Weekly Newsletter: August 3, 2009
“See You in September…”
The House adjourned for its August recess last Friday without having begun floor consideration of Democrats’ health “reform” legislation, and the Senate is expected to act in similar fashion later this week. While the Energy and Commerce Committee gave its approval to an amended bill (H.R. 3200), the Senate Finance Committee announced it would not be considering legislation before September. That month could also see floor action in the House, as Democrat leaders work to integrate the three versions approved by the various committees.
However, many Members may advocate a different approach—one that scraps Democrats’ government takeover of health care as currently constructed and instead focuses on common-sense solutions that will reduce the growth of health care costs and make access to quality care more affordable. Many positive solutions to health care—such as reasonable limits on medical liability suits to reduce defensive medicine practices, and greater incentives for healthy behaviors—require neither the $1.6 trillion in new federal spending nor the $820 billion in job-killing tax increases included in the House bill. Most importantly, such incremental solutions would not involve creating a government-run health plan that could cause as many as 114 million Americans to lose their current coverage, and up to 5.5 million Americans to lose their jobs.
Senator McCain Criticizes “Fannie Med”
Speaking in an interview with CNN that aired Sunday, Arizona Senator John McCain criticized one of the main proposals being mooted as a potential “compromise” surrounding a government-run health plan—government-charted health insurance co-operatives. When asked whether he has found a solution he could support, McCain’s response was clear:
I’ve not seen one. The co-ops remind us all of Fannie Mae and Freddie Mac. So I’ve not seen a public option that in my view meets the test of what would really not eventually lead to a government takeover [of health care].
Given recent press reports indicating that discussions in the Senate would spend $6 billion in federal taxpayer subsidies—more than the annual revenues of all but 20 of the nation’s health insurers—in order to create a new health plan that would be the nation’s third-largest insurer, many Members may agree with Senator McCain in asking whether the co-op will function as a truly independent entity, or whether the co-op could do for health care what Fannie Mae and Freddie Mac did for the housing market—dominate the marketplace based on implicit government subsidies until the federal government steps in with a bailout.
Blue Dogs Cut a Deal—and States Suffer
The Energy and Commerce Committee was able to report the Democrat health bill after a “compromise” agreement reached with several Blue Dog Democrats on the Committee. The agreement—which House leaders called a “temporary accommodation” that may not last on the House floor—calls for States to pay 10 percent of the cost of the proposed Medicaid expansion, beginning in 2015. According to a preliminary Congressional Budget Office (CBO) score of H.R. 3200 as introduced, this provision alone would require States to pay an additional $35.8 billion in matching funds over the next decade, to increase the current Medicaid population by 10 million individuals.
However, States cannot afford their current Medicaid programs, which is why Congress included a $90 billion Medicaid bailout in the “stimulus” package. Moreover, State Governors in both parties have already voiced significant concerns about the unfunded mandates in the underlying bill, which prohibits States from reducing or otherwise modifying their existing programs in any way after the bill’s enactment. Many Members may view these unfunded mandates as a budgetary gimmick that shifts new federal spending on to the backs of States in an attempt to mask the full scope of Democrats’ proposed government takeover of health care. More importantly, Members may be concerned that the unsustainable burdens being placed on State governments could prompt some States to drop their Medicaid programs entirely—decreasing, not increasing, the number of individuals with insurance.