Senate Health Care Debate Gets Good News/Bad News from the CBO

"In the greatest country on Earth, no American should die simply because they don't have health insurance. We have a historic opportunity to enact meaningful health care reform that will work to stabilize the economy, provide quality for millions of Americans," stated Sen. Max Baucus (D-Mont.) on the Senate floor Monday (http://prescriptions.blogs.nytimes.com/2009/11/30/senate-debate-begins-with-baitsmanship/). While one is hard pressed to locate a single America that does not feel reform is needed to control escalating insurance premiums and cost of health care. The trouble is that Congress is off the mark with either bill being discussed. The central tenet of the House bill is a public option while the Senate version has one with an opt-out clause. For the majority of the year thus far, Congress members have touted their take and pimped their vote all under the guise of health care reform.

I still, as of this post, not heard one signal argument that unequivocally demonstrates how adding only one option to the pool of options for health care is going to drive down costs and premiums so all can afford health care. In order for reform to have the desired affects – affordable choices and lower costs – Congress needs to scrap the public option and replace it with legislation that will open state borders for the purchase of health care insurance and remove the anti-trust exemption that health insurance companies currently enjoy. Open up competition will lead to lower premiums. The Congressional Budget Office(CBO) estimates that in the best-case scenario that premiums would go down for most Americans by 2016 due to government subsidies while a worst-case scenario results in a little more than 10 percent of policyholders will experience a decrease even after the subsidies. In fact the CBO estimates that, under the worst-case scenario, the majority of Americans will see no effect or an increase up to 13 percent. The assessment can be seen at http://www.cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf.

Again, why are we allowing Congress to pass a bill that does not achieve the goals in all scenarios? Why not allow market forces to work through increase competition? Some may argue that free market forces are not enough. To that I agree slightly. To assist free market forces the government will need to repeal the anti-trust exemption. Let's demand true reform from Congress. If the CBO is correct and the best-case scenario does take place, we will be looking at higher taxes in order to fund government rule health care. It is the greatest Ponzi scheme every done if we allow our Congress to pass "reform" in its present state. Neither bill will start for at least three years after passage. In the meantime our "reform" does nothing but collect taxes; taxes that will have to be raised to cover the costs.

That being said, it is time for Congress to pass true reform that takes effect immediately and does not raise our taxes. As Jonathan Gruber, an economist at the Massachusetts Institute of Technology, states" This is not delivering huge premiums savings to the insured. But the flip side is that here's a bill that reduces the deficit, covers 30 million people and has the promise of lowering premiums in the long run" (http://www.washingtonpost.com/wp-dyn/content/article/2009/11/30/AR2009113004391_2.html?hpid=topnews). I don't know about the rest of you but Government said that Social Security was going to be there for me when I retire and we all know that it will be insolvent in the near future. If the bill does nothing but establish more government in our lives then why are we sitting idly by and allow Congress to pass "reform" that reforms nothing and will raise our taxes?

Public Option fails twice

The Senate Finance Committee heard two different amendments yesterday that both called for a public option. Sen. Rockefeller's amendment fell failed to win majority support with Sen. Baucus (D-MT), Sen. Conrad (D-ND), Sen. Nelson (D-FL), Den. Carper (D-DE), and Sen. Lincoln (D-AR) joining the Republicans on the committee in voting 15 to 8 to reject the amendment. The other public option bill was offered by Sen. Schumer (D-NY) that was also rejected, 13 to 10, with Sen. Baucus (D-MT), Sen. Conrad (D-ND), and Sen. Lincoln (D-AR) joining Republicans in opposition. The main difference between the two proposed amendments was Sen. Rockefeller's bill set rates for the first two years at Medicare rates and then negotiated them afterwards where Sen. Schumer's amendment established rates by negotiating right away with doctors and hospitals.

During the debate on both bills the Democrats seeking a public option raised the point of competition and believes that a public option is the only method to ensure "fair" competition. The trouble I see with this logic is the government cannot establish a "fair" playing field if they are player and regulator. Sen. Grassley (R-IA) concurs with, "Government is not a fair competitor. It's a predator." Naturally the premiums of a public option will be less due to the lack of overhead but the missing element is funding. With low cost, premiums, option to people and businesses, we will see more opt for such an option thus increasing the amount of funding required to sustain. The new required funds will either come from higher taxes or premiums. Either way it will not be good for Americans and ultimately not achieve the goal of driving down health care costs.

If Democrats are serious about competition, I hate to sound like a broken record, then all for interstate health care insurance programs to exist. As I said yesterday, during the debate the Democrats referenced a chart that displayed the monopoly and oligopoly that many insurers experience in the vast majority, over 70%, of the states. So, to eliminate the monopolies and oligopolies currently instituted is best accomplished by opening up competition between states. Adding just one more option, public option or CO-OP, will not achieve the necessary additional competitive forces required to drive down premiums. Why does Econ 101 come into the minds of Congress? Perhaps it is because the vast majority of them are lawyers and have not worked in the private sector.

Sen. Rockefeller frustration boiled over, during the conversation with his amendment, when he pleaded that, "the public option will be optional. It will be voluntary. It will be affordable to people who are now helpless before their insurance companies." The trouble Sen. Rockefeller is that it will not be optional in the long run as companies will discover it is cheaper to kick in the penalty than to offer insurance benefits. Plus, a mandate that stipulates that all citizens of the United States must have health insurance eliminates the voluntary aspect of any option let alone the public option.

Although Sen. Baucus voted against both amendments he did say, "There's a lot to like about a public option." I do not see anything to like about the public option. The public option will only grow the size of government and enable lazy Americans that feel government is the answer. In addition, the public option will not breed competition which I have clearly stated above. Why do we, as Americans, continue to allow such an argument to be made? Someone please show me how adding a public option increases competition!!!!!! If no one can, please join me in requesting all in the debate on health care to remove this argument that a public option will increase competition.

