Pete Buttigieg’s Health Care Sabotage Strategy

After the most recent Democratic presidential debate, when South Bend, Indiana Mayor Pete Buttigieg criticized Massachusetts Sen. Elizabeth Warren for evasiveness on her single-payer health plan, Warren’s staff circulated a Buttigieg tweet from February 2018. The tweet indicates Buttigieg’s support for single-payer 20 months ago, which makes him a hypocrite for criticizing her now, according to the Warren camp.

In response, Buttigieg claimed, “Only in the last few months did it become the case that [single-payer] was defined by politicians to mean ending private insurance, and I’ve never believed that that’s the right pathway.” Apparently, Buttigieg never read Sen. Bernie Sanders’ bill — which Sanders, a Vermont independent, introduced in September 2017 — Section 107(a) of which makes private insurance “unlawful.”

Buttigieg’s evasion follows a consistent pattern among Democrats running for president, a two-step in which candidates try to avoid angering both Americans who want to keep their current coverage and the socialist left, who view single-payer’s enactment as a shibboleth. In January, Sen. Kamala Harris, D-Calif., told the American people, “Let’s move on” from private insurance, but she later put out a health plan that she says retains a role for private coverage. Warren herself said as recently as March that she had embraced approaches other than single-payer to achieving the goal of universal coverage.

More importantly, however, Buttigieg wants to enact single-payer — and has said as much. He just wants to be stealthier than Warren and Sanders in taking away Americans’ private insurance.

‘Glide Path’: An Expressway Toward Government-Run Care

Consider a spokesman’s response to the Warren camp re-upping Buttigieg’s 2018 tweet:

Asked about the tweet, a Buttigieg aide … argued he had not changed his position, saying he supports [single-payer] as an end goal but that he wants to get there on a ‘glide path’ by allowing people to have a choice and opt into the government plan.

Indeed, the health care plan on Buttigieg’s website makes the exact same point: “If private insurers are not able to offer something dramatically better, this [government-run] plan will create a natural glide path to” single-payer.

The details of his health care proposal reveal Buttigieg’s “glide path” as an expressway to government-run care, time and time again favoring the government-run plan over private insurance. Consider the following references to the government-run plan in the health care proposal:

  • “Individuals with lower incomes in states that have refused to expand Medicaid will be automatically enrolled in the [government-run plan].”
  • “Individuals who forgo coverage through their employer because it’s too expensive will be able to enroll in the [government-run plan] and receive access to income-based subsidies that help guarantee affordability.”
  • “Anyone eligible for free coverage in Medicaid or the [government-run plan] will be automatically enrolled.” The plan goes on to admit that “individuals could opt out of public coverage if they choose to enroll in another insurance plan,” but the government-run plan would serve as the default “option.”
  • “Individuals with no coverage will be retroactively enrolled in the [government-run plan].”

By automatically enrolling people in the government-run plan — not private insurance, not the best insurance, not the most affordable insurance, but in the government-run insurance plan — Buttigieg wants to make that “option” the only “choice for Americans.”

In 2009, independent actuaries at the Lewin Group concluded that a government-run plan paying doctors and hospitals at Medicare rates, and open to individuals with employer plans — a policy Buttigieg endorsed in his campaign outline — would siphon 119.1 million Americans away from their private coverage, and onto the government-run plan:

Buttigieg calls his plan “Medicare for All Who Want It.” But given the biases in his plan in favor of government-run coverage, another description sounds more apt: “Medicare: Whether You Want It or Not.”

Opportunistic Flip-Flops

Buttigieg sees political value in hitting Warren from the right on health care. But recall that Barack Obama did the same thing in the 2008 presidential primaries, decrying Hillary Clinton’s proposal to require all Americans to purchase health coverage:

Obama used those attacks to wrest the nomination from Clinton, and ultimately capture the presidency. Once he did, he flip-flopped on the coverage requirement, embracing the individual mandate he had previously attacked during the election campaign.

Buttigieg wants to force all Americans into government-run care. He has said as much repeatedly. His attacks on Warren represent an attempt to sound moderate and draw necessary political distinctions ahead of the Democratic primaries.

While he may moderate his tone to get elected, don’t think for a second he would moderate his policies or do anything other than sabotage private health coverage once in office. We’ve seen this show before — but whether we will see it again remains in the hands of the American people.

This post was originally published at The Federalist.

The Left’s Health Care Vision a Prescription for Brute Government Force

Even as Democrats inveigh against President Trump for his alleged norm-shattering and contempt for the rule of law, their health care plans show a growing embrace of authoritarianism. For instance, Rep. Adam Schiff (D-CA) recently dubbed the President’s July 25 call with Ukrainian President Volodymyr Zelensky “a classic mafia-like shakedown.” He knows of which he speaks, because the Democratic agenda on health care now includes threats to destroy any entities failing to comply with government-dictated price controls.

