Health Care Law MORE Unpopular

Key take-aways from this month’s Kaiser Tracking Poll, released this morning:

  • The health law became more unpopular in August, with approval falling seven points to 43%, and disapproval rising by ten points, to 45%.
  • Fewer than one in three (29%) voters believe the law will make them better off – up only one point from the historic low of 28%, set in June.
  • Only 39% of respondents believe that health “reform” will help the country as a whole – the lowest rating since the current health care debate began, and down 20 points from the 59% who thought health reform would benefit the country in February 2009.
  • A net majority of 50% believes the health care law will not be successful in “reducing the total amount the country spends on health care” (31% disagree strongly), compared to only 46% who believe the law will contain costs (only 14% strongly).
  • Among registered voters, 34% are more likely to oppose a candidate who supported the health care law (26% strongly), while 31% are likely to support a candidate who voted for the law (only 18% strongly).
  • A majority (52%) of voters strongly disapprove of the health care law’s individual mandate to purchase insurance.  A further 18% somewhat disapprove, leading to an overall negative rating for the mandate of 70% – almost the same margin by which voters in Missouri rejected the mandate in a referendum earlier this month.
  • Informing those who initially approved of the individual mandate that such a provision “could mean that some people would be required to buy health insurance that they find too expensive or did not want” led nearly half of the mandate’s supporters to reconsider their position, driving the mandate’s net disapproval up to a whopping 83%.

Politico has a brief summary of the poll, noting that the results are “a far cry from the bump proponents had hoped to see as some of the law’s more consumer-friendly provisions kick in.”  And unfortunately for Democrats, future months are unlikely to see many welcome developments either.  Among the “coming attractions” for individuals heading into open-enrollment periods this fall: Premiums will go up, many Americans will discover they will lose their existing coverage as soon as next year thanks to the law’s new mandates and regulations, and millions of seniors will lose access to Medicare Advantage plans they have and like.  No wonder the polls remain clear that Democrats’ government takeover of health care is a change most Americans do not believe in.

Setting the Record Straight on Health Care Law and the Deficit

In case you hadn’t seen it, Sen. Crapo’s office earlier this afternoon sent out a release regarding spurious claims Democrats and their allies have made in recent days regarding the health care law’s impact on the deficit.  Specifically, the White House and others have claimed that a letter from CBO to Sen. Crapo last week regarding the $455 billion cost of repealing “certain provisions” in the health care law is equivalent to the cost of repealing the entire law itself.  Nothing could be further from the truth.

In fact, as the press release indicates, Sen. Crapo did NOT request an estimate for the full repeal of the legislation – rather, the CBO’s estimate relates to the cost of repealing only the Medicare savings provisions.  Sen. Crapo requested this estimate from CBO because the Medicare actuary, both in the annual Medicare trustees report earlier this month and a separate analysis of the health care law, believe that most of the major Medicare reductions are not sustainable.  For instance, the Medicare actuary asserted that under the law’s provisions “Medicare beneficiaries would almost certainly face increasingly severe problems with access to care,” and that providers “would have to withdraw from providing services to Medicare beneficiaries.  Likewise, the CBO itself concluded in its long-term budget outlook last month that most of the health law’s major savings provisions are “widely expected” NOT to occur, and if they were implemented, “might be difficult to sustain for a long period.”  However, as Sen. Crapo’s letter revealed, if these unrealistic provisions were overridden by Congress, the result would be a significant net increase in the budget deficit.

So while Democrats are attempting to use the CBO letter to make the false claims that repealing the health care law would cost $455 billion, the REAL story is the fact that the claims that the health care law will reduce the deficit in the first place are based on projections that virtually all independent experts believe will never take place – a budgetary gimmick if ever there were one.

How Fuzzy Reinsurance Math Will Lead to Future Calls for Bailouts

The Administration released information regarding the first round of applications to the retiree reinsurance program today.  According to the release, nearly 2,000 employer applications have been approved; a list by state is available on the HHS website.