Sen. Bunning’s Transparency Amendment a delay tactic?

I have been watching the Senate Finance Committee meetings over the past few days and it has been very entertaining. Sen. Baucus is getting his time in the spotlight and is making the most of it. Much of the amendment voting has gone along party lines. Sen. Jim Bunning (R-NY) issued an amendment on Wednesday that would have required that a final and complete cost analysis be completed by the Congressional Budget Office (CBO). In addition to making the CBO analysis public the amendment would require the Senate Finance Committee to post the final bill for 72 hours prior to voting on it. Sen. Bunning defended his amendment by saying, "This bill will affect every American and I think it is our duty to provide full disclosure of all the facts. I don't see anything wrong with the committee taking a few extra weeks to ensure we get this right and so that all members of Congress and the public are given the opportunity to read the language and know what the true cost is."

Sen. Bunning's amendment makes sense. A similar bill was offered in the House that would have required members of the House of Representatives to wait 72 hours to ensure everyone had an opportunity to read any bill prior to passage. Why are Democrats in such a hurry to pass legislation that will have far reaching affects? Everyone agrees that health care reform is needed and as the president has said, 80% of the reform is agreed upon it is just the final 20% that is in question. While President Obama has championed transparency then why the Senate Finance Committee, and the rest of Congress doesn't, not adopt a 72 hour "reading" period prior to passing any legislation.

In respect to the Bunning amendment, Sen. John Kerry (D-Ma) claimed the amendment, "fundamentally a delay tactic". Where is this delay tactic? If the bill is complete and ready for vote, why not allow the CBO to score the bill and allow the public to see the bill? In order for the CBO to properly score any bill they require full legislative language to be completed. Sen. Snowe (R-Me), the only real hope on the Finance Committee for bipartisan action, was visibly frustrated during the debate of the Bunning amendment. "I don't understand the resistance," said Sen. Snowe. She went on to question, "What is the rush? Is there something happening in two weeks that we cannot wait?"

Sen. Baucus rush is to get a bill to the floor of the Senate before October 15^th when Senate Majority Leader Harry Reed (D-Nv) warned that reconciliation will be considered if major progress has not be made. If Sen. Reed is serious in using a procedural move, meant for budget issues, to complete passage of health care reform, that is the rush or the "happening" that Sen. Snowe is inquiring about. It is time for Congress to put aside partisan politics and procedural moves and enact true reform that includes choice, drives down cost, and includes tort reform. Unfortunately none of the bills being discussed does all of this.

Humana Gag Order: Abuse of Power or Warranted?

Humana is under investigation for sending out communication to their Medicare Advantage clients. The Huffington Post obtained a copy of the Humana mailing and can be viewed here: http://big.assets.huffingtonpost.com/humanamailer.pdf. I read the mailing sent by Humana and found nothing outlandish or misrepresentative of the reform being discussed on Capitol Hill but I suggest everyone to read the mailing to judge for themselves. The mailing does warn that "Some in Washington want to cut billions of dollars out of the Medicare Advantage program" and outlines changes that Humana will be forced to make if the cuts take place. Sen. Baucus took exception to Humana's mailer to their clients. "It is wholly inappropriate for insurance companies to mislead seniors regarding any subject – particularly on a subject as important to them, and to the nation, as health-care reform. The health-care reform bill we released last week strengthens Medicare and does not cut benefits covered under the Medicare program – and seniors need to know that," stated Sen. Baucus.

While I agree with Sen. Baucus that no company ought to mislead the public, did Sen. Baucus forget what was written in his bill? The bill calls for $123B in cuts to Medicare Advantage over the next ten years. Instead of recalling this fact Sen. Baucus complained to the Centers for Medicare and Medicaid Services (CMS). The CMS in turn ordered Humana on last Friday to cease and desist because their mailer was "misleading and confusing". Again, I suggest everyone to read it. The kicker is that Humana, and others, have supported ObamaCare with the exception of Advantage cuts and the public option (Wall Street Journal). So, why the gag order Sen. Baucus?

Americans see the warning here? The complaint by Sen. Baucus is a prime example why Government cannot be a participant and referee in any industry. Filing the complaint to the CMS is an abuse of power and a blatant attempt to restrict the communication of what is going on in Congress. The America's Health Insurance Plans, an industry trade group, expressed their outrage to the gag order by saying that proposed cuts "will have a devastating impact on the health security of the more than 10 million seniors enrolled in the program. If these cuts are enacted, seniors will face premium increases, reduced benefits, and, in some parts of the country, will lose access to their Medicare Advantage plan altogether" (www.npr.org). Again, why is the Obama Administration allowing a gag order on information being sent out to those that are impacted?

The Medicare Advantage program receives additional reimbursement rate which cost taxpayers an additional 14% per enrollee (www.courier-journal.com). Now if Sen. Baucus cuts ($123B) or President Obama cuts ($177B) to Medicare Advantage rates takes place the logic step of those provided the insurance option will need to cut back benefits in order to maintain margin expectations. All Humana, as I can tell from reading the mailer, is guilty of is warning their clients of how changes in reimbursement rates will affect their coverage. If Sen. Baucus or President Obama has trouble with that then offer an explanation on how Humana is incorrect in their assessment. Do not sick the CMS on them or others in the insurance industry to place a gag order on them. It is their right to communicate to their clients.

Don't take my assessment as gospel; rather read the mailer (link above) and determine for yourself if Humana violated any laws as to stating any misleading or confusing information. After you read it and make your own assessment call your Senators and Representative to voice your opinion. I wonder how long the CMS will take to determine if laws were violated.