The latest evidence comes from Colorado, where several government agencies recently submitted a draft report regarding the creation of a “state option” for health insurance. The plan would not create a state-run health insurer; instead, it would see agencies dragooning private sector firms to comply with government diktats.

The plan would “require insurance carriers that offer plans in a major market,” whether individual, small group, or large group, “to offer the state option as well.” In these state-mandated plans insurers must offer, carriers would have to abide by stricter controls on their administrative costs, in the form of medical loss ratio requirements, than those dictated by Obamacare.

For medical providers, the Colorado plan would use “payment benchmarks” to cap reimbursement amounts for doctors and hospitals. And if hospitals decline to accept these government-imposed price controls, the report ominously says that “the state may implement measures to ensure health systems participate.”

In comments to reporters, Colorado officials made clear their intent to coerce providers into this price-controlled system. Insurance Commissioner Michael Conway admitted that “If our hospital systems don’t participate, this won’t work….We can’t allow that to happen.” The head of Colorado’s Department of Health Care Policy and Financing, Kim Bimestefer, said that “if we feel that the hospitals are not going to participate, we will require their participation.”

State officials did not elaborate on the mechanisms they would use to compel participation in the state option. But they could attempt to require hospitals and insurers to participate in the new plan to maintain their license to operate in Colorado—a likely unconstitutional condition of licensure.

In threatening this level of coercion—agree to price controls, or we’ll shut down your business—Colorado Gov. Jared Polis imitated his fellow Democrat, House Speaker Nancy Pelosi. Pelosi’s proposed drug pricing bill, up for a vote in the House as soon as next month, would impose excise taxes of up to 95 percent of a drug’s sale price if companies refuse to “negotiate” with the federal government.

In its analysis of Pelosi’s legislation, the Congressional Budget Office (CBO) noted that, because drug makers could not deduct the 95 percent excise tax for income tax purposes, “the combination of income taxes and excise taxes on the sales could cause the drug manufacturer to lose money if the drug was sold in the United States.” Perhaps unsurprisingly, CBO concluded that the excise tax would not generate “any significant increase in revenues,” as “manufacturers would either participate in the negotiating process”—because they have no effective alternative—“or pull a particular drug out of the U.S. market entirely.”

CBO also noted, in a classic bit of understatement, that Pelosi’s bill “could result in litigation,” for threatening losses on any company that dares defy the government’s offer of “negotiation.” But the left seems uninterested in abiding by limits on government power—or the consistency of its own arguments. As I noted this spring, other proposed legislation in Congress would abolish the private health care market. Less than one decade after forcing all Americans to buy a product for the first time ever, in the form of Obamacare’s insurance mandate, liberals now want to prohibit all Americans from purchasing care directly from their doctors.

These recent proposals continue a virulent strain of authoritarianism that has permeated progressivism’s entire history. Franklin Roosevelt threatened to invoke emergency powers during his first inaugural address, and Rahm Emanuel infamously said during the Great Recession that “you never want a serious crisis to go to waste.” Make no mistake: The health care system needs patient-centered reform. But the true crisis comes from the progressives who would utilize blunt government force to seize control of one-fifth of the nation’s economy.

This post was originally published at The Daily Wire.

In Fourth Dem Debate, Warren Maintains Her Health Care Evasion

On Tuesday, Sen. Sherrod Brown—a notable leftist who has said he supports a single-payer health care system in theory—said in a CNN story that “it’s a terrible mistake if the Democratic nominee would publicly support ‘Medicare for All.’” On Tuesday evening, two of the party’s leading contenders for that nomination, Sens. Bernie Sanders and Elizabeth Warren, redoubled their commitment to such a policy, with Warren drawing fire from all sides about her lack of detail surrounding the issue.

As she had in previous debates, Warren refused to get into specifics about how she would pay for the single-payer plan that Sanders has introduced as legislation, and which Warren has endorsed. Sanders has previously admitted that taxes on the middle class would go up under his plan.

Warren would not admit that taxes on the middle class would go up under single payer. She claimed that costs for the middle class would go down on net under her plan, and that she would not sign any legislation that raised costs on the middle class.

However, even this supposed promise raised additional questions:

  1. Who qualifies as middle class in Warren’s estimation? A family making under $50,000, a family making under $250,000, or somewhere in between?
  2. Does Warren’s promise mean that no middle-class families will see their costs go up on net? If so, that seems like an impossibly high bar to clear, as virtually every major law creates both winners and losers. Even though the left tries to turn the federal government into another version of “Oprah’s Finest Things”—“You get a car! You get a car! You get a car!”—it rarely works out that way in practice.
  3. In September 2008, Barack Obama made a “firm pledge” that he would not raise taxes on families making under $250,000 per year—“not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.” That promise lasted for less than a month of his administration. On February 4, 2009, two weeks after taking office, Obama signed a children’s health insurance reauthorization that included a large increase in tobacco taxes—taxes that hit working class families hardest. Given how quickly Obama did an about-face on his campaign promise, why should the American people take Warren’s word any more seriously than they did Obama’s “firm pledge?”

