H.R.3200: America’s Affordable Health Choices Act of 2009

Obama Flip-Flops on Cadillac Tax

Amish families exempt from insurance mandate

Federal health care reform will require most Northern New Yorkers — but not all, it turns out — to carry health insurance or risk a fine.

Hundreds of Amish families in the region are likely to be free from that requirement.

The Amish, as well as some other religious sects, are covered by a “religious conscience” exemption, which allows people with religious objections to insurance to opt out of the mandate. It is in both the House and Senate versions of the bill, making its appearance in the final version routine unless there are last-minute objections.

Although the Amish consist of several branches, some more conservative than others, they generally rely upon a community ethic that disdains government assistance. Families rely upon one another, and communities pitch in to help neighbors pay health care expenses.

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Irate Labor Leaders Press Obama on Proposed Health Care ‘Cadillac’ Tax

President Obama told labor leaders in a tense two-hour closed door tussle over whether to tax health care benefits that he backed the tax, which labor leaders vehemently oppose, but also supports efforts “to protect working men and women.”

Their problem? Labor leaders say you can’t have it both ways. Some now openly accuse Obama of doing that and violating one of his most important early promises in the health care debate: that if you like the coverage you have, you will be able to keep it.

Obama did not attend all of the meeting held in the Roosevelt Room, but, according to an official who spoke on the condition of anonymity “reiterated his support for the excise tax but also reiterated his commitment to protect working men and women.”

Obama’s top health care adviser, Nancy-Ann DeParle led the meeting in the president’s absence, the White House said.

The “excise tax” refers to the Senate attempt to slap a 40 percent levy health insurance benefit plans valued at $8,500 for individuals and $23,000 for families (for high-risk occupations like law enforcement and firefighting the levels are $9,850 and $26,000).

Some have dubbed these plans “Cadillac” coverage because of their generous array of benefits. Labor leaders say the better moniker is “Chevy” because, they say, the tax would also hit union and non-union families. The tax applies to the accumulated value of standard health insurance, secondary plans that cover dental and vision expenses and flexible spending accounts.

But labor leaders, led today publicly by AFL-CIO President Richard Trumka, call the Senate tax an assault on middle-class familes and a sop to American “elites.” Trumka and other union leaders favor the House-passed 5.4 percent surtax on individuals making more than $500,000 and couples who earn more than $1 million.

“The senate bill instead drives a wedge between the middle class and the poor,” Trumka said in a speech at the National Press Club just hours before the White House showdown. ” The senate bill taxes the middle class by taxing workers health plans. The Senate bill pits working Americans who need health care for their families against working Americans trying to keep health care for their families. Now this is a policy designed to benefit elites.”

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Harrycare Breaks the Bank

On Friday, the Chief Actuary for the Centers for Medicare and Medicaid Services (“CMS”) released his report on the estimated financial impact of the Senate’s health care bill passed on Christmas Eve on a party-line vote. Unlike the Congressional Budget Office’s score estimating the bill would reduce the deficit over the first ten years, CMS estimates that the measure will add $280 billion to the federal deficit from 2010-2019.

Like the CBO score, CMS’s estimate largely masks the true cost and cynicism of the bill because non-partisan government agencies have little room to make assumptions outside of the pure text of the proposed legislation. However, even more aggressively than the CBO’s commentary, the CMS actuary offers harsh words and stern warnings about this bill’s true likely cost and crowd-out effects on the private insurance market.

The costs and so-called savings in Harrycare, officially titled the Patient Protection and Affordable Care Act (“PPACA”) are broken down into 2 major categories: Coverage and Medicare, the former representing government costs and the latter theoretically representing savings. There are smaller categories for Medicaid/CHIP (separate from the expansion of Medicaid which falls under Coverage), and the Community Living Assistance Services and Supports (“CLASS”) program. The provisions for each category are a minefield of uncertainty, with real-world outcomes likely to cost the taxpayer far more than any current government estimate.

Regarding “Coverage,” CMS estimates that the measure will “reduce the number of uninsured from 57 million under current law to 23 million” primarily by increasing eligibility for Medicaid. What this does is shift the cost burden from the federal government to cash-short states. It’s an accounting gimmick, not a cost savings.

And there are not 57 million uninsured Americans by any definition that an objective analyst would accept. The majority of the uninsured are typically either (1) in between jobs and uninsured for a single digit number of months, (2) wealthy enough or with high enough incomes to afford insurance if they wanted it, or (3) already eligible for government programs but not signing up.

CMS estimates that 18 million people would receive new coverage under Medicare with a further 2 million who have employer-based insurance signing up for Medicaid as supplemental insurance. They also estimate that 21 million people will receive coverage “through the newly created Exchanges.”

