Heath Care Law Must Be Reworked
Posted on April 11, 2010
The new health-care law is an historic mistake.
The fundamental mistake is cost — expanding a health-care delivery system that everyone knows is too expensive, instead of reducing its cost so more Americans can afford health insurance.
Another mistake is taxing job creators — employers, individuals and investors — in the middle of a recession. And unlike Social Security, Medicare and civil-rights legislation, the only thing bipartisan about it is opposition to it.
Here is what the new law will mean for Tennesseans:
• Each Tennessean's share of the national debt will increase when you include the cost of paying doctors to serve Medicare patients.
• The government will spend $8,470 more on health care for every Tennessean (and every American).
• 243,000 Tennesseans enrolled in Medicare Advantage will have benefits reduced, according to the nonpartisan Congressional Budget Office. And the half trillion dollars in Medicare cuts are used to pay for new programs, not to make Medicare solvent. Medicare will become insolvent in 2015, according to its trustees.
• About 1.4 million Tennessee households making less than $200,000 will pay higher taxes, based on estimates by the Joint Committee on Taxation.
• Premium rates will rise 30 to 45 percent for 300,000 Tennesseans who buy individual policies, based on a Blue Cross/ Blue Shield study and other analyses.
• Tennessee businesses employing 50 or more people will pay either higher health-care costs or a new penalty.
• The federal government will overcharge 200,000 Tennesseans with student loans by an average of $1,700 to help pay for health care and other government programs. This July 1 Washington takeover of the student loan program will deprive these students of choices, increase the federal debt by another half trillion dollars, and throw out of work 700 Tennesseans who now help students apply for loans.
• Premiums will rise up to 35 percent for the youngest 30 percent of Tennesseans, according to a study by Oliver Wyman.
Of course, in this 3,000-page law there are good provisions, such as insurance reforms: There will be a high-risk pool for some with pre-existing health conditions, insurance companies will not be able to deny insurance to children who are sick, and if your child lives with you until age 26, he or she can stay on your policy. These reforms were also in Republican proposals.
The largest new benefit, beginning in 2014, is making 200,000 more low-income Tennesseans eligible for Medicaid (TennCare). But, nationally, doctors are so poorly reimbursed that 50 percent won't see new Medicaid patients, so expanding Medicaid is like giving someone a ticket to a bus that operates only half the time.
Unfortunately, Medicaid expansion is not likely to keep hospital emergency rooms from filling up. Nationally, Medicaid patients use emergency rooms at twice the rate of either uninsured or privately insured Americans. And Congress expanded Medicaid without paying for all of it. Gov. Phil Bredesen says this will cost Tennessee $1.1 billion or more between 2014 and 2019. It is likely to force state tax increases and drive tuition through the roof when state support for colleges is cut to pay for TennCare expansion.
We should replace this law with one that reduces health-care costs. (We have time to do this because most benefits and subsidies in the law don't start until 2014.) The new law should start with immediate insurance reforms. Then it should reduce costs step-by-step: for example, we should allow buying insurance across state lines; permit small businesses to join together to offer cheaper insurance to employees; limit junk lawsuits against doctors; reduce waste, fraud and abuse; and expand health savings accounts. Republicans repeatedly urged these steps last year.
The wisest course now is to replace the new health-care law with immediate insurance reforms and step-by-step reductions in health-care costs so that more Americans can afford to buy insurance.