South Bend Mayor Pete Buttigieg also chimed in on the funding discussion. He had previously characterized Warren as “extremely evasive” on the issue during the last debate, and released ads prior to this debate questioning Warren’s and Sanders’ proposals to prohibit private health insurance. During the CNN debate, he pressed both issues, noting (as this commentator has) that Warren has “a plan for everything, except this.” With that, Warren derided Pete’s plan as “Medicare for all who can afford it.”

It seems particularly noteworthy that Warren wants to enact a major expansion of the federal government’s role—the largest expansion of government’s role ever, in both its financial scope and massive reach into every American’s life—yet cannot find a sufficient justification to admit the middle class will pay even a little bit more in taxes to fund this socialist utopia. The former speaks volumes about the left’s ultimate objective—full, unfettered power over the economy—and the latter speaks to the deception they are using to obtain it.

This post was originally published at The Federalist.

Hospital’s “Egregiously Unethical” Behavior Illustrates Problems of Government-Run Health Care

Why would a hospital keep a brain-damaged patient on life support in a vegetative state for months, without so much as talking with the patient’s relatives to ascertain the family’s wishes for their loved one? Because government regulations encouraged them to do just that.

ProPublica recently profiled a pattern of troubling cases at Newark Beth Israel hospital. In several cases, physicians admitted they kept patients alive to bolster their statistics in government databases, and prevent a potential closure of the hospital’s transplant unit. The sorry tale shows but some of the perverse consequences of government-run health care—a system that the left wants to force on all Americans.

Brain-Damaged Patient Artificially Kept Alive

After suffering from congestive heart failure for years, Young, a Navy veteran and former truck driver with three children, had received a heart transplant on Sept. 21, 2018. He didn’t wake up after the operation and had been in a vegetative state ever since.

Machines whirred in his room, pumping air into his lungs. Nutrients and fluids dripped from a tube into his stomach. Young had always been fastidious, but now his hair and toenails had grown long. A nurse suctioned mucus from his throat several times a day to keep him from choking, according to employees familiar with his care. His medical record would note: ‘He follows no commands. He looks very encephalopathic’—brain damaged.

On one day this April, physicians at Newark Beth Israel discussed what to do about their brain damaged, and severely injured, patient. When asked about Young, the head of the hospital’s transplant team, Mark Zucker, had a blunt response: “Need to keep him alive ‘til June 30 at a minimum.”

Zucker went on, instructing hospital staff not to raise the option of palliative care—that is, a less aggressive treatment course focused more on alleviating pain—until the one-year anniversary of Young’s transplant in September.

“It’s not as if they’re asking for this and we’re saying no, we cannot do this,” another physician said, according to a recording of the meeting. “We haven’t refused anything they’ve asked,” Zucker agreed in talking of the family’s wishes. “We just haven’t raised withdrawing” intensive treatment.

Unethical Behavior to Meet Government Targets

Beginning in 2007, as ProPublica notes, the federal Centers for Medicare and Medicaid Services (CMS) set quality standards for organ transplants:

Under those rules, the one-year survival rate has been ‘the magic number,’ according to Laura Aguiar, principal of consulting firm Transplant Solutions. If a program’s survival rate fell too far under its expected rate, which was calculated by a CMS algorithm, the agency could launch an audit. If the audit uncovered serious problems, CMS could pull a program’s Medicare certification, meaning that the federal health care insurer would stop reimbursing for transplants.

A hospital losing its Medicare certification could lead to the end of its transplant program, as many private insurers will only pay for procedures performed at Medicare-certified hospitals. With heart transplant survival rates already below the national averages, Newark Beth Israel feared the potential consequences of an audit if its numbers fell any further.

As a result, the hospital’s doctors decided to keep patients like Young alive to prop up its federal rankings. They took those actions without consulting Young’s family, and even though they believed Young would “never wake up or recover function.”

Hid Information from Relatives

Despite the damage to Young’s brain during the procedure, doctors never initiated a conversation with the family about options for care, such as hospice, given his poor prognosis for recovery. They failed to inform Andrea Young that her brother had contracted a dangerous drug-resistant fungal infection. During this time, Andrea also struggled to ensure the hospital staff provided basic grooming; she recounted that it took four months—four months—for staff to trim her brother’s toenails.

All the while, doctors knew they were violating their ethical duty to Darryl Young, by failing to obtain informed consent for his care. But they felt that Young and his family needed to “take one for the team”—incur more pain and heartache so the hospital could meet government targets. As transplant director Mark Zucker explained in a meeting:

This is a very, very unethical, immoral but unfortunately very practical situation, because the reality here is that you haven’t saved anybody if your program gets shut down….This guy unfortunately became the seventh potential death in a very bad year, alright, and that puts us into a very difficult spot.

