Policy Documents

Obamacare to Detriment of Everyone’s Health

Peter Ferrara –
January 14, 2010

Congressional Democrats are rushing to get their historic health care overhaul legislation passed before all the surprises in the bill are discovered and public opposition to it becomes overwhelming. But in a democracy aren’t elected representatives supposed to listen to the voters rather than evade them?

Seniors turned against the bill long ago, for good reason. Over the first 10 years of full implementation, the bill provides for an unprecedented $800 billion in cuts to Medicare. That is one of the main reasons the Congressional Budget Office scores the bill as deficit neutral. Another is that the bill includes close to $1 trillion in increased taxes over the first full 10 years.

More than $100 billion in the Medicare cuts are to Medicare Advantage, the option nearly one-fourth of all seniors have chosen to supplement their Medicare benefits, provided by private insurers.

The legislation also would establish an Independent Medicare Advisory Commission, a panel of unelected bureaucrats with the power to adopt still more Medicare cuts. This commission also would have rationing powers to refuse medical treatments your doctor believes would work best for you, and substitute other procedures it decides are less costly.

The case of Hays vs. Sebelius, decided just before Christmas, provides an example. Ilene Hays, a Medicare Part B beneficiary, had been taking the prescription drug DuoNeb for four years to control pulmonary disease. Though that drug regimen worked well for her, the Medicare bureaucracy decided it would pay only for a cheaper treatment.

Hays