Over and above the vast number of union employers – municipalities, school districts, or multi-employer plans maintained by union organizations – included on the list, it’s worth examining the math behind the program and its funding.  Specifically, Section 1102 of the health care law appropriates $5 billion between now and January 2014 for the reinsurance program.  Assuming 2,000 employers apply for the program, that amounts to a total subsidy of $2,500,000 per employer for the next four years – or $625,000 per employer per calendar year.

Under the law’s provisions, employers can receive a maximum of $60,000 in funding for each retiree – 80% of a worker’s medical claims above $15,000 and below $90,000.  But as noted above, the $5 billion in funding, divided evenly among 2,000 employers, provides each employer with an average of $625,000 per year, an amount that is only enough to cover full claims on 10 retired workers.  In other words, if the participating employers average more than 10 catastrophically sick employees per year, the reinsurance program will run out of money.

To be fair, not all retirees will be eligible for the full $60,000 in federal subsidies, because they won’t have $90,000 in medical claims per year; if retired workers don’t accumulate $15,000 in claims per year – and some won’t – their employer won’t receive a subsidy for that worker at all.  But how many people think that companies like AT&T, General Motors, General Electric, and the hundreds of cities whose applications were accepted really will have fewer than a dozen retirees per year making the full catastrophic claim on the federal program?  If that happens – and it seems virtually inevitable – union special interests will advocate for a taxpayer bailout of the under-funded program, just as they advocated for creation of the $5 billion reinsurance fund in the first place.

Based on this fuzzy reinsurance math, it’s clear that once again, Democrats have created another entitlement program – this one directed toward their union friends and allies – that is unsustainable, and one that will face pressure for a federal bailout before the program concludes.

Washington Times on Donald Berwick’s Non-Disclosures

This morning the Washington Times features a front-page story about Centers for Medicare and Medicaid Services (CMS) Administrator Donald Berwick’s failure to disclose donors to the Institute for Healthcare Improvement (IHI), which he lead for over a decade prior to his appointment.  As previously noted, Dr. Berwick in his letter claimed that he could not release IHI’s privately-held records, as he has severed ties to the organization.  However, Dr. Berwick had the power to disclose this information for more than a month prior to his appointment – when he was still working as IHI’s chief executive – but chose not to do so.

Dr. Berwick’s lack of transparency regarding his financial dealings is consistent with the Administration’s public relations strategy of not making Dr. Berwick available for interviews.  But it’s yet another broken promise from an Administration that pledged “an unmatched level of transparency, participation, and accountability.”  And the fact that Dr. Berwick chose not to disclose IHI’s financial information when he had the power to do so – and has not so much as taken a single question in public from Members of Congress or members of the press – speaks to the controversial nature of both his appointment and the health care law he will implement.

Max Baucus Thinks Reading the Health Care Bill a Waste of Time

Under the “They Said It” category comes this story from the Flathead Beacon in Montana, discussing Monday’s town hall meeting in the town of Libby, where Finance Committee Chairman Baucus and HHS Secretary Sebelius discussed the health care law, and specifically a “backroom deal” in the measure whereby certain individuals in Libby were granted access to Medicare.  At the town hall, one resident asked Baucus and Sebelius “if either of you read the health care bill before it was passed and if not, that is the most despicable, irresponsible thing,” to which Baucus responded:

I don’t think you want me to waste my time to read every page of the health care bill.  You know why?  It’s statutory language…We hire experts.”

Back in March, Speaker Pelosi said that Democrats had to pass the health care bill “so that you can find out what is in it.”  She was talking to members of the general public, but judging from the comments above, she may have been referring to Members of Congress as well. (For the record, reading guides to the health care bill’s provisions are available here and here.)

Senator Baucus may not have read the health care legislation, but the non-partisan Congressional Budget Office (CBO) – i.e., some of the Congressionally-hired “experts” Sen. Baucus alluded to – did.  Just last week, the CBO estimated that the health law’s job-killing tax hikes and related policies will kill hundreds of thousands of jobs over the coming years.