Sadly, Darryl Young does not represent the only instance where Newark Beth Israel purposefully tried to boost their targets to meet government standards. ProPublica uncovered other instances where patients were kept alive, or their hospital discharge delayed, until one year after surgery. Notes in another patient’s files indicate that “he will remain hospitalized…to hit his one year anniversary.”

Government-Run Care Betrays the Vulnerable

Poor examples of government-run health care abound. As I recently noted, the United States suffers from an antiquated kidney care system—with a much smaller percentage of patients receiving at-home dialysis than a country like Guatemala—because Medicare has covered most patients with kidney disease since 1973, and the government-run program has failed to innovate since then. In the Newark Beth Israel case, an arbitrary target imposed by a government agency more than a decade ago led to patients being kept alive simply to meet that target.

Patients like Darryl Young deserve better than the care Newark Beth Israel provided to him. They also deserve better than the government-run health care that the left wants to impose on all Americans.

This post was originally published at The Federalist.

President’s Executive Order Shows Two Contrasting Visions of Health Care

As Washington remains consumed by impeachment fever, President Trump returned to the issue of health care. In an executive order released Thursday, and a speech at The Villages in Florida where he spoke on the topic, the president attempted to provide a vision that contrasts with the left’s push for single-payer socialized medicine.

This executive order focused largely on the current Medicare program, as opposed to the existing private insurance marketplace. By promoting new options and focusing on reducing costs, however, the president’s actions stand in opposition to the one-size-fits-all model of the proposed health care takeover.

The Administration Wants To Explore These Proposals

One fact worth repeating about Thursday’s action: As with prior executive orders, it will in and of itself not change policy. The more substantive changes will come in regulatory proposals issued by government agencies (most notably the Department of Health and Human Services) in response to the executive order. While only the regulations can flesh out all of the policy details, the language of the order provides some sense of the proposals the administration wants to explore.

Modernized Benefits: The executive order promotes “innovative … benefit structures” for Medicare Advantage, the program in which an estimated 24 million beneficiaries receive Medicare subsidies via a network of private insurers. It discusses “reduc[ing] barriers to obtaining Medicare Medical Savings Accounts,” a health savings account-like mechanism that gives beneficiaries incentives to serve as smart consumers of health care. To accomplish that last objective, the order references broader access to cost and quality data, “improving [seniors’] ability to make decisions about their health care that work best for them.”

Expanded Access: The order seeks to increase access to telehealth as one way to improve seniors’ ability to obtain care, particularly in rural areas. It also looks to combat state-imposed restrictions that can limit care options, and can lead to narrow physician and provider networks for Medicare Advantage plans.

More Providers: The order discusses eliminating regulatory burdens on doctors and other medical providers, a continuation of prior initiatives by the administration. It also references allowing non-physician providers, such as nurse practitioners and physician assistants, to practice to the full scope of their medical licenses and receive comparable pay for their work.

Entitlement Reform: Last, but certainly not least, the order proposes allowing seniors to opt out of the Medicare program. This proposal would not allow individuals to opt out of Medicare taxes, but it would undo current regulations that require seniors to opt into the Medicare program when they apply for Social Security.

As I had previously explained, this proposal stands as a common-sense solution to our entitlement shortfalls: After all, why should we force someone like Bill Gates or Warren Buffett to accept Medicare benefits if they are perfectly content to use other forms of health coverage?

Democrats’ Health Care Vision Is Medicare for None

Of course, many on the socialist left have made their vision plain for quite some time: They want the government to run the entire health-care system. Ironically enough, however, Sen. Bernie Sanders’ single-payer legislation would abolish the current Medicare program in the process:

(1) IN GENERAL.—Notwithstanding any other provision of law, subject to paragraphs (2) and (3)—

(A) no benefits shall be available under title XVIII of the Social Security Act for any item or service furnished beginning on or after the effective date of benefits under section 106(a)

As I first noted nearly two years ago, this language makes Sanders’ proposal not “Medicare for All,” but “Medicare for None.” It speaks to the radical nature of the socialist agenda that they cannot come clean with the American people about the implications of their legislation, such that even analysts at liberal think-tanks have accused them of using dishonest means to sell single-payer.

Just as important, “Medicare for None” would take away choices for seniors and hundreds of millions of other Americans. As of next year, an estimated 24 million seniors will enroll in Medicare Advantage plans to obtain their Medicare benefits. As I outline in my book, Medicare Advantage often provides better benefits to seniors, and at a lower cost to both beneficiaries and the federal government. Yet Sanders and his socialist allies want to abolish this popular coverage, to consolidate power and control in a government-run health system.

The actions the administration announced on Thursday represent the latest in a series of steps designed to offer an alternative to the command-and-control vision promoted by the left. The American people don’t deserve socialized medicine, but they don’t deserve the broken status quo either. Only true patient-centered reforms can create a health-care environment that works for seniors and the American people as a whole.

