Healthcare Reform Thread II

[KrazyHorse]

Can anyone briefly summarize what's going on now?

The public option was killed to win Joe Lieberman's support, which means that the left now hates the Senate's version of healthcare reform as much as the right does. Obama is now trying to get to 60 votes and ram the bill through before the Christmas break and seems like he has an outside chance of accomplishing it.

Briefly, how many Americans are uninsured now? How many will be once the reforms pass? Will Americans still be going broke to pay medical bills (#1 reason for personal bankruptcy)?

I'm not sure anyone knows. The bill has changed several times in the last couple weeks and there hasn't been a CBO score of the current version yet.

I find this entire process a bit of an eye-opener to just how terrible US government is.

Nobody of any political ideology should support the hydra that's going to come out of this **** process.

[The Mad Monk]

If you like that, you're gonna love this...

Congress's Long-Term Care Bomb
Another new entitlement that will make future costs explode.

By SCOTT HARRINGTON

The public is growing wary of the cost of ObamaCare. Yet there is one budget-busting provision that hasn't received the attention it deserves: a new long-term care entitlement.

Known as the Community Living Assistance Services and Supports Act, or Class Act, this entitlement is in both the House and Senate bills and was a top priority of the late Sen. Ted Kennedy. It would provide at least $50 a day toward home or institutional care, equipment and supplies, or home improvements to assist the daily living of those who are enrolled. It is also a significant part of the reason that Democrats claim that ObamaCare is fiscally responsible, but this turns out to be a short-term budget ruse.

The Congressional Budget Office (CBO) projects that the House and Senate health-care bills will reduce federal deficits over the next 10 years by $138 billion and $130 billion, respectively. The lion's share of the savings, $101.6 billion and $72.5 billion, would be realized by the long-term care program.

How can a new entitlement reduce deficits? With budget accounting, the program will pile up more revenues than its costs. But only in the short run. In the long run, it will blow a hole in the federal budget.

Private long-term care insurance works like other insurance policies. Those who buy policies pay premiums over a prolonged period of time. The premiums pay for the benefits they may eventually receive and cover the benefits for those who need immediate care.

To make sure that a premium paid today can pay for a benefit promised for tomorrow, an insurer determines the amount it will need for future benefits, marks that amount as a liability, and puts aside funds to pay for it. An insurer also creates an additional pool of capital to act as a buffer, just in case.

That isn't how the Class Act would work. The House and Senate bills stipulate that premiums would be calculated to cover benefit payments over a 75-year horizon without federal subsidies. And the bills do authorize the secretary of Health and Human Services to adjust premiums and benefits to maintain solvency. But CBO and the Centers for Medicare & Medicaid Services (CMS) have identified parts of the program that will subject it to considerable financial risk.

First, those who enroll would likely be more apt to need care and will be more expensive to cover than those who buy private insurance. To cover its costs, the program would have to charge more than private insurers.

On Friday, CMS Chief Actuary Richard Foster said in a memo on the (less costly) Senate version of the program that premiums would be set so high they would discourage healthier people from buying in. As the healthy stayed on the sidelines, the program would have to charge more to those who did enroll. This in turn would price more people out of the program, risking what the memo called an "insurance death spiral."

Mr. Foster does project the program will lower the federal deficit in its first decade (by $39 billion and $38 billion for the House and Senate bills respectively, much less than the CBO estimates). But neither CMS nor the CBO include in their 10-year projections the program's future liabilities. Of course, that's exactly when the government will have to make good on its promises, putting pressure on the federal budget. Why? Because unlike private insurance, the program won't invest its early surpluses.

Instead the program will hand over its revenues to the feds, who will promptly spend it. In return, the program's administrators would receive federal IOUs, just as Medicare and Social Security do. But these are nothing more than liabilities that have to be repaid, either by taxes or borrowing.

Under the House bill, CBO projects that the entitlement would bring in $123 billion in premiums from 2010-2019 and pay out only $20 billion in benefits. CBO also projects that the Senate's version would generate $88 billion in premiums and $14 billion in benefits.

But in a letter late last month to Sen. Tom Harkin, CBO Director Douglas Elmendorf explained that while the Class Act would likely reduce federal budget deficits during 2020-2029, it would do so "by smaller amounts than in the initial decade."

By the third decade, CBO says the program would pay more in benefits than it received in premiums and what it saved Medicaid (which currently pays for long-term care for millions of elderly). Mr. Elmendorf concludes that "the programs would add to budget deficits in the third decade—and in succeeding decades—by amounts on the order of tens of billions of dollars for each 10-year period." These long-term demands on the Treasury would coincide with shortfalls in Medicare and Social Security projected to be in the hundreds of billions of dollars.

