Patterico's Pontifications

10/7/2009

ObamaCare: The Senate’s 201 Billion Dollar Question

Filed under: General — Karl @ 7:38 pm



[Posted by Karl]

Everyone in Washington and the wonkosphere seemed to be waiting for the CBO’s preliminary analysis of the Senate Finance Committee version of ObamaCare — and were relieved (on the Left) or freaked out (on the Right) that it suggested it may reduce the deficit by $81 billion. However, no one ever convinced me that any of the amendments were going to significantly increase the costs of the original Baucus proposal. Had the final product generated red ink, the number would have been small enough to be fixed by Baucus with a minor tweak or two.

If people want to focus on the fact that the Finance Committee does not have legislative language for the CBO to score, I guess that’s okay. If Peter Suderman wants to remind us that the Medicare cuts designed to pay for much of the bill’s tab are not going to happen, I guess that’s okay, too — though he admits that criticism will have a hard time getting any political traction in the Senate.

It might be more useful to look at the fact that the CBO’s preliminary estimate, with its cost-bending deficit numbers, relies on $201 billion in revenues from an excise tax on high-premium insurance plans. However, today, more than 150 House Democrats sent a letter to Speaker Nancy Pelosi opposing a new tax on expensive insurance plans. While the letter is supposedly concerned with any such tax eventually hitting middle-income Americans, the reality is that these House Dems are acting at the behest of their Big labor masters, which means they are (ahem) unlikely to change their minds on the issue. Indeed, a White House that was willing to take over much of the US auto industry to save the UAW is probably not keen on tax, either.

Moreover, the other Senate bill (Kennedy-Dodd, HELP) does not specify what spending will be cut or what taxes will be raised to pay for the increased spending. That was the job of the Finance Committee. And the House bills rely on larger cuts to Medicare and Medicare Advantage, which are (as noted above) imaginary, but will nevertheless tend to scare the Hell out of Seniors who already oppose ObamaCare and are more likely to vote in midterm elections. The GOP has already signaled that it plans to hit the Dems hard on these points if and when a bill reaches the Senate floor.

So the 201 billion dollar question is when the Democrats are going to decide whether to soak seniors or their union base to pay for their government takeover of the US healthcare system.

–Karl

40 Responses to “ObamaCare: The Senate’s 201 Billion Dollar Question”

  1. This bill resembles Samuel Johnson’s example of second marriages; “a triumph of hope over experience.” There is no reason to believe that any of the difficult choices, like Medicare cuts, will ever happen. The US political class is simply unable to do any heavy work. Both parties.

    Mike K (2cf494)

  2. We have to spend a trillion dollars to cut the deficit. You can’t argue with the math. You can try maybe but math is bigger and it fights dirty.

    happyfeet (6b707a)

  3. Ok, So why not a strong public option, which is cheaper?
    You’re discussing Baucus’ Big Labor wants something better.
    Talk to your friend Mike, he likes Switzerland and so does big labor and so do I.

    bored again (d80b5a)

  4. Good post Karl.

    I wonder if folks like Myron and bored again will ever acknowledge the health care reform experiments already tried in so many states and the after effects as they pimp for their favorite bill. They always seem to ignore that we’ve tried most of the shit being floated by the Dems before and they can see what happens if they want to take a look. Shoot, you even provide a bunch of links to make it easy for them.

    daleyrocks (718861)

  5. Wrong thread – I’ll put it in the right one.

    daleyrocks (718861)

  6. The Swiss system is not all that cheaper than the current US system, despite having a much smaller, more homogeneous population.

    Karl (246941)

  7. Ok, So why not a strong public option, which is cheaper?

    The Senate Finance Committee considered two versions of a government option, one sponsored by Rockefeller and one by Schumer. They voted both down. Why?

    Stu707 (0981d5)

  8. “new tax on expensive insurance plans.”

    Man, ain’t that just a gut-buster? Their plan for making health care more affordable is to first make it more expensive.

    Only in D.C.

    Nuance. Or something. Oh, no, wait…”FOR THE CHILDREN!”