This post was originally published at The Federalist.

Third Dem Debate Leaves Major Health Care Questions Unanswered

For more than two hours Thursday night in Houston, 10 presidential candidates responded to questions in the latest Democratic debate. On health care, however, most of those responses didn’t include actual answers.

As in the past several contests, health care led off the debate discussion, and took a familiar theme: former vice president Joe Biden attacked his more liberal opponents for proposing costly policies, and they took turns bashing insurance companies to avoid explaining the details behind their proposals. Among the topics discussed during the health care portion of the debate are the following.

How Much—and Who Pays?

The problems, as Biden and other Democratic critics pointed out: First, it’s virtually impossible to pay for a single-payer health care system costing $30-plus trillion without raising taxes on the middle class. Second, even though Sanders has proposed some tax increases on middle class Americans, he hasn’t proposed nearly enough to pay for the full cost of his plan.

Third, a 2016 analysis by a former Clinton administration official found that, if Sanders did use tax increases to pay for his entire plan, 71 percent of households would become worse off under his plan compared to the status quo. All of this might explain why Sanders has yet to ask the Congressional Budget Office for a score of his single-payer legislation: He knows the truth about the cost of his bill—but doesn’t want the public to find out.

Keep Your Insurance, or Your Doctor?

Believe it or not, Biden once again repeated the mantra that got his former boss Barack Obama in trouble, claiming that if people liked their current insurance, they could keep it under his plan. In reality, however, Biden’s plan would likely lead millions to lose their current coverage; one 2009 estimate concluded that a proposal similar to Biden’s would see a reduction in private coverage of 119.1 million Americans.

For his part, Sanders and Warren claimed that while private insurance would go away under a single-payer plan, people would still have the right to retain their current doctors and medical providers. Unfortunately, however, they can no more promise that than Biden can promise people can keep their insurance. Doctors would have many reasons to drop out of a government-run health plan, or leave medicine altogether, including more work, less pay, and more burdensome government regulations.

Supporting Obamacare (Sometimes)

While attacking Sanders’ plan as costly and unrealistic, Biden also threw shade in Warren’s direction. Alluding to the fact that the Massachusetts senator has yet to come up with a health plan of her own, Biden noted that “I know that the senator says she’s for Bernie. Well, I’m for Barack.”

Biden’s big problem: He wasn’t for Obamacare—at least not for paying for it. As I have previously noted, Biden and his wife Jill specifically structured their business dealings to avoid paying nearly $500,000 in self-employment taxes—taxes that fund both Obamacare and Medicare.

A March to Government-Run Care

I’ll give the last word to my former boss, who summed up the “contrasts” among Democrats on health care.

As I have previously noted, even the “moderate” proposals would ultimately sabotage private coverage, driving everyone into a government-run system. And the many unanswered questions that Democratic candidates refuse to answer about that government-run health system provide reason enough for the American people to reject all the proposals on offer.

This post was originally published at The Federalist.

The Good, The Bad, and The Ugly of Nancy Pelosi’s Drug Pricing Proposal

During the midterm election campaign, Democrats pledged to help lower prescription drug prices. Since regaining the House majority in January, the party has failed to achieve consensus on precise legislation to accomplish that objective.

However, on Monday a summary of proposals by House Speaker Nancy Pelosi (D-CA)—which became public via leaks from lobbyists, of course—provided an initial glimpse of the Democrat leadership’s policy approach. Party leaders claimed the leaked document describes an old legislative draft (they would say that, wouldn’t they?).

The Good: Realigning Incentives in Part D

Among other proposals, the Pelosi proposal would rearrange the current Part D prescription drug benefit, and “realign incentives to encourage more efficient management of drug spending.” Under current law, once beneficiaries pass through the Part D “doughnut hole” and into the Medicare catastrophic benefit, the federal government pays for 80 percent of beneficiaries’ costs, insurers pay for 15 percent, and beneficiaries pay for 5 percent.

This existing structure creates two problems. First, beneficiaries’ 5 percent exposure contains no limit, such that seniors with incredibly high drug spending could face out-of-pocket costs well into the thousands, or even tens of thousands, of dollars.

The Pelosi proposal follows on plans by MedPAC and others to restructure the Part D benefit. Most notably, the bill would institute an out-of-pocket spending limit for beneficiaries (the level of which the draft did not specify), while reducing the federal catastrophic subsidy to insurers from 80 percent to 20 percent. The former would provide more predictability to seniors, while the latter would reduce incentives for insurers to drive up overall drug spending by having seniors hit the catastrophic coverage threshold and thus can shift most of their costs to taxpayers.

The Bad: Price Controls

The Pelosi document talks about drug price “negotiation,” but the policy it proposes represents nothing of the sort. For the 250 largest brand-name drugs lacking two or more generic competitors, the secretary of Health and Human Services would “negotiate” prices. However, Pelosi’s bill “establishes an upper limit for the price reached in any negotiation as no more than” 120 percent of the average price in six countries—Australia, Canada, France, Germany, Japan, and the United Kingdom—making “negotiation” the de facto imposition of price controls.

