Benemax

Yesterday (July 29) was quite a day! First, we heard that 52 Conservative House Democrats (The Blue Dogs) had caved-in and endorsed an only slightly modfied version of the Democratic Leasdership’s original plan.

But then we learned that only some of the Blue Dogs had signed-off on the deal and that it was subject to reconsideration based on the details of final bill.

At the same time, the 80 member Progressive Caucus (left-of-center Democrats) threatened to vote against the final bill if it includes elements of the Blue Dogs’ deal.

“There’s no way we’re voting for a bill when it’s got this stuff in it,” said Rep. Lynn Woolsey (D) of California.

And lastly, House Minority Leader, John Boehner,  said “It is time to scrap the proposal that they have on the table and hit the reset button … and then find a way to work together to do real healthcare reform that lowers cost and increases access for the American people. Those are the two issues that people want resolved and we can do that … within the current system. We don’t need to blow it up and start over.”

Conclusion: the more things change, the more things stay the same?

As prospects for the President’s version of Health Care Reform start to dim, it’s time to begin thinking about the next big question: “What should we do instead?” The following is an excerpt form a Wall Street Journal editorial that appeared shortly after the President’s unsuccessful press conference:

“For all the political fuss, the primary Democratic goal of covering the uninsured is not some insurmountable problem. About 25% or so are probably already eligible for public programs like Medicaid but haven’t enrolled. Another quarter fall in the top half of the income distribution and are either between jobs or could afford to buy coverage on their own. Those facing genuine hardships number far fewer than the 47 million figure tossed about, and the easiest way to help this group is to provide some kind of credit to those who buy private insurance outside the workplace.”

The following are excerpts from a column by Grace-Marie Turner that appeared in today’s New York Post (July 23, 2009):

President Obama seems to believe he can talk his way past the reality of how his sweeping health-reform plan would affect the lives of 300 million Americans…

(But) the facts just aren’t lining up with the rhetoric. A few examples:

Rhetoric: The president insisted in his news conference last night that “the bill I sign must also slow the growth of health-care costs in the long run.”
Reality: Senate Budget Committee Chairman Kent Conrad asked the man who is the top authority on the subject — Congressional Budget Office Director Douglas Elmendorf — if the bills before Congress would “bend the long-term cost curve” in health care.
“No, Mr. Chairman,” Elmendorf said, adding, “the legislation significantly expands” health costs.

Rhetoric: Obama said last night his plan “will keep government out of health-care decisions, giving you the option to keep your insurance if you’re happy with it.”
Reality: The Lewin Group, a respected economics-consulting firm, estimates in a new study for The Heritage Foundation that more than 80 million people would lose the coverage they have today if the Obama plan is implemented.

Rhetoric: President Obama has traveled the country extolling the virtues of the Mayo Clinic and other integrated health systems, saying they offer “the highest quality care at costs well below the national norm” and should be a model for the nation.
Reality: The Mayo Clinic and 12 other top health-care-delivery outlets just sent Congress a letter, warning that the bill that already has passed two committees in the House would put them out of business.
If the government creates its own health-insurance plan paying at Medicare rates, as the administration and Congress propose, the organizations say the result will be “unsustainable for even the nation’s most efficient, high-quality providers, eventually driving them out of the market.”

In the House, the battle for the future of health care in the U.S. has moved to the Energy and Commerce Committee where “Blue Dog” Democrats say they have enough votes to kill the bill in committee if changes aren’t made. And on issues where this committee lacks jurisdiction, such as taxes, Blue Dogs have warned that there are enough votes to kill the bill on the House floor as well.

Meanwhile, over in the Senate, negotiations have broken off in the Finance Committee and there is no indication when they will be resumed.

And on Friday, six centrist senators wrote Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) asking that the President’s August 7 deadline for passage of a bill be abandoned.

“While we are committed to providing relief for American families as quickly as possible, we believe taking additional time to achieve a bipartisan result is critical,” wrote Sens. Ben Nelson (D-Neb.), Joe Lieberman (I-Conn.), Mary Landrieu (D-La.), Ron Wyden (D-Ore.), Susan Collins (R-Maine) and Olympia Snowe (R-Maine).

The battle could not be tighter with the result hinging on just an handful of votes in both chambers. Meanwhile, yet another poll (Reuters) now shows less than 50% of Americans supporting the President’s plan.