Therein lies the true contradiction in the yearlong health care debate.  Democrat Members asserted they need not read the health care bill because they hired “experts” (or two lawyers over two days) to help them understand it.  But they then proceeded to ignore predictions by those same experts that the law will kill jobs and thus damage economic growth.  Considering it a “waste of time” to review provisions that Congress’ own budget experts believe will destroy jobs represents the furthest thing from health “reform” – and reinforces why true reform is needed now more than ever.

Liberal Groups’ Strategy: Don’t Talk about Health Care!

Politico has a fascinating article this morning about how the liberal umbrella group Health Care for America Now (HCAN) is “fighting hard to help re-elect lawmakers who voted for the [health care] bill – even if it means not talking about it….HCAN’s field crews are finding that the best way to support reform-friendly lawmakers is to talk about something else,” like jobs or the economy.

The article also included a striking admission from HCAN’s national field director: “Most people out there are not going to see their health care change for awhile…You might see your premiums go up, but your premiums are going to go up anyway.”  This of course represents a clear break with the President’s rhetoric on the campaign trail, as candidate Obama famously promised to reduce family premiums by up to $2,500 “by the end of my first term as President.”

Just as important, when it comes to jobs and the economy, the health care law is a loser not just on message, but in substance as well.  The law contains more than half a trillion dollars in job-killing taxes on businesses large and small, and contains perverse financial incentives that the Congressional Budget Office recently found would discourage work, further damaging the American economy.

Speaker Pelosi famously said in March that Democrats had to pass the health care bill “so that you can find out what is in it.”  Now, nearly six months later, even liberal groups are afraid to talk about their unpopular health law, and have admitted that the public doesn’t believe the law will help either the deficit or the economy.  When will the majority admit that their government takeover of health care is the furthest thing from the “reform” most Americans wanted?

Secretary Leavitt Op-Ed on Medicare Reform

In case you hadn’t seen it, wanted to pass on this excellent op-ed by former HHS Secretary Leavitt in this morning’s Washington Post outlining why the Medicare trustees report presented an illusion of reform to that troubled entitlement program.  The article does a good job explaining the double-counting and unsustainable/unrealistic savings projections that underpin Democrats’ assertions regarding Medicare’s solvency, and then makes the trenchant observation that “the Medicare bureaucracy, even with the Independent Payment Advisory Board attached to it, does not have the capacity to engineer a more efficient health delivery system through complicated payment regulations.”

Update on Donald Berwick and Conflicts of Interest

Late yesterday afternoon CMS Administrator Donald Berwick sent a letter to Sen. Grassley responding to Sen. Grassley’s July 29 letter to Dr. Berwick that he disclose information regarding the donors who funded the Institute for Healthcare Improvement (IHI) during Dr. Berwick’s time as its CEO.  The letter only discusses conflict-of-interest issues, and does not represent the “point-by-point rebuttal” to critics of his controversial writings that the New York Times reported last month Dr. Berwick is preparing.  Three interesting points of note from the letter:

  • With regard to Sen. Grassley’s specific request for more information regarding IHI’s donors, Dr. Berwick responded that “because the information you requested includes non-public documents in the possession of my now former employer, it is not within my power to comply with your entire request.”  However, as Sen. Grassley’s letter noted, Finance Committee staff first requested the IHI donor information from Dr. Berwick on June 4, 2010 – more than one month prior to Dr. Berwick’s recess appointment, while he was still head of IHI.  In other words, Dr. Berwick had the power to compel disclosure of IHI’s funding sources while he still headed that organization, but chose not to do so prior to his appointment – and is now attempting to use his recess appointment as a justification to keep the information private.
  • In response to Sen. Grassley’s request about ethics waivers, Dr. Berwick replied that “two of my former clients – Kaiser Permanente and The Commonwealth Fund – would have a particularly significant role in providing input to officials at CMS on policy matters related to health care quality, Medicare payment reform, and health care reform implementation, and that it would therefore be important for me to participate in discussions that are likely to include participation by The Commonwealth Fund or Kaiser Permanente.”  Dr. Berwick therefore said he will shortly seek an ethics waiver regarding these two former clients.  Some may note with interest the logic that nominees should recuse themselves from matters involving former clients – unless those clients’ interests before the agency are “particularly significant,” in which case the nominee can apply for a waiver.  However, Dr. Berwick did claim that his ethics waiver would be limited, and he would not participate in any matter regarding these two parties “that has a direct and predictable effect on the[ir] financial interest…including such matters as contracts, grants” and other similar proceedings.
  • With regard to Dr. Berwick’s relationship with IHI, he claimed that upon his resignation from IHI “I forfeited all benefits from IHI except” his supplemental executive pension.  Therefore, Dr. Berwick wrote that “IHI does not currently and will not provide any benefits to me or my family, including health care coverage.”  As previously noted here and elsewhere, IHI noted in its financial statements that in 2003 it “established a postretirement health benefit plan” for Dr. Berwick, which offered coverage “from retirement until death.”