Drug manufacturers who refuse to “negotiate” would “be assessed an excise tax equal to 75 percent of annual gross sales in the prior year,” what Pelosi’s office called a “steep, retroactive penalty creat[ing] a powerful financial incentive for drug manufacturers to negotiate and abide by the final price.” Additionally, the “negotiated” price would apply not just to Medicare, but would extend to other forms of coverage, including private health insurance.

But the solution to that dilemma lies in trade policy, or other solutions short of exporting other countries’ price controls to the United States, as outlined in both the Pelosi and Trump approaches. Price controls, whether through the “negotiation” provisions in the Pelosi bill, or related provisions that would require rebates for drugs that have increased at above-inflation rates since 2016, have brought unintended consequences whenever policy-makers attempted to implement them. In this case, price controls would likely lead to a significant slowdown in the development and introduction of new medical therapies.

The Ugly: New Government Spending

While the price controls in the drug pricing plan have attracted the most attention, Democrats have mooted some version of them for years. Price controls in a Democratic drug pricing bill seem unsurprising—but consider what else Democrats want to include:

With enough savings, H.R. 3 could also fund transformational improvements to Medicare that will cover more and cost less—potentially including Medicare coverage for vision, hearing, and dental, and many other vital health system needs.

In other words, Pelosi wants to take any potential savings from imposing drug price controls and use those funds to expand taxpayer-funded health care subsidies. In so doing, she would increase the fiscal obligations to a Medicare program that is already functionally insolvent, and relying solely on accounting gimmicks included in Obamacare to prevent shortfalls in current seniors’ benefits.

This post was originally published at The Federalist.

Three Obstacles to Senate Democrats’ Health Care Vision

If Democrats win a “clean sweep” in the 2020 elections—win back the White House and the Senate, while retaining control of the House—what will their health care vision look like? Surprisingly for those watching Democratic presidential debates, single payer does not feature prominently for some members of Congress—at least not explicitly, or immediately. But that doesn’t make the proposals any more plausible.

Ezra Klein at Vox spent some time talking with prominent Senate Democrats, to take their temperature on what they would do should the political trifecta provide them an opportunity to legislate in 2021. Apart from the typical “Voxplanations” in the article—really, did Klein have to make not one but two factual errors in his article’s first sentence?—the philosophy and policies the Senate Democrats laid out don’t stand up to serious scrutiny, on multiple levels.

Problem 1: Politics

The first problem comes in the form of a dilemma articulated by none other than Ezra Klein, just a few weeks ago. Just before the last Democratic debate in July, Klein wrote that liberals should not dismiss with a patronizing shrug Americans’ reluctance to give up their current health coverage:

If the private insurance market is such a nightmare, why is the public so loath to abandon it? Why have past reformers so often been punished for trying to take away what people have and replace it with something better?…

Risk aversion [in health policy] is real, and it’s dangerous. Health reformers don’t tiptoe around it because they wouldn’t prefer to imagine bigger, more ambitious plans. They tiptoe around it because they have seen its power to destroy even modest plans. There may be a better strategy than that. I hope there is. But it starts with taking the public’s fear of dramatic change seriously, not trying to deny its power.

Democrats’ “go big or go home” theory lies in direct contrast to the inherent unease Klein identified in the zeitgeist not four weeks ago.

Problem 2: Policy

Klein and the Senate Democrats attempt to square the circle by talking about choice and keeping a role for private insurance. The problem comes because at bottom, many if not most Democrats don’t truly believe in that principle. Their own statements belie their claims, and the policy Democrats end up crafting would doubtless follow suit.

Does this sound like someone who 1) would maintain private insurance, if she could get away with abolishing it, and 2) will write legislation that puts the private system on a truly level playing field with the government-run plan? If you believe either of those premises, I’ve got some land to sell you.

In my forthcoming book and elsewhere, I have outlined some of the inherent biases that Democratic proposals would give to government-run coverage over private insurance: Billions in taxpayer funding; a network of physicians and hospitals coerced into participating in government insurance, and paid far less than private insurance can pay medical providers; automatic enrollment into the government-run plan; and many more. Why else would the founder of the “public option” say that “it’s not a Trojan horse” for single payer—“it’s just right there!”

Problem 3: Process

Because Democrats will not have a 60-vote margin to overcome a Republican filibuster even if they retake the majority in 2020, Klein argues they can enact the bulk of their agenda through the budget reconciliation process. He claims that “if Democrats confine themselves to lowering the Medicare age, adding a [government-run plan], and negotiating drug prices, there’s reason to believe it might pass parliamentary muster.”

Of course Klein would say that—because he never worked in the Senate. It also appears he never read my primer on the Senate’s “Byrd rule,” which governs reconciliation procedures in the Senate. Had he done either, he probably wouldn’t have made that overly simplistic, and likely incorrect, statement.

