Shuffling the Deck Chairs on Reform

It’s not often I’m completely blindsided by developments in health care reform. And then Olympia Snowe goes and votes for the Senate Finance Committee bill.

I was wrong to think that no Republican would possibly vote for reform.  I was wrong to think that Max Baucus had been completely wasting his time.  I was wrong to assume that there was no point to negotiating or giving up anything.

But now we are entering a critical juncture for health care reform.  The White House has seen that caving on certain issues can give them the ability, real or not, to claim a bipartisan victory.  It will be even more enticing now to give further concessions to retain or even increase support.  Those concessions have consequences, however. 

There’s no way anyone is going to negotiate for fewer people to have insurance coverage, so there’s no room to move on access.  No one is talking about changes to the bill that may affect quality either. All of the focus is going to be on cost.

The first big battle will be over the public option.  Make no mistake about it – the public option is all about cost.  No more people will get insurance coverage if we have the public option.  And if you think it’s a way to backdoor single payer, you’re going to be disappointed as well; it’s not.  The public option is about increasing competition to force private companies to find ways to save more money.  It’s about lowering the cost.

Remember that fact every time a Blue Dog Democrat or Republican argues against the public option.  They are effectively raising the cost of the bill.  Most are doing it for ideological reasons, because they don’t like increased government involvement.  That’s an acceptable point of view.  But you have to decide what you want more – less government or a cheaper bill, because you can’t have both.

Not that this will stop those same people from arbitrarily deciding the bill needs to cost less.  For months I’ve been hearing people complain about the costs of the bill.  Don’t get me wrong.  $829 billion over a decade is a lot of money.  But that averages out to less than $85 billion a year. 

We currently spend $2.4 trillion a year on health care.  Since more than 60% of health care spending is already through public funds, paid for by taxes, government’s portion is already about $1.5 trillion a year.  So health care reform, as proposed, amounts to an increase in government spending of about 5.6% if costs otherwise did not increase at all.  That’s probably less than your private insurance premiums will go up next year.

That won’t stop many from arbitrarily deciding that $829 billion is too much. Maybe $700 billion is better.  You know what?  That means the yearly average spending will be $13 billion less.  Wonderful.  You’ve reduced potential government spending on health care by less than 1%.

And for what?  Here’s the truth no one wants to confront.  We’re only talking about the cost of the bill.  No one is trying to reduce health care costs overall.  That $2.4 trillion is only going to go up.  When we focus only on the bill, and not overall costs, it’s politics, not reform.

If we reduce the cost of the bill and not the cost of health care in general, what do you really think will happen?  People – you and me – will have to pay more.  It doesn’t matter if we pay in premiums, or out of pocket, or in taxes.  We, as a country, will still have to pay the whole amount.

If we allow those in Congress to cut the bill, where do you think the cuts will come from?  I suppose they could reduce Medicaid subsidies (they won’t).  They could make further Medicare cuts (they won’t).  They’re not talking about paying pharmaceutical companies less or physicians less or hospitals less.  It’s going to come from subsidies.

That means that middle class people will be forced to pay more out of pocket for their insurance.  They won’t call it a tax, but we will effectively be placing a larger burden on those most hurt by uninsurance to pay the difference.

Every dollar they pull from the bill has to be replaced by individual spending.  The total cost of care isn’t coming down – just the government portion.  It may make those who represent us feel better, and it may make for good sound bites, but they aren’t reducing anything in reality. Remember that, when they talk about “savings.”

Until someone has the courage and will to address the total costs, we’re just shuffling the deck chairs on the Titanic.  Health care costs are an enormous burden on our economy, and on our people.  It doesn’t matter how you dress it up – we’re paying the bill.  Don’t let them fool you.

 

Read more about health care policy and get your questions answered at Rational Arguments.

 

 

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