Economy Alarm: The Troubling Pitfalls of Nancy Pelosi’s Healthcare Takeover

The Troubling Pitfalls of Nancy Pelosi’s Healthcare Takeover

Democrats’ Promises Fall Short, Hidden Costs and Problems Lurk in 2,000 Page Bill

Speaker Pelosi Promised “Affordability for the Middle-Class, Security for Seniors and Responsibility to our Children”

“Speaking on the West Front of the Capitol surrounded by Democratic lawmakers, Pelosi, D-Calif., said the House’s version of a health care reform bill will include a government-run insurance option and extend coverage to 36 million uninsured Americans. She said the bill will lower patient costs and reduce the national deficit. ‘The Affordable Health Care Act will ensure, again, affordability for the middle class, security for our seniors and responsibility to our children,’ Pelosi said, adding that the legislation puts a major emphasis on preventative care.” (FOXNews.com, “Pelosi Health Bill Sets Stage for Contentious Negotiations with Senate,” 10/29/09)

Credibility Crash: Landmines for Middle-Class Families and Seniors Discovered in Democrats’ Takeover of Healthcare

After all the controversy over the public option, people might think that everyone can sign up right away if Congress passes health reform.

Or that insurance premiums will go down.

Or that they’ll be able to shop around for insurance if they don’t like what their company offers.

Think again.

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Premiums could still go up for most Americans

The bills aim to place downward pressure on the rise in overall health care spending, which would translate into lower premiums. But a stew of proposed changes to the insurance market, new taxes on industry, and projected savings that may or may not materialize create a sense of uncertainty — or downright pessimism among Republicans — about how much the average family would save.

Insurance industry studies concluded the bill would cause premiums to rise. Administration officials are confident savings would materialize for people across the board.

But lawmakers are waiting to hear from the nonpartisan CBO, which is examining the impact on premiums.

Grandma and Grandpa could lose out — and they vote

Obama insists congressional proposals to trim more than $400 billion out of the Medicare system would tackle only wasteful spending.

But the new CMS report on the House bill offered some dire warnings.

The proposed cuts could prove so onerous to hospitals and nursing homes that they stop taking Medicare patients. Congress could dial back the cuts, but such a move would diminish the savings promised under the bill.

And as the government reduces rebates to Medicare Advantage, a program that allows seniors to buy Medicare coverage through private insurers, enrollment would plunge by 64 percent.

Nancy-Ann DeParle, director of the White House Office of Health Reform, told POLITICO on Sunday that the 1997 Balanced Budget Amendment prescribed even more Medicare cuts, but “there was not what I would call a disruption in service to beneficiaries.”

“It is pretty speculative,” said DeParle, who headed the predecessor agency to CMS in the 1990s.

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Get ready for AMT, Part II?

Back in 1969, when reports of the super-rich paying zero in taxes were rampant, Congress created the alternative minimum tax to make sure the wealthy paid its share. One small problem: Congress didn’t link the tax to inflation, so now the “super-rich” getting hit with the AMT includes a lot of middle-class homeowners, 30 million in all next year.

A similar scenario might unfold with the millionaires tax in the House bill, on couples earning $1 million a year. Lawmakers didn’t index the tax for inflation, eventually imposing new costs on a growing number of families in the future.

House Democrats were worried the tax on the wealthy wouldn’t keep pace with the government’s increased spending on health care costs — with good reason. One study by experts commissioned by the Peter G. Peterson Foundation recently predicted the House bill would add more than $1 trillion to the deficit over the next 20 years. But without indexing the tax, they’re leaving behind a ticking time bomb in the bill. (Carrie Budoff Brown & Chris Frates, “Health reform’s hidden land mines,” Politico, 11/16/2009)

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