Take negotiating drug prices. The Congressional Budget Office first stated in 2007—and reaffirmed this May—its opinion that on its own, allowing Medicare to negotiate drug prices would not lead to any additional savings.

That said, Democrats this year have introduced legislation with a “stick” designed to force drug companies to the “negotiating” table. Rep. Lloyd Doggett (D-Texas) introduced a bill (H.R. 1046) requiring federal officials to license the patents of companies that refuse to “negotiate” with Medicare.

While threatening to confiscate their patents might allow federal bureaucrats to coerce additional price concessions from drug companies, and thus scorable budgetary savings, the provisions of the Doggett bill bring their own procedural problems. Patents lie within the scope of the House and Senate Judiciary Committees, not the committees with jurisdiction over health care issues (Senate Finance, House Ways and Means, and House Energy and Commerce).

While Doggett tried to draft his bill to avoid touching those committees’ jurisdiction, he did not, and likely could not, avoid it entirely. For instance, language on lines 4-7 of page six of the Doggett bill allows drug companies whose patents get licensed to “seek recovery against the United States in the…Court of Federal Claims”—a clear reference to matter within the jurisdiction of the Judiciary Committees. If Democrats include this provision in a reconciliation bill, the parliamentarian almost certainly advise that this provision exceeds the scope of the health care committees, which could kill the reconciliation bill entirely.

But if Democrats don’t include a provision allowing drug manufacturers whose patents get licensed the opportunity to receive fair compensation, the drug companies would likely challenge the bill’s constitutionality. They would claim the drug “negotiation” language violates the Fifth Amendment’s prohibition on “takings,” and omitting the language to let them apply for just compensation in court would give them a much more compelling case. Therein lies the “darned if you do, darned if you don’t” dilemma reconciliation often presents: including provisions could kill the entire legislation, but excluding them could make portions of the legislation unworkable.

Remember: Republicans had to take stricter verification provisions out of their “repeal-and-replace” legislation in March 2017—as I had predicted—due to the “Byrd rule.” (The provisions went outside the scope of the committees of jurisdiction, and touched on Title II of the Social Security Act—both verboten under budget reconciliation.)

If Republicans had to give up on provisions designed to ensure illegal immigrants couldn’t receive taxpayer-funded insurance subsidies due to Senate procedure, Democrats similarly will have to give up provisions they care about should they use budget reconciliation for health care. While it’s premature to speculate, I wouldn’t count myself surprised if they have to give up on drug “negotiation” entirely.

1994 Redux?

Klein’s claims of a “consensus” aside, Democrats could face a reprise of their debacle in 1993-94—or, frankly, of Republicans’ efforts in 2017. During both health care debates, a lack of agreement among the majority party in Congress—single payer versus “managed competition” in 1993-94, and “repeal versus replace” in 2017—meant that each majority party ended up spinning its wheels.

To achieve “consensus” on health care, the left hand of the Democratic Party must banish the far-left hand. But even Democrats have admitted that the rhetoric in the presidential debates is having the opposite effect—which makes Klein’s talk of success in 2021 wishful thinking more than a realistic prediction.

This post was originally published at The Federalist.

How a Massive Medicare Regulation Illustrates the Problems of Single Payer

What do provisions in a federal regulation, released on a sleepy Friday in August, have to do with the raging debate regarding single-payer health care? As it turns out, plenty.

By definition, single-payer health care assumes that one payer will finance all the care provided by the nation’s doctors, hospitals, and other medical providers. But this premise comes with an important corollary: Funding all medical providers’ care through a single source means that source—the federal government—must pay those providers the right amount. Paying providers too much wastes taxpayer resources; paying them too little could cause them to close.

The Rural Wage Index and MRI Counting

Consider, for instance, the regulation governing Medicare inpatient hospital payments for 2020, which the Centers for Medicare and Medicaid Services (CMS) released on Friday, August 2. That 2,273-page regulation—no, that’s not a typo—included major changes to Medicare payment policies.

Most notably, the final rule changed the Medicare hospital wage index. For years, hospitals in rural areas have complained that the current wage index exacerbates wage disparities, under-paying hospitals in low-wage and rural areas, while over-paying hospitals elsewhere. According to CMS, the final rule increased the wage index for many rural hospitals, while slightly reducing payment rates to other hospitals, because CMS must implement the change in a budget-neutral manner.

Consider also a comment made several years ago by Donald Berwick, former CMS administrator and a strong advocate of single-payer health care. In a 1993 interview, Berwick said that “I want to see that in the city of San Diego or Seattle there are exactly as many MRI units as needed when operating at full capacity. Not less and not more.”

‘Little Intellectual Elite’

I don’t know whether the wage index change represents a more accurate way of calculating hospital payments, although I suspect it will make some hospitals’ payments more accurate, and some less accurate. But I don’t presume to know the financial situations of each of the United States’ thousands of hospitals, let alone believe I can calculate the change’s effects for each of them.

