Analyzing the House Health Care Bill

The Democrats finally unveiled their health care bill in the House. The CBO has a detailed analysis. According to the CBO, this bill will cost just over $1 trillion over the next ten years and by then 97% of all LEGAL Americans will have some sort of health care coverage. The Democrats propose to pay for this with incremental tax increases on the wealthy starting with those making $350,000 and more. The biggest hit will come to those making $1 million and more. Those folks will see a tax increase of 5.4%.

The bill will attempt to create universal coverage by several different methods. First, they will increase the income cap for Medicare. Starting in 2013, anyone making 400% of the poverty line would be eligible for Medicare. Furthermore, the break point for Medicaid will jump to 133% of the poverty line in the same year. Furthermore, in the same year, the government would mandate that every individual be covered in that same year. Anyone not covered would be subject to a fine determined by that person's income.

Furthermore, all businesses making $250,000 and more would be required to provide health insurance for their employees and any business that wouldn't comply would be subject to fine.

The public option would be a part of this plan. The public option would pay Medicaid rates plus 5%. So, doctors would NOT get wealthy treating those on the public option. Most importantly, the Democrats have only figured out how to pay for half the bill so far. The taxes would cover half the cost. Democrats claim that the other half will come from future savings from more efficient record keeping, preventative care, etc.

The Democrats will claim that this plan won't tax that many small businesses, but this is totally misleading. It will require that all small businesses making $250,000 and more to provide some sort of a health care plan for their employees. According to this Kaiser Foundation study, about 60% of small businesses offered health insurance in 2005. There are about $27 million small businesses, those with 500 employees and less, currently in the U.S. This means that about 12 million small business owners will either need to provide health insurance for their employees or pay a fine. That's no different than a tax on 12 million people.

This bill also takes away much of people's liberty. Everyone will be mandated to get health insurance, like it or not, or pay a fine. Small business owners will be forced to provide health insurance for their employees or pay a fine. Furthermore, this complicates the tax code even more. This creates all sorts of new income break points, $350,000, #5000,000, and $1 million for new marginal tax rates. The president promised to simplify the tax code and this complicates it terribly.

Finally, this will undoubtedly lead to cuts in Medicare and Medicaid services. Both programs are on the verge of bankruptcy already. Now, both will cover millions more. That simply cannot happen without a cut in services. It increases the size and scope of government in manners consistent with the president's entire domestic agenda.

I predict that nothing near this bill will ever become law. It's possible that it gets out of the House, but nothing similar to it will get out of the Senate. Furthermore, once details of this bill get out, I further predict that the public at large rejects it overwhelmingly.