While the Health Care Reform bills reported out of committees in both the House and the Senate will do nothing to reduce the cost of health care (per CBO, see previous post), the evil private sector is embarking on a project that could revolutionize health care (and health care economics) in the U.S. (see below). Good thing we’re about to rid the health care system of this sort of innovation, huh?

UnitedHealth Group and Cisco are partnering to build the first national telehealth network, which will give patients access to physicians and specialists when in-person visits are not possible. The new “Connected Care” program combines audio and video technology and health resources to greatly expand physicians’ reach into rural, urban and other underserved areas. UnitedHealth Group has committed tens of millions of dollars toward the new initiative.

UnitedHealth Group’s national care provider network, including 590,000 physicians and care professionals and more than 4,900 hospitals, combined with Cisco’s industry-leading video conferencing and other collaborative network technologies, will help connect patients more easily with primary care physicians, specialists and hospitals. Connected Care will make clinics available in the workplace, as well as in rural and retail locations. In-home visits using similar technology will also be introduced to truly bring care to the patient.

The head of the Congressional Budget Office told Kent Conrad’s Senate Budget Committee yesterday that the bills currently before Congress would worsen the federal government’s “already bleak budget outlook,” increase the deficit, and drive the nation more deeply into debt.
But worse still, he said the bills won’t meet the president’s promise of reducing health costs over the long term.
“I’m going to really put you on the spot,” Chairman Conrad told CBO Director Elmendorf. “From what you have seen from the products of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?”
Elmendorf responded: “No, Mr. Chairman,” adding, “the legislation significantly expands” costs.
President Obama has repeatedly said that his health reform bills must bend the cost curve. Elmendorf made it clear that the proposals advanced so far would not meet that goal, noting, “The curve is being raised.”

The first bill reported out of committee in the House of Representatives is WORSE than expected:

“Essential Coverage”, the lowest level of coverage that will be permitted under the new guidelines, is defined as coverage that:

(1) Limits out-of-pocket exposure to $5,000 per person, $10,000 per family;
(2) Is actuarially equivalent to the average employer sponsored plan in force today; AND
(3) Has an actuarial value equal to at least 70% of a 100% benefit plan.

That’s right: a plan must meet ALL THREE TESTS to qualify.

These rules are disasterous for employers encouraging consumerism and using creative techniques to finance their employees’ coverage. Essentially, today’s average plan will become tomorrow’s lowest level plan. And this from a bill that is supposed to reduce health care spending! This one provision alone will hike average employer health benefit cost at least 12.5% and possibly as much as 33%!

Today, employers routinely purchase High Deductible Plans with actuarial values as low as 40% of the value of a 100% benefit plan. Most of those employers then add back additional benefits in the form of a secondary benefit plan (often self-funded), equity accounts for employees or financial incentives designed to encourage fitness, healthy lifestyles, etc… These approaches are working…and they should be incorporated into any serious Health Reform Plan…but apparently not in the House of Representatives.

Here’s a schematic diagram of the new health care bureaucracy proposed by House Democats in their reform bill click on this link Study this; they’ll be a quiz tomorrow.

For the first time, more Americans oppose President Obama’s Health Care Reform proposals than support them. 49% now say they oppose the plan while 46% favor it. The “ayes” have dropped 4 percentage points in just one week.

But that’s not all. 38% strongly oppose the plan while only 22% strongly favor it. In other words 75% of those who oppose the President’s plan strongly oppose it while less than half the people who favor the plan favor it strongly.

If these trends continue, more and more Democrats in Congress, especially in the House, may abandon their support for Health Care Reform. For “conservative” Democrats representing “swing” districts, a vote for this plan could be political suicide.

In the 1994 Congressional Elections, voters rebelled against the Clintons’ Health Care Reform plan and voted in a Republican Congress for the first time in 40 years. Could the voters be preparing a similar surprise for President Obama in 2010?

New Polling (Rasmussen) shows Republicans leading Democrats 40% to 37% in mock Congressional races. More importantly, this is the lowest level of support for Democrats in 2 years.

Underlying this is the fact that voters now trust Republicans over Democrats on 8 out of 10 key issues. And on the crucial issue of taxation, Americans prefer Republicans by whopping margin: 52% to 36%.