Defining ObamaCare Down
Defining ObamaCare Down
We're all free-market moderates now.
Originally Posted At The Wall Street Journal
February 26, 2010
A bipartisan health-care consensus will remain elusive after yesterday's marathon summit, as expected, though viewers who stuck out the full seven-plus hours could be forgiven for wondering what happened to all the liberals. General anesthesia? To listen to President Obama and his closest Democratic allies, you'd think John McCain had won the election and their bill had been drafted by Paul Ryan, Tom Coburn and the scholars at the American Enterprise Institute.
In his opening statement, Mr. Obama said the key issue is "figuring out how can we control the huge expansion of entitlements," especially "the exploding costs of Medicare." He said Congress must fix "some fundamental structural problems" in U.S. health care, with reforms that lower spending by increasing "choice and competition."
If only politics hadn't intruded—"politics I think ended up trumping practical common sense," he claimed—peace would reign upon the Earth and the two parties could "focus on where we agree because there actually is some significant agreement on a host of issues."
It's as if the last year didn't happen. Only minutes into the discussion, it became clear the Democratic strategy was to portray this debate as somehow taking place between the 49 yard lines. Senate Finance Chairman Max Baucus chimed in that "The main point is, we basically agree."
Yet the reality is that there is a vast philosophical and policy gulf on health care in Washington. Everyone agrees there are severe problems in the health-care markets. The disagreement is over solutions.
The morning was dominated by an argument over whether ObamaCare would lower insurance costs, and the exchange was telling. Republicans, led by Tennessee Senator Lamar Alexander, rightly said that premiums would increase, while the President disagreed. "This is an example of where we've got to get our facts straight," he said, in keeping with his strategy of depicting any disagreement as factually challenged or politically motivated.
One fact is that the Congressional Budget Office estimates that premiums in the individual market would jump by 10% to 13% in 2016 because the government will mandate that consumers buy richer benefits than they otherwise would. Mr. Obama eventually conceded that point but said these mandates are simple consumer protections. "Yes, I am paying 10% to 13% more because instead of buying an apple, I'm getting an orange," Mr. Obama said. "We want competition, we just want some minimum standards."
Well, yes, politicians always claim their standards are the minimum. Despite vastly different consumer health needs and preferences, the core of ObamaCare is the brute-force regulatory standardization of benefits and how they should be paid for, so that government can afford to subsidize health care for all. West Virginia Democrat Jay Rockefeller let the mask slip when he said the goal is to stomp on the insurers and "clip their wings in every way you can," because it is "a rapacious industry that does what it wants." Mr. Rockefeller added that "Sometimes decisions have to come from Washington."
Mr. Ryan, the Wisconsin Republican, posed the fundamental question: "Should people in Washington decide exactly how this works and what you can and cannot buy?" We thought the GOP acquitted itself fairly well, noting the irresponsibility of using Medicare cuts to float a new entitlement when the status quo has $37 trillion in unfunded liabilities. They also focused on smaller, incremental reforms that might do some modest good.
But the root cause of surging health-care costs is the irrational and regressive tax preference for employer-sponsored insurance only, and both parties left it virtually unmentioned. Mr. McCain missed an opportunity to point out that most people would have done better than they do now under his campaign plan that Mr. Obama savaged in 2008. The subject didn't come up until Democratic backbencher Ron Wyden's 11th-hour argument that "real reform changes the incentives that drive the system" and Mr. Coburn argued that "If we don't reconnect health-care purchasing with health-care payment, we're not going to get good value out of this system."
Mr. Obama also claimed that "Every proposal that health-care economists say will reduce health-care costs, we've tried to adopt," yet this is demonstrably untrue. The White House has delayed its own excise tax on ultra-expensive health plans (previously sold as the key cost-control measure) until 2018, well after Mr. Obama is out of office, assuming he wins a second term.
In the end, after all the bipartisan cooing, the President's 20-minute closing argument explained where the debate really is. Democrats won the election and they are going to do what they want to do, starting next week and on a partisan vote if they can shanghai enough Members.
The point of yesterday's session was to give a soothing, moderate political gloss to a government health-care takeover that will raise costs, greatly expand the entitlement state, and reduce choice and competition—the opposite of everything Mr. Obama claims.
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