    Steve B (5eacf6)

  9. “The Senate Finance Committee considered two versions of a government option, one sponsored by Rockefeller and one by Schumer. They voted both down. Why?”

    Because the public option is cheaper but EVIL.
    There’s no other explanation.

    bored again (d80b5a)

  10. This idea that a public option is “cheaper” s humorous. Can I subscribe to your newsletter?

    JD (ce1a92)

  11. But that’s the kind of fraud that Democrats, and bored again, are engaging in. Outright fabrications are the currency of the Democrats healthcare “arguments”. We’ve seen Obama repeatedly assert costs savings that are fantasies.

    Now we see that the Democrats get a “score” from CBO by including Medicare cuts that will never happen.

    It is just brazen fraud.

    SPQR (26be8b)

  12. Will the Dems piss-off Big Labor, or AARP?
    If the Big Labor sits on its’ hands, the Dems will take a big electoral hit when all of that free, “volunteer” labor never shows up for the campaign;
    If they piss-off Seniors, those here-to-fore reliable Dem votes could very well go GOP.
    My Bet: They stick with Big Labor, and stick-it to the Seniors – who will find out that AARP is just another Dem shill.
    Anyway, if ACORN can survive, the Dems will still get the Senior vote…you’d be surprised how many times you can still vote after SS stops sending those checks ’cause you died.

    AD - RtR/OS! (814db9)

  13. The Medicare cuts that they are deceptively proposing are aimed straight at seniors. If AARP is not objecting, it shows how much in the partisan tank AARP is and how easily AARP will screw its membership for Democrat brownie points.

    Not that that is news.

    SPQR (26be8b)

  14. Because the public option is cheaper but EVIL.
    There’s no other explanation.

    I’ll treat the “evil” comment as sarcasm. Please tell me why you think the government option would be cheaper.

    Stu707 (0981d5)

  15. Another reason not to trust these bogus CBO “scores” is that the Democrats are brazen in their cheating. We learned this week that the Democrats in the House made secret changes later to the legislation that was voted out of a House committee.

    They just cheat.

    SPQR (26be8b)

  16. No question–the Democrats will stick it to the seniors, and stick with the Unions. After all, if they take medical care away from seniors, eventually there will be fewer seniors to treat. Problem solved.

    Rochf (ae9c58)

  17. “Speaker Nancy Pelosi (D-Calif.) will submit multiple versions of the House’s healthcare bill for cost estimates, she announced on Thursday.
    The first proposal will include a “robust public option,” which would tie doctor reimbursement rates to that of Medicare plus five percent. The remaining two drafts submitted for the Congressional Budget Office’s consideration would include a public option based on “the negotiated rates that some in our caucus have supported and which was passed by the Energy and Commerce Committee,” the speaker explained during Thursday’s press briefing.”

    As Duncan Black says: “The self-proclaimed fiscal conservative are going to Suck. On. This.”

    You all forget your arguments week by week. The biggest conservative argument against the “robust” public option is that it would have an unfair advantage, that it would be cheaper to run and offer more for less. Read the GOP press releases on the issue. Obama being a coward has pushed for weakened bills that save less money and make less sense, all in order to get something passed.
    And JD I’ll refer all your comments to SEK. He has more patience with your lies than I do.

    OECD Report Total Health Expenditures Per Capita, U.S. and Selected Countries, 2003
    US: $5711
    Switzerland: $3847
    http://www.kff.org/insurance/snapshot/chcm010307oth.cfm
    If you don’t like the Swiss then try the French or Japanese.
    At least you’re linking to a real discussion of the issue.

    bored again (cac82b)

  18. How do you plan on cutting costs, dekivering increased quality, increased access, and adding 30,000,000+ people to the demand side, all while maintaining deficit neutrality? This should be a simple question.

    JD (c87796)

  19. The idea that any of this will “save” money is laughable. Were that the case, it should be able to be demonstrated by actually doing so with the existing Medicare, VA, Indian healthcare system, etc …

    JD (c87796)

  20. The biggest conservative argument against the “robust” public option is that it would have an unfair advantage, that it would be cheaper to run and offer more for less. Read the GOP press releases on the issue.

    What conservative said that it was cheaper and offers more for less.

