This is a politically significant and original analysis of the Vapor bill -- one without legislative language -- that lays out very real issues that are, in part, driving the pressure on Congress to produce the legislative language prior to consideration on the Senate floor.
FROM: Michael Hammond
RE: The Baucus “Bill”
TEN IMPORTANT QUESTIONS WHICH ARE UNANSWERED IN THE BAUCUS SUMMARY:
How many people will have to be covered by government-mandated, government-approved insurance? 48,000,000? Or 250,000,000?
Answer: We don’t know.
The first question is what it takes to “grandfather” the coverage you currently have. The Baucus “bill” states: “Individuals and groups who wish to renew coverage in an existing policy would be permitted to do so. ... Any individual who has an existing policy equal in value to the “young invincibles” plan (described below) can renew that policy.”
We have seen similar assurances in other bills. And it has turned out that, when we examined the legislative language, the “grandfather” protection could be defeated by something as simple as the birth of a child or even an increase in premiums.
This is an issue on which legislative language is paramount.
Once a business or individual loses “grandfather” protection, Subtitle C provides: “No policies could be issued in the individual or small group market (other than grandfathered plans) that did not meet the actuarial standards” laid out in the bill and did not constitute premium (“gold” or “silver”) coverage. The “bill” also provides that “[t]he Secretary of HHS would be required to define and update the categories of covered treatments, items and services...” under these mandated policies.
How much would the government-mandated policies cost?
Answer: We don’t know.
But it is clear they will cost more than they currently do. CBO has indicated that premiums will go up. And even one liberal study found that single adults between 55 and 64 could pay as much as $8,650 a year.
This is because:
-the simple rate of health-related inflation in
Massachusetts (which is the basis for this plan)
is over 9% this year –- and health-related costs
skyrocketed 42% after the Massachusetts system went
-mandated coverage will mean more demand for medical
-premium payers will have to pay for those with pre-
-policies will have to limit deductibles and
copayments -– and have to provide gold-plated
services like preventive care (i.e., gym
memberships) and mental health parity.
True, the Schumer amendment to the Baucus bill would suspend penalties for anyone not able to obtain insurance for 8% of income. And the insurance industry has complained that so many of the uninsured would be removed from the mandate under that provision that it would be required to dramatically increase premiums for everyone else.
What about abortion?
Answer: We don’t know, exactly.
For the first time, the federal government would be required to affirmatively guarantee that abortion coverage was available to everyone in the country. It’s unclear how the HHS Secretary would do this in a state where abortion “services” were otherwise unavailable, without discrimination against non-abortion-providing insurers and affirmative federal trolling for abortion providers.
In addition, Planned Parenthood would have to engage in the sort of two-book bookkeeping that it perfected so well in connection with federal family planning money (section 1008 of the Public Health Services Act). It would have to pretend that all abortion money came from private sources and that other services were funded with federal money. But, as we all know, money is fungible.
Finally, a “minimum benefits package” could not require abortion services. But, because this is not legislative language, it is not completely clear what a “minimum benefits package” is. In particular, we do know of requirements (such as that in Subtitle C) for the purchase of polices above the minimum level.
It is significant that language to strengthen anti-abortion and conscience protections were conspicuously defeated by the Finance Committee.
What about privacy of confidential medical information and, in particular, gun-related information?
Answer: We don’t know.
We do know that “[t]he Secretary of HHS would be required to define and update the categories of covered treatments, items and services...” under mandated policies.
Since some insurers, notably Prudential and State Farm, already have anti-gun policies -– such as dropping gun owners or requiring trigger locks -– it is hard to imagine that the Obama administration wouldn’t do the same thing by defining what federally mandated policies are required to contain.
This is in addition to the near-certain requirement that health/gun-related information be dumped into the $20 billion database created by the stimulus bill.
Where are the Medicare cuts going to come from?
Answer: We don’t know.
First of all, it’s pretty clear that the $283 billion coming from reductions of payments to providers isn’t going to be realized. This is a continuation of an agreement made in 1997 (Sustained Growth Rate, or SGR) to reduce doctors’ payments, and it has never been allowed to go into effect in any year when there would have been a cut.
In addition, the Baucus “bill” envisions that payments to doctors would drop 25% after the first year. At least 45% of all doctors have said their would consider suspending their practices if this went into effect.
The summary purports to bar cuts in eligibility and services. But this doesn’t cut “rationing by underpricing” –- a practice by which the government could selectively eliminate services by setting their price below the cost of providing the services.
Would an individual be required to purchase government-approved insurance, even if his financial circumstances were such that it would result in bankruptcy, or the loss of his home or farm?
Answer: We don’t know.
“Hardship” will be determined by the Secretary of HHS AFTER the bill is passed into law.
Can you go to prison because you cannot afford insurance?
Answer: We don’t know for sure, but: probably.
The Schumer amendment says: “Non-compliance with the individual responsibility to have health coverage shall incur no criminal penalty.”
No one ever thought it did.
What people complained about –- and what is clear -– is that failure to pay the IRS FINE assessed for non-purchase of health insurance is punishable by a year in prison and a $25,000 fine, under the Internal Revenue Code.
A homeless person will presumably not be caught up by this crime. But a person who could, technically, pay by selling his home or his business –- but refuses to do so -– could go to jail.
Since the Baucus bill’s penalty for failure to purchase government-mandated insurance is characterized as an “excise tax,” exactly what is the transaction on which it is imposed?
Answer: We don’t know. Presumably, the use of the term “excise tax” is intended to circumvent the Constitution’s prohibition on capitation taxes not imposed in accordance with the census.
The income tax was outlawed by that provision until the Sixteenth Amendment was passed.
Normally, however, an excise tax can only be imposed on an object or transaction, and the only “transaction” triggering the imposition of this “excise tax” is the transaction of “breathing.”
Could the HHS Secretary, within her discretion to define “categories of covered treatments, items and services,” recognize homosexual marriage and require coverage of sex change operations?
Answer: We don’t know whether she will, but she certainly could.
And, given that this administration is under enormous pressure to recognize same-sex unions by regulatory fiat, it is probable that she would do so.
Have we now lost the battle over health care reform?
Answer: No. We have moved from a myth that we could not possibly win (May) to the myth that we could not possible lose (August) to the myth that we cannot possibly win (now). In fact, the truth is now –- as it has ALWAYS been -- that the issue is teetering on a razor-thin edge and that victory will go to whoever pursues the smarter strategy.
If Chuck Grassley is correct, the Baucus “bill” will lose money between 2013 and 2023. If this is the case, none of the Democratic bills can go through reconciliation –- period. And this is before we consider how much of it is out of order under the Byrd Rule. Furthermore, it now appears that Democrats will not have moved to proceed to their bill until after October 15 -– and that they will therefore miss the October 15 deadline for reporting reconciliation language out of the two substantive committees.
The would mean that the first major battle which could make or break prospects for the legislation would be the fight over the motion to proceed to the health bill (or whatever House-passed bill the health package is going to be attached to).
One thing is for certain: If the process is allowed to go forward, the final product will almost certainly contain some form of public option. This is because the final version will be written by Barack Obama and Nancy Pelosi in House/Senate conference.