Commentary Magazine


Just a Notch on a Belt

Buried deep inside an angst-filled column complaining that Obama is underappreciated and overly criticized, Richard Cohen concedes what many on both the Right and Left suspect: “He wanted a health-care bill. Why? To cover the uncovered. Maybe. To rein in the insurance companies. Maybe. To lower costs. Maybe. What mattered most was getting a bill, any bill. This is not a cause. It’s a notch on a belt.” We suspect that is true in part because Obama never really told us what he wanted in the bill. He never sent a proposal to Congress. He didn’t spell out specific requirements for his plan in that game-changing (not) speech in September. Each time Congress moved ahead with one version or another, Obama praised the effort without much comment on the content. Some thought it was tactical. But maybe he never really cared what was in it.

That conclusion is reinforced by the bill’s content and timing. As for the content, it doesn’t do what the president in broadest strokes said he wanted to accomplish. James Capretta points out that this isn’t “universal” care:

The House and Senate bills would add 15 million or more people to [Medicaid’s] rolls without any guarantee whatsoever that there will be doctors and hospitals that can see them. Ironically, the very Democrats who most frequently tout “universality” as the goal are also the ones who ensure it will never actually come about by insisting that America’s lower-income families enroll in government-run insurance — with no other options. Beyond the Medicaid expansion, Obamacare is really an obligation, not a right. Every citizen would be required to sign up with a government-approved health-insurance plan or pay a tax penalty for going without coverage.

And even its proponents concede there will still be 23 million or so uninsured. Nor does the bill meet the president’s goals of deficit neutrality or cost cutting:

[T]he claim that bill lowers the deficit means that, in addition to cutting Medicare by half a trillion dollars, the Senate would also raise half a trillion in new taxes — during a recession. Only a series of accounting gimmicks — such as implementing benefits beginning in 2014 but raising taxes starting in 2010, and double-counting Medicare savings — allowed Senate majority leader Harry Reid to get a CBO cost estimate that pretends to add “not one dime” to the deficit. Medicare actuary Foster found that the Senate bill would bend the cost curve up, not down, and that the new taxes on drugs, devices, and health-insurance plans would increase prices and health-insurance costs for consumers.

But the telltale sign that Obama doesn’t really much care about the merits of the bill or any of the bill’s promised benefits is the timeline. The Heritage Foundation lays this out in detail:

2010: Physician Medicare payments decrease 21% effective March 1, 2010

2011: “Annual Fee” tax on health insurance, allocated according to share of total premiums. Begins at $2 billion in 2011, then increases to $4 billion in 2012, $7 billion in 2013, $9 billion in the years 2014, 2015, and 2016, and eventually $10 billion for 2017 and every year thereafter. Two insurers in Nebraska and one in Michigan are exempt from this tax.

2012: Medicare payment penalties for hospitals with the highest readmission rates for selected conditions.

2013: Medicare tax increased from 2.9% to 3.8% for incomes over $250,000 (joint filers) or $200,000 (all others). (This is stated as an increase of 0.9 percentage points, to only the employee’s share of the FICA tax.)

2014: Individual mandate begins: Tax penalties for not having insurance begin at $95 or 0.5% of income, whichever is higher, rising to $495 or 1% of income in 2015 and $750 or 2% of income thereafter (indexed for inflation after 2016). These penalties are per adult, half that amount per child, to a maximum of three times the per-adult amount per family. The penalty is capped at the national average premium for the “bronze” plan.

2015: Establishment of Independent Medicare Advisory Board (IMAB) to recommend cuts in Medicare benefits; these cuts will go into effect automatically unless Congress passes, and the President signs, an override bill.

2016: Individual mandate penalty rises to $750 per adult ($375 per child), maximum $2,250 per family, or 2% of family income, whichever is higher (capped at the national average premium for the “bronze” plan). After 2016, the penalty will be increased each year to adjust for inflation.

2017: Itemized deduction for out-of-pocket medical expenses is limited to expenses over 10% of AGI for those over age 65.

Bottom line: nothing but taxes and Medicare cuts begin before 2014. This is not a serious plan to address a health-care “crisis,” is it? No. It is an effort to throw something up against the wall and clean up the mess later. It won’t be proven “not to work” before Obama’s last election because it isn’t designed to really do anything, other than raise taxes, for the next four years. It is the ultimate placeholder that Obama can check off on his to-do list without the responsibility for actually solving the crisis he told us we had to fix urgently — before Christmas 2009.

It is hard, then, to quibble with Cohen. This isn’t a serious effort to reform health care. It’s lazy governance from a president who couldn’t face failure or craft a coherent bill. He and Democrats in the House and Senate imagine that the voters are too dumb to figure this out. We’ll test that proposition in November.

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