Conversely, liberals have the arrogance, even hubris, to believe that a massive—not to mention costly—federal bureaucracy can track and micro-manage the health care system to near-perfection. Remember, this is the same federal government that but a few years ago couldn’t build a website for Obamacare. As Ronald Reagan famously said in his “A Time for Choosing” speech 45 years ago:

This is the issue of this election: Whether we believe in our capacity for self-government or whether we abandon the American Revolution and confess that a little intellectual elite in a far-distant capital can plan our lives for us better than we can govern ourselves.

Berwick, and his fellow single-payer supporters want to place our health care system in the care of that intellectual elite—although, given the size of our health care system, the bureaucracy needed to control it may prove far from “little.” (But hey, they’re from the government and they’re here to help.)

Invitation to Corruption

Four years ago, federal prosecutors obtained an indictment of Sen. Robert Menendez (D-NJ) on bribery charges, for accepting campaign contributions and other gifts from Miami physician Salomon Melgen. Among other things, Menendez repeatedly contacted Medicare officials and asked them to stop seeking $9 million in repayments from Melgen, who was eventually convicted on 67 counts of Medicare fraud.

A U.S. senator receiving nearly $1 million in gifts from a Medicare fraudster seems shocking enough. But increasing the federal government’s influence over health policy will make scenarios like this even more likely—and will make things like hospitals’ yearslong lobbying over the wage index seem like small potatoes.

In “Federalist 51,” James Madison famously wrote that “In framing a government which is to be administered by men over men, the great difficulty lies in this: You must first enable the government to control the governed; and in the next place oblige it to control itself.” Single-payer supporters’ obsession over the former, to the exclusion of the latter, bodes ill for any supposed “efficiency gains” resulting from single payer—to say nothing of the integrity of our government.

This post was originally published at The Federalist.

Another Chart Shows How You Will Lose Your Current Coverage

Ahead of this week’s round of Democratic presidential debates, former vice president Joe Biden continued his attacks on Vermont Sen. Bernie Sanders’ single-payer health plan. Biden said it would undermine people currently receiving coverage through Obamacare.

In response, Sanders’s campaign accused Biden of using “insurance company scare tactics.” This week’s debates will see similar sets of allegations. Opponents of immediate single-payer will attack the disruption caused by a transition to socialized medicine, while supporters call single-payer skeptics pawns of the insurance companies, pharmaceutical companies, or both.

But the dueling sets of insults amount to little more than a sideshow. As these pages have previously argued, most Democrats ultimately want to get to a government-run system—they only differ on how quickly to throw Americans off their current health coverage. A series of recently released figures provide further proof of this theory.

200 Million Americans on Government-Run Health Care

Last week, the Center for American Progress (CAP) released some results of an analysis performed by Avalere Health regarding their “Medicare Extra” proposal. That plan, first released in February 2018, would combine enrollees in Medicaid and the Obamacare exchanges into one large government-run health plan.

Under the CAP plan, employers could choose to keep their current coverage offerings, but employees could “cash-out” the amount of their employer’s insurance contribution and put it towards the cost of the government-run plan. Likewise, seniors could convert from existing Medicare to the “new” government-run plan.

More to the point: The study concluded that, within a decade, nearly 200 million Americans would obtain coverage from this new, supercharged, government-run health plan:

As the chart demonstrates, the new government-run plan would suck enrollees from other forms of coverage, including at least 14 million who would lose insurance because their employer stopped offering it. By comparison, Barack Obama’s infamous “If you like your plan, you can keep it” broken promise resulted in a mere 4.7 million Americans receiving cancellation notices in late 2013.

Neither Plan Is a Moderate Solution

Whether 119.1 million Americans losing their private coverage, or 200 million Americans driven onto a government-run plan, none of these studies, nor any of these supposedly “incremental” and “moderate” plans, shows anything but a massive erosion of private health care provision, and a massive expansion of government-run health care.

Case in point: Earlier this year, Reps. Rosa DeLauro (D-Conn.) and Jan Schakowsky (D-Ill.) introduced a version of the CAP plan as H.R. 2452, the Medicare for America bill. As I wrote in June, the version of the legislation reintroduced this year completely bans private health care.

Under their legislation, individuals could not just pay their doctor $50 or $100 to treat an ailment like the flu or a sprained ankle. The legislation would prohibit—yes, prohibit—doctors from treating patients on a “cash-and-carry” basis, without federal bureaucrats and regulations involved.

Whether the Medicare for America bill, the CAP proposal, or Biden’s proposal for a government-run health plan, all these plans will eventually lead to full-on socialized medicine. Sanders has the wrong solutions for health policy (and much else besides), but at least he, unlike Biden, wins points for honesty about his ultimate goals.

This post was originally published at The Federalist.