Sadly, Dr. Berwick’s apparent lack of transparency regarding his financial dealings is consistent with the Administration’s public relations strategy of not making Dr. Berwick available for interviews.  But it’s yet another broken promise from an Administration that pledged “an unmatched level of transparency, participation, and accountability.”  And the fact that Dr. Berwick chose not to disclose IHI’s financial information when he had the power to do so – and has not so much as taken a single question in public from Members of Congress or members of the press – speaks to the controversial nature of both his appointment and the health care law he will implement.

Business Week: “Small Businesses Skip the Tax Credit”

Business Week has an article this morning highlighting the ineffectiveness of the small business tax credit in actually helping companies afford health coverage.  The article interviews one small business owner with only 15 workers who doesn’t qualify for the credit, because his workers’ average salary is too high – a recipe for wage deflation if there ever was one.  And therein lies the problem with the credit:

The response has been tepid, according to insurance brokers who sell small-group policies. The reason, they argue, is that the credit starts to phase out for companies that pay average annual wages of more than $25,000 or employ more than 25 workers. The value of the benefit declines quickly, so many business owners in high-cost states get no tax break, and those elsewhere often say the credit is too small to make much of a difference.

As the article notes, the small business credit is limited in its amount.  Just as important, the law also limits its duration, meaning that firms will need to absorb the full brunt of premium costs in relatively short order.  But the law contains dozens of mandates to be implemented over the next several years, each of which could raise premium costs by 1-3 percent.  Who then would want to take on new health care costs – or even continue to offer coverage – knowing that the meager small business credit will soon expire, and a mountain of premium-raising federal mandates loom on the horizon in its stead?

Democrats advertised the small business tax credit as one of the “immediate deliverables” promised by the law – but this morning’s article confirms that its poor structure means it will prove much less effective than advertised.  Moreover, while Democrats attempt to re-direct focus on to a relatively paltry tax credit, American businesses, just like American workers, are already seeing the adverse effects of Democrats’ unpopular law emerge before their eyes.

Food Safety Bill Update

As you are probably aware, the recent coverage of the salmonella outbreak in eggs has raised the prominence of the pending FDA food safety bill (S. 510).  Two weeks ago, Sen. Harkin’s staff released a manager’s package, negotiated on a bipartisan basis, as a precursor to floor action.

While the manager’s package was negotiated on a bipartisan basis, there is not yet a time agreement or unanimous consent to bring the bill to the floor in September.  Those discussions will not take place until Members return from recess.  In addition, as previous news reports have discussed, there are outstanding issues on the Democratic side that need to be resolved – most notably Sen. Feinstein’s proposed ban on bisphenol-A (BPA), and Sen. Tester’s proposed amendment exempting small farmers from the bill’s requirements – prior to any time agreement being reached.  Recall also that, per Sen. Reid’s actions three weeks ago, the first order of business when we return will be the small business bill (H.R. 5297), with cloture votes on several amendments and the bill itself scheduled for the morning of Tuesday, September 14.