    He has more patience with your lies than I do.

    But you’re a liar.

    Gerald A (138c50)

  21. The only way any govt sponsored/administered plan would be cheaper for the consumer than an insurance company administered plan is because the govt will provide it at a loss, driving the insurance companies out of the business. Of course, the difference between what will be paid for the plan, and what its’ actual costs are, will just be added to the deficit, which is already financing the shortfall in Social Security and Medicare (you’ve got to just love those unfunded future liabilities).
    The Trust-Busters in Justice would be all over this like white-on-rice if this weren’t a govt program, just as the SEC would never allow a Ponzi scheme such as SocSec if not ditto.
    If this doesn’t drive everyone off of the Dollar, I don’t know what will.
    I wonder what the +/- is on when mortgage rates race past what we had to pay under Jimmah?
    This generation that never knew the Stagflation of the late-70’s is in for a very severe shock.

    AD - RtR/OS! (814db9)

  22. You all forget your arguments week by week. The biggest conservative argument against the “robust” public option is that it would have an unfair advantage, that it would be cheaper to run and offer more for less. Read the GOP press releases on the issue. Obama being a coward has pushed for weakened bills that save less money and make less sense, all in order to get something passed.

    We don’t forget our arguments week to week. The arguments that we actually make as opposed to those some allege we make respond to the various challenges that change from time to time.

    I asked you why you think a government run health care plan in the US would be cheaper than privately run plans. You replied that Switzerland’s annual per capita health expenditures are $3847 vs $5711 for the US.

    What cuts would a robust government health plan make that would result in a reduction of $1846 in our annual per capita health care expenditures?

    Stu707 (0981d5)

  23. “You all forget your arguments week by week. The biggest conservative argument against the “robust” public option is that it would have an unfair advantage, that it would be cheaper to run and offer more for less.”

    Completely false claim on your part, bored again.

    Since you like context-free anecdotes, the British Medical Journal published a study that concluded that a US HMO, Kaiser Permanente, provided better care to its patients at the same cost as Britain’s NHS.

    SPQR (26be8b)

  24. Cato…well, that’s going to be as popular as a turd in a punch-bowl.

    AD - RtR/OS! (814db9)

  25. They are spinning so much that congress looks like a toilet, It seems a bit myopic for them to just toss out their credibility like this… And this is what, the 4th time?

    All the BS about $ won’t matter much, we won’t have doctors. Many will retire. I asked my doctor, she said it won’t make that much difference to her, but she thinks it’s bad for patients. She can just go back to her own country if the bill passes, which already has something of the sort. She is from the Philippines, and a very good doctor.

    At $35 a whack the remaining doctors will have to jam many more patients into a day to make ends meet, which adds up to long waits for short visits.

    But what worries me most is the mandate. If they can mandate this, what can’t they mandate? I really don’t know, I’m asking. The mandate seems to me the clear turning point between government “of the people” and government ruling the people.

    jodetoad (059c35)

  26. “But you’re a liar.”
    So you say…

    heritage.org/Research/healthcare/bg2311.cfm
    “The Public Health Insurance Option: Unfair Competition on a Tilting Field”

    online.wsj.com/article/SB125286552896406655.html
    “Mr. Obama and many Democrats had initially pushed for the inclusion of a government-run insurance option in health-care legislation making its way through Congress. But critics, including Republicans and insurance companies, oppose the idea, arguing that such an option would pose unfair competition to private plans and could lead to an eventual government takeover of the health-care system.”

    bored again (d80b5a)

  27. bored again, you are really so clueless that you don’t understand the articles you cite and how they differ from your misrepresentations of conservative arguments? The Heritage piece explains exactly why the public option is viewed as unfair competition to private insurance. Arguments you evidently don’t understand from your misrepresentations.

    This isn’t the first time you’ve cited to articles that don’t say what you claim, bored again. Its why you have no credibility here.

    SPQR (26be8b)

  28. ba’s habit of using cited articles that don’t prove its’ claims is earily familiar to past commenters who have disappeared from this site, either voluntarily or otherwise.

