. Many middle-class families will quickly find themselves spending a quarter of their net income on health insurance, according to a calculation by Scott Gottlieb of the American Enterprise Institute.
Through the rules governing the exchanges and other mechanisms (including individual and employer insurance mandates, strict regulation of plan benefit packages, rating rules, and the like), the federal government will begin micromanaging the insurance sector in an effort to extend coverage and control costs. But even CBO’s assessment does not foresee a reduction in costs and therefore an easing of the fundamental source of our health care woes.
Taxes will have to be raised by about half a trillion dollars in the first 10 years to help pay for the subsidies, and then will also make cuts to Medicare of a half a trillion of dollars through reducing physician and hospital payment rates. He notes that is if all goes according to plan like the CBO has to assume.
Do you see these cuts to Medicare happening? I don’t, and Levin doesn’t think so either.
The Medicare cuts so essential to funding the new entitlement, for instance, are unlikely to occur. Congress has shown itself thoroughly unwilling to impose such cuts in the past, and if it fails to follow through on them in this case, Obamacare will add hundreds of billions of additional dollars to the deficit. By the 2012 election, we will have certainly begun to see whether the program’s proposed funding mechanism is a total sham, or is so unpopular as to make Obamacare toxic with seniors. Neither option bodes well for the program’s future.
He also cites other consequences that we are likely to see:
Some of the taxes envisioned in the plan, especially the so-called Cadillac tax on high-cost insurance, are also unlikely to materialize quite as proposed, adding further to the long-term costs of the program. And meanwhile, the bizarre incentive structures created by the law (resulting in part from the elimination of the public insurance plan which was to have been its focus) are likely to cause massive distortions in the insurance market that will further increase costs. The individual market will quickly collapse, since new regulations will put it at an immense disadvantage against the new exchanges. We are likely to see significant consolidation in the insurance sector, as smaller insurers go out of business and the larger ones become the equivalent of subsidized and highly regulated public utilities. And the fact that the exchanges will offer subsidies not available to workers with employer-based coverage will mean either that employers will be strongly inclined to stop offering insurance, or that Congress will be pressured to make subsidies available to employer-based coverage. In either case, the program’s costs will quickly balloon.
Ultimately it will be a disaster, Levin explains, and not only for our health care system. We will see this legislation impact our fiscal future and we can dismiss any notion of limited government.” But he said this is a disaster that won’t really get started for four more years. So we can avert it.
If 2010 elections are successful the work to begin dismantling and delaying the program can begin. But we will need to win in 2012 as Frum noted earlier that Obama is unlikely to sign a repeal and it is unlikely that we’d yet have the votes to override a veto.
I’ll say again that repealing the current health care legislation is not enough. Democrats love to paint Republicans right now as “the party of no.” But we need to show that we are willing to work toward real reform. If that is not done the stereotype that Democrats has assigned will be reinforced. We needed to be not just a no, but a “hell no,” but we also have to bring ideas to the table (which we have and offered, but was virtually ignored), and if this legislation is repealed not accept status quo. Americans do want real health care reform that truly addresses the cost of health care.
Levin provides an overview of those ideas:
Republicans this past year offered a variety of such approaches, which varied in their ambitions, costs, and forms. A group led by representatives Paul Ryan and Devin Nunes and senators Tom Coburn and Richard Burr proposed a broad measure that included reforms of Medicare, Medicaid, the employer-based coverage tax exclusion, and malpractice liability and would cover nearly all of the uninsured. The House Republican caucus backed a more modest first step to make high-risk pools available to those with preexisting conditions, enable insurance purchases across state lines, pursue tort reform, and encourage states to experiment with innovative insurance regulation. Former Bush administration official Jeffrey Anderson has offered an approach somewhere between the two, which pursues incremental reforms through a “small bill.” Other conservatives have offered numerous other proposals, including ways of allowing small businesses to pool together for coverage, the expansion of Health Savings Accounts and consumer-driven health care (which Obama-care would thoroughly gut), and various reforms of our entitlement system.
Repeal and replace is the strategy that Senate Minority Leader Mitch McConnell (R-KY) outlined responding to President Obama’s weekly address:
Repeal and then replace with real reform measures… if Republicans can focus on this and get specific tangible ideas out there – 2010 and 2012 look bright and we can avoid the negative consequences that are sure to follow Obamacare.