Crowding out private insurance (the Democrats’ real goal), CMS guesses that 15 million people will drop their current individual health insurance policies to join an Exchange. Furthermore, the report notes that “some smaller employers would be inclined to terminate their existing coverage, and companies with low salaries might find it to their — and their employees’ — advantage to end their plans, thereby allowing their workers to qualify for heavily subsidized coverage through the Exchanges.”

In other words, currently-private insurance costs will suddenly be borne in large part by taxpayers.

In total, “Coverage” costs total $882 billion during the 10-year analysis window. Of utmost importance to understand, however, is that the key coverage provisions don’t begin until the fifth year (2014), and that the 6-year cost from 2014 to 2019 is $875 billion. In other words, more than 99% of the coverage costs occur in years 5-10, meaning that if the coverage provisions were begin at the same time as the tax increases and mythical “savings”, the cost of the bill would be roughly $250 billion higher.

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Economist Was Under Contract With HHS While Touting Health Reform Bill

MIT economist Jonathan Gruber, one of the leading academic defenders of health care reform, is taking heat for failing to disclose consistently that he was under contract with the Department of Health and Human Services while he was touting the Democrats’ health proposals in the media.

Gruber, according to federal government documents, is under a $297,600 contract until next month to provide “technical assistance” in evaluating health care reform proposals. He was under a $95,000 HHS contract before that.

But while he was being paid to provide his services to HHS, he was also fending off health care reform critics in the media. Gruber was one of the prominent analysts to rebut an insurance industry report from PricewaterhouseCoopers in October saying premiums would shoot up if a health care bill passes. And he has recently written columns defending specific provisions in the House and Senate bills, particularly the “Cadillac tax” on high-cost insurance plans.

The liberal base of the Democratic Party is widely opposed to that tax, out of fear that it will cut into union benefits — which may explain why the first criticism of Gruber came out of liberal blogs.

“I have never seen it disclosed that he was a paid consultant to the Obama administration,” a blogger for Firedoglake wrote Friday morning. “For months I have been angry with Gruber because I thought he was simply an exaggerator whose dangerous love of the spotlight was hurting the efforts of progressives to make sure the Senate bill adopted more progressive cost control solutions. … Now it is clear something much more sinister was at play.”

The Daily Kos declared that, given Gruber’s contract, the “fix was in” for the Cadillac plan.

Gruber, when contacted by Fox News, acknowledged that he has a contract with HHS, but he said it has nothing to do with his public advocacy.

“NONE of the work I have done in public, or any public declarations I (have) made, has been in any way funded by the administration,” he wrote in an e-mail. “That funding was strictly for internal work that I did for the administration and, via the administration, for Congress. All externally visible work and comments, such as my editorials or public reports, have been done on my own time.”

Gruber said he “firmly” believes in the positions he advocates, and he said he has not been secretive about his contract with HHS. “I have told reporters whenever they asked,” he said.

He noted that he disclosed his relationship with the Obama administration in a Dec. 24 column for The New England Journal of Medicine. Indeed, the “disclosures” link at the bottom of that article online takes the reader to a form showing Gruber is a “paid consultant to the Obama administration.”

But a column in The Washington Post on the Cadillac tax just a few days later did not disclose his relationship with the administration. Gruber was listed merely as a “professor of economics at the Massachusetts Institute of Technology.”

Government documents explaining the terms of his contract say that he was “uniquely positioned” for providing analysis for the health department’s assistant secretary for planning and evaluation, describing him as a “recognized expert in health policy in economics.”

Health Care Countdown: Differences Over Abortion Funding Pose Hurdle

The House and Senate, entering what may be the final weeks of health care talks, are still struggling to come up with a compromise that will settle disagreements over how best to ensure public dollars do not go toward funding abortion coverage.

Middle ground is hard to come by on the issue of abortion, and the health care debate is no exception.

The House and Senate, entering what may be the final weeks of health care talks, are still struggling to come up with a compromise that will settle disagreements over how best to ensure public dollars do not go toward funding abortion coverage.

The bills in both chambers are distinctly different when it comes to abortion funding. The House sets up a veritable brick wall between taxpayer funds and abortion providers. The Senate, critics say, provides too many openings for public money to fund abortion.

“There’s either funding for abortions or there isn’t,” said Charmaine Yoest, president of Americans United for Life. “There really isn’t a middle ground on the issue.”

A big problem in resolving the dispute is that the Senate is already on record opposing the kind of strict provisions that House Speaker Nancy Pelosi needed in her bill in order for it to pass.

Pelosi, an abortion rights supporter, was only able to pass a health care bill after allowing a vote on tough abortion language sponsored by Michigan Democratic Rep. Bart Stupak.

The move won her 40 Democratic votes she easily could have lost if the restrictions had not been included. Even with them, the House bill only passed by five votes, leaving little room for compromise.