    AD - RtR/OS! (814db9)

  29. Yep, AD.

    An example from the Heritage piece:

    The government plan could charge less than its costs because the U.S. taxpayer–initially, lenders to the federal government–could be tapped. Private plans do not have the ability to lower prices below cost and tax the taxpayer to make up the difference. The resulting taxpayer subsidies to the government plan could easily make Fannie Mae and Freddie Mac look like careful and disciplined actors in the mortgage market.[23] Furthermore, unlike the proposed government plan, they were not even government agencies when they were bailed out.

    SPQR (26be8b)

  30. The strong public option IS CHEAPER
    nationaljournal.com/congressdaily/cda_20090925_6347.php

    We spend more for less. Compare to any other modern country.
    Now if you want to say that the US is populated by nutjobs and loons and that we’re incapable of actually running a program that would work, because we’re Americans…
    that’s another story.
    That may be true.

    bored again (d80b5a)

  31. ZOMFG ! He said it in all caps so it must be true !

    JD (b8912c)

  32. Except: “…The numbers are based on oral communications between CBO staff and Pelosi’s office, a Pelosi spokesman said. They do not represent an official CBO estimate….
    The public plan saves money because it pushes down premium prices. Lower premium prices across the country would mean the government would have to pay less in subsidies to low-income people who buy insurance through the exchange, according to CBO. Medicare rates are typically lower than those paid by private insurers, so using that formula would allow the public plan to charge considerably lower premiums to stay solvent. If the government has to negotiate the same way insurance companies do, public plan premiums likely won’t be as low — hence less savings…

    The problem is here is that this article is practically a P-R release from the Speaker’s office. There are no real numbers from the CBO because the Speaker refuses to release hard numbers that they could analyze.

    AD - RtR/OS! (814db9)

  33. bored again, repetition only emphasizes your cluelessness about the issue. Another link you don’t understand ( and can’t even copy competently ).

    SPQR (26be8b)

  34. “We spend more for less. Compare to any other modern country.”

    bored – Who says we get less? Those rigged U.N. surveys, gimme a break. When people stop coming here from all over the world for medical treatment maybe I’ll believe you.

    On the spending more bit, how do those figures relate to per capita GDP?

    daleyrocks (718861)

  35. Or for that matter, daleyrocks, do the figures exclude luxury health care spending like plastic surgery? Something that the more incompetent trolls like bored again have no clue about.

    SPQR (26be8b)

  36. It’s not that we forget the arguments against the public option, but bored’s inability to understand them.

    A public option would unfairly compete by exempting itself from existing state insurance regs (as HR 3200 provides), by hiding its administrative costs in the general federal budget (as other federal health programs already do), by having the implicit guarantee that it won’t be allowed to fail (as we saw with Fannie Mae and Freddie Mac), and by being granted the power to engage in price-fixing that would drive up premiums in what gets left of the private market (as Medicare has done for decades).

    As for Switzerland, as per my prior link, the US spends 15.3% of GDP while the Swiss spend 11.6%, accordingto OECD. Bored doesn’t even try to reconcile that with the figures from KFF (an advocacy group) to figure out how those per capita figures got calculated. Moreover, bored failed to notice that the rate of spending growth in the US and Switzerland has been identical since 1990.

    Karl (246941)

  37. “…Bored doesn’t even try…failed to notice that the rate of spending growth…”

    He never got the memo from D-Kos.

    AD - RtR/OS! (814db9)

  38. Now if you want to say that the US is populated by nutjobs and loons and that we’re incapable of actually running a program that would work, because we’re Americans…
    that’s another story.

    Well Bored, the USG has been running a health program for Indians for 200 years. It has been running a health program for veterans at least since WWII.Some states have tried running public programs. You have been challenged to comment on how successful these programs have been at controlling costs and providing quality health care. What do you say?

    Stu707 (0981d5)

  39. […] for the bill. The Baucus plan to raise $201 billion from a tax on high-premium insurance plans is a non-starter with House progressivesand Big Labor, and opposed by Sen. Jay Rockefeller (and Sen. Robert Byrd, in […]

    The Greenroom » Forum Archive » ObamaCare: The Back Room (e2f069)


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