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Thursday, November 19, 2009

The Senate Health Care Bill: the Basics

Harry Reid is finally ready to unveil the Senate's version of the health care bill. According to the Congressional Budget Office, it will cost $849 billion over ten years and cut the deficit by $127 billion over that same time. Of course, the fees and taxes will start right away and the benefits won't kick in completely until 2014. So, the Senate is using the same Enron accounting tricks that the House Health Care bill used. In that, they'll collect revenues for 10 years and only provide benefits for seven years.

This bill is an even longer read than the House version. The House version clocked in at just under 2000 pages. The Senate's version will clock in at 2074 pages. It will have a public option but with a state opt out clause. Medicaid will be expanded to cover significantly more people. Medicare will face about $500 billion in cuts over the next ten years. Seniors will receive a one time $500 check in order to subsidize the cuts.

There's a sea of new taxes and fees. If you go without insurance, that will mean you pay a fee. That will start at just $95 in 2014 but go up to $750 by the end of the decade. So called "Cadillac" health insurance, super charged and all inclusive health insurance packages, will be taxes. Those are health insurance packages valued at $8300 for individuals and $23,000 for families and more yearly. Medical devices will be taxed, plastic surgeries will be taxed, health insurance providers will be taxed, small businesses that don't provide insurance will be taxed, prescription drugs will be taxed, and payroll taxes will go up on anyone making $250,000 and more.

About 94% of people will be covered by the end of the decade. That means about 60% of those that aren't covered now will be covered. Individuals, as I pointed out, will now be mandated to get health insurance. So to will small businesses above a threshold of revenues and number of employees. No one will be denied coverage due to pre existing conditions starting in 2014 and insurance companies won't even be able to charge any more for such conditions. There will also be a new health insurance exchange. Finally, it's very likely that McCarron/Ferguson which exempts health insurers from Sherman Anti Trust, will be removed.

The most important thing that hasn't yet been analyzed is the number of new bureaucracies and regulators created by the Senate bill. The House bill created in excess of 100 new bureaucracies and regulators. The Stupak amendment, which would outlaw federal funding for abortions, is not in this bill. It's also unclear what identification requirements will be in this bill. So, the issue of health care for illegals is still unsettled. The so called Doctor Fix isn't in this bill as well. As such, the real cost is above $1 trillion over ten years. Of course, since most of the benefits don't kick in for three years, that number is really over seven years.


Anonymous said...

I don't think its fair to include the Doctor Fix in this bill. It gets passed every year without vocal opposition whether this bill passes or not. It is no more relevant to link the Doc Fix to this bill than to the DoD appropriations bill.

mike volpe said...

It is if passage of the doctor fix is necessary to secure the votes of certain Blue Dogs. If the doctor fix isn't passed, most Blue Dogs won't vote for this bill, so of course the two are linked. Not to mention, that the money is spent regardless.

David Leach said...

I'm convinced that the Stupak amendment is a bit of a red herring to get these bills passed.

They know that Federal funding of abortion will get a lot of people up in arms so they purposely leave it in the bill. Then everyone starts raising hell about it and that becomes the big focus, instead of everything else in the bill. Then during the "public" debate they graciously concede and add the Stupak amendment thus getting a rush of votes to pass the bill.

It is a head fake.

Anonymous said...

That's a ridiculous assertion. The Stupak amendment practically turns the health care bill into an abortion ban that happens to deal with health care. Stupak clearly cares more about banning abortion than he does about health care reform, if he cares about health care reform at all. This bill will not pass with the Stupak Amendment. Now the Progressive Caucus actually has a reason to kill this bill.

mike volpe said...

That's a bit extreme. Stupak doesn't want federal funding for abortion. If you think this will ban abortions entirely, that's only because you think that this bill is a government takeover of health care.

Anonymous said...

Apparently, free money from the government with no strings attached is a privilege reserved for Wall Street.