Yet anti-abortion forces in the House are not happy with the Senate bill, which has looser restrictions. The package would require that insurance companies segregate any federal subsidies so that only private funds from customers are used for abortion coverage. It would also have companies charge a specific fee dedicated for abortion coverage, which has angered some groups.

In addition, at least one plan in the state-by-state insurance exchanges would have to offer abortion coverage, unless a state individually opts out — which isn’t easy.

“Each state, if they want out of the abortion mandates that are in the Senate plan, would have to pass their own laws to get out of funding abortion,” Yoest said.

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Health Care Countdown: Critics Question Dems’ Claim That Health Bill Reduces Deficit

The Obama administration and congressional Democrats are claiming mission accomplished in their quest to strike a health care reform bill that doesn’t add a “dime” to the deficit. But critics say the House and the Senate are relying on massaged numbers and unrealistic projections that only achieve that goal on paper.

But critics say the House and the Senate are relying on massaged numbers and unrealistic projections that only achieve that goal on paper. If and when Congress carries out the overhaul, they say, the red ink could easily pile up.

“There’s a number of things that make that highly implausible, dubious really,” said Jim Capretta, a fellow at the Ethics and Public Policy Center.

The Congressional Budget Office is required to score what Congress says it will do without regard to whether lawmakers will actually achieve their goals. So when Democratic leaders told the CBO they’d raised hundreds of billions in revenue and cut $500 billion from Medicare over 10 years, the CBO said that course of action would reduce the deficit by more than $130 billion.

But the calculation assumes Congress will cover the uninsured by expanding Medicaid, increasing costs to cash-strapped states. And Congress double-counts savings in Medicare by saying changes would extend the life of the program but also spending the money elsewhere.

Douglas Holtz-Eakin, former director of the Congressional Budget Office, said Congress is trying to both extend the life of Medicare while using the savings for subsidies.

“You literally can’t spend the same dollar twice — it’s a congressman’s dream but that won’t work,” he said.

Congress also removed another expensive reform called the “doctor fix,” which is a proposal to undo one of Congress’ previous efforts to reduce Medicare spending. As it stands, doctors who treat the elderly would face a 21 percent cut in fees this year and steady cuts every year after that. Lawmakers agree that could reduce access to doctors for seniors, so they’re determined to fix it – only not in the health care reform bill.

“The biggest hole in the financing is the fact that they’ve left out the doctor fix,” Holtz-Eakin said.

“If you take that out, just that one on its own and take it out of the equation, the bill goes from being a small deficit reducer to being a large deficit increaser,” Capretta said.

The doctor fix would push health care reform into the red because it would cost $210 billion. The Senate has not acted on the issue yet — the House passed it separately but simply added the cost to the deficit which troubles Democratic centrists.

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Nelson: Obama Made a ‘Mistake’ by Tackling Health Care ReformLast Year

Sen. Ben Nelson, the Nebraska Democrat who played a pivotal role in helping the Senate pass its version of health care reform right before Christmas, said this week that the Obama administration should have delayed taking up the issue to spend more time tackling economic problems.

“I think it was a mistake to take health care on as opposed to continuing to spend the time on the economy,” Nelson told the Fremont Tribune.

“I would have preferred not to be dealing with health care in the midst of everything else, and I think working on the economy would have been a wiser move,” he told the newspaper.

Ever since Nelson provided Democrats with the crucial 60th vote to advance the Senate bill toward passage last month, he has been trying to explain his actions to his constituents — a move that underscores the challenge Nelson faces in maintaining public support in a conservative state.

The deal Nelson cut with Senate Democratic leaders to gain his critical vote would exempt Nebraska from having to pay for the coverage of new enrollees into its Medicaid program and leave the tab with the federal government — a move expected to cost Uncle Sam $100 million over the next 10 years.

Several attorneys general are threatening to challenge the constitutionality of that provision that they say benefits Nebraska at the expense of other states.

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Pelosi: Lawmakers ‘Very Close’ on Health Care

Lawmakers are “very close” to resolving differences between the House and Senate health care bills and sending a final version to President Obama, House Speaker Nancy Pelosi said Wednesday.

Pelosi spoke at the White House after a meeting Wednesday with Obama and the chairmen of several House committees that have had a hand in shaping the House version of the bill.
Differences remain, including over abortion and whether to create a public option for health insurance.

Pelosi, however, said both bills had the makings for great legislation.

The president and congressional Democrats decided Tuesday night to keep the final negotiations as GOP-free as possible by bypassing the traditional conference committee process.

The White House and Democratic leaders in Congress decided to keep the last leg of talks a closed-door affair. They concluded that the House will work off the Senate’s version, amend it and send it back to the Senate for final passage, according to a House leadership aide, speaking on condition of anonymity in order to discuss the private meeting.

The move streamlines the process to avoid Republican efforts to slow it down.

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