History or Travesty, Health Care Reform Becoming a Reality

Whenever politicians start bandying about the word "historic" to describe something they've just done, grab your wallet and lock up the silver. Chances are, the only thing "historic" they've accomplished is in coming up with a more unique and inefficient way to separate the taxpayer's hard-earned coin from his person.

In the case of health care reform, there is other history to be made: the unprecedented thrust of the federal government into the most intimate and private parts of the American citizen's personal life. The Democrats are about to make your health the government's business, while controlling directly or indirectly a gargantuan bite of the economy.

We are told that this is necessary for the good of all, that this is the only way to insure the millions who are without coverage -- whether they want it or not. Government altruism with a gun to one's head might seem a bizarre notion of liberty to some, but we are assured that this is part of the new America being created for our benefit.

How we got to this point is a tale told by an idiot. So I will turn this narrative over to Nebraska Senator Ben Nelson:

"I know this is hard for some of my colleagues to accept and I appreciate their right to disagree," Nelson told reporters at the Capitol, of the many changes made at his behest. "But I would not have voted for this bill without these provisions."

Which provisions are those, Senator Nelson?

Under the new abortion provisions, states can opt out of allowing plans to cover abortion in the new insurance exchanges the bill would set up, to serve individuals who lack coverage through their jobs. Plus, enrollees in plans that do cover abortion procedures would pay for the coverage with separate checks -- one for abortion, one for the rest of any health-care services.

Nelson secured full federal funding for his state to expand Medicaid coverage to all individuals below 133 percent of the federal poverty level. Other states must pay a small portion of the additional cost. He won concessions for qualifying nonprofit insurers and for Medigap providers from a new insurance tax, and was able to roll back cuts to health savings accounts.

It's easy to achieve health care reform when you're bribing members with other people's money.

Two other senators got Medicaid deals of their own. Bernie Sanders, the socialist from Vermont, was bought off with some additional state aid for Medicaid, as was Louisiana's Mary Landrieu.

As of this writing, the "manager's amendment" -- 386 pages in addition to the more than 2,000 already part of the package -- is still being digested by wonks on both sides, so there is the possibility that there are some surprises beyond what we've already discovered. Basically, revenue will be raised to fund the scheme by hiking payroll taxes on those they consider "rich," as well as a variety of smaller hits including a weird 10% tax to be paid by customers of indoor tanning salons. Why stick it to tanning customers? Perhaps the pasty-faced Democrats are jealous of people walking around with tans in the middle of winter.

Also increased in the manager's amendment is the tax paid by those who refuse to acquire insurance. You will now be forced to shell out $750 or no more than 2% of your income if you refuse to participate in this vanguard program for the new America.

There is some assistance for really small businesses in the form of tax credits, but the effect on business creation and expansion for this vital jobs engine will be a net negative. It is hard to see a burst of entrepreneurial energy that would jump-start the economy when employee costs will increase substantially.

The Congressional Budget Office has got the Democrats excited over their "scoring" of the manager's amendment because they report it actually lowers the deficit some:

The CBO said that the final legislation, unveiled Saturday by Senate Majority Leader Harry Reid, would cost $871 billion over the next 10 years and reduce the deficit by $132 billion over the same period. That's more than the first Senate bill had cost.

Roughly 31 million people would receive new coverage under the legislation.

The final Senate bill will cost more than the 2,074-page bill first unveiled by Reid last month. The Congressional Budget Office (CBO) said that bill would cost $848 billion over 10 years.

That's not too bad, is it? It wouldn't be except the Democrats are using smoke and mirrors to make the bill appear better than it is. Writes the Heritage Foundation's James Capretta at the NRO's Critical Condition blog:

For starters, as CBO notes, the bill presumes that Medicare fees for physician services will get cut by more than 20 percent in 2011, and then stay at the reduced level indefinitely. There is strong bipartisan opposition to such cuts. Fixing that problem alone will cost more than $200 billion over a decade, pushing the Reid plan from the black and into a deep red.

Then there are the numerous budget gimmicks and implausible spending reductions. The plan’s taxes and spending cuts kick in right away, while the entitlement expansion doesn’t start in earnest until 2014, and even then the real spending doesn’t begin until 2015. According to CBO, from 2010 to 2014, the bill would cut the federal budget deficit by $124 billion. From that point on, it’s essentially deficit neutral — but that’s only because of unrealistic assumptions about tax and Medicare savings provisions. By 2019, the entitlement expansions to cover more people with insurance will cost nearly $200 billion per year, and grow every year thereafter at a rate of 8 percent. CBO says that, on paper, the tax increases and Medicare cuts will more than keep up, but, in reality, they won’t. The so-called tax on high cost insurance plans applies to policies with premiums exceeding certain thresholds (for instance, $23,000 for family coverage). But those thresholds would be indexed at rates that are less than health-care inflation — forever. And so, over time, more and more plans, and their enrollees, would bump up against it until virtually the entire U.S. population is enrolled in insurance that is considered “high cost.”

Nice trick if you can pull it off, and the Democrats are prepared to do it.

The reaction of many liberal Democrats is a lot of grumbling over the strictures on abortion and a lack of a "robust" public option. But they are making no bones about the idea that once health care reform is a reality, they are going to start tinkering with it almost immediately in order to get it "just right."

It seems a fait accompli that the House-Senate conference to hash out the remaining issues will be difficult but doable now that Majority Leader Reid and Speaker Pelosi have shown that they are willing to use as much taxpayer money as it will take to bribe, cajole, and sweeten the pot for individual members. The momentum for passage appears irreversible and it seems likely that sometime before the president's State of the Union message, he will have his "Pyrrhic victory."

Bill Kristol:

[N]ever before has so unpopular a piece of major legislation been jammed through on a party-line vote. This week, Rasmussen showed 57% of voters nationwide saying that it would be better to pass no health care reform bill this year instead of passing the plan currently being considered by Congress, with only 34% favoring passing that bill. 54% of Americans now believe they will be worse off if reform passes, while just 25% believe they'll be better off. Making the 2010 elections a referendum on health care should work--if Republicans don't let up in the debate over the next year.

Those numbers won't change anytime soon. But since most of the big changes are years away, it is likely that the health care issue will fade into the background and some other "historic" piece of legislation will come to the fore.

History or travesty, it won't matter. It's all about change. As for the companion to change in the Obama mantra, we might take heed of the sign over hell in Dante's Divine Comedy when thinking of the doors to the Capitol:

"All hope abandon ye who enter here."