Sen. Kennedy notwithstanding, it is hard not to conclude that a major motivation for the Class Act is to make ObamaCare look fiscally better over CBO's official 10-year budget horizon. Without the new long-term care program, CBO's projected deficit reductions for the House and Senate bills would be $36 billion and $58 billion, respectively, rather than $138 billion and $130 billion. This makes the overall Democratic reform look fiscally more responsible than it really is. The real danger comes after 10 years, when the long-term care program will increase deficits and create even greater pressure for government rationing of medical care.

Mr. Harrington is professor of health-care management and insurance and risk management at the University of Pennsylvania's Wharton School and an adjunct scholar at the American Enterprise Institute.

http://online.wsj.com/article/SB10001424052748703499404574562240508080098.html

[Drake Tungsten]

I find this entire process a bit of an eye-opener to just how terrible US government is.

I was already aware of it.

Nobody of any political ideology should support the hydra that's going to come out of this **** process.

Agreed.

[Drake Tungsten]

More opposition from the left. We may just kill this POS bill yet...

Labor Holds Emergency Meetings To Discuss Senate Bill, May Formally Oppose

Two of the country's largest labor groups, the SEIU and the AFL-CIO, are each holding emergency executive meetings today to discuss whether they should support the latest round of health care compromises made by Senate Democrats.

Though there's no official word yet, early indications based on talks with various officials are that the groups will either formally oppose the legislation or, less dramatically, just not fight very hard to ensure its passage.

Labor leaders are fuming at the concessions that Democratic leadership made in the last few days to win the support of the caucus's most conservative members, notably Sen. Joseph Lieberman (I-Conn.). A bill that already included one highly objectionable provision (a tax on so-called Cadillac insurance plans) was stripped of a provision beloved by labor: a public alternative to private insurance coverage. Frustration boiled over even further after the leadership succumbed to Lieberman's demand to jettison even the compromise to the public option -- a proposal to expand Medicare to those as young as 55.

http://www.huffingtonpost.com/2009/12/16/labor-holds-emergency-mee_n_394070.html

[Wezil]

I'm not sure anyone knows. The bill has changed several times in the last couple weeks and there hasn't been a CBO score of the current version yet.

The most recent numbers I heard (sorry can't remember the site) was 36M currently not covered and this bill will cover 31M of them.

[Kidlicious]

Insurance industry plan + single payer =

[Arrian]

Our government is dysfunctional. This I knew. I had been unaware of just HOW dysfunctional, however.

Cluster****.

-Arrian

[Drake Tungsten]

To be fair, healthcare reform is one of those issues where the two best solutions are on the far-left and far-right, respectively. Our system is designed to create compromise, which is good in most cases but disastrous when trying to fix our healthcare system.

[Lorizael]

To be fair, healthcare reform is one of those issues where the two best solutions are on the far-left and far-right, respectively. Our system is designed to create compromise, which is good in most cases but disastrous when trying to fix our healthcare system.

The solution is to stumble in the right direction so slowly that no one notices once you've actually gotten there. Trying to make historic, sweeping changes is just going rile up the opposition. If we need to get to the far left or the far right (my preference is for the far left), then we need to make people comfortable with those ideas is a non-threatening and hostile way so that by the time we're there, at the far left or far right, it's just a harmless incremental change that's needed.

[Drake Tungsten]

If you try to incrementally work your way toward single-payer (the far-left solution), the country will go bankrupt before you get there. Working incrementally toward catastrophic health insurance, HSAs and a high percentage of out-of-pocket costs (the far-right solution) is fiscally responsible, but so subject to demagoguery as to be a non-starter.

[Jon Miller]

To be fair, healthcare reform is one of those issues where the two best solutions are on the far-left and far-right, respectively. Our system is designed to create compromise, which is good in most cases but disastrous when trying to fix our healthcare system.

I agree.

JM

[Drake Tungsten]

MoveOn opposes Senate bill

Progressive standard bearer MoveOn is opposing the Senate bill and asking its millions of members to sign a petition calling on liberal Sens. Bernie Sanders, Roland Burris, and Russ Feingold to block the bill's passage until it can be strengthened.

http://www.politico.com/livepulse/1209/MoveOn_opposes_Senate_bill.html

[Guynemer]

Frankly, everyone should be opposing this bill.

I'm all for universal health care. This bill is a steaming pile of **** that does absolutely nothing to get us to universal health care, or to control the escalating costs.

[SlowwHand]

Nope.

[Drake Tungsten]

Nelson sold out...

Sen. Ben Nelson (Neb.), the final Democratic holdout on health care, was prepared to announce to his caucus Saturday morning that he would support the Senate reform bill, clearing the way for final passage by Christmas.

"We're there," said Sen. Kent Conrad (D-N.D.), as he headed into a special meeting to announce the deal.

Democratic leaders spent days trying to hammer out a deal with Nelson, and worked late Friday night with Nelson on abortion coverage language that had proved the major stumbling block. But Nelson also secured other favors for his home state.

Asked if he was prepared to support the bill, Nelson said, "Yeah."

http://www.washingtonpost.com/wp-dyn/content/article/2009/12/19/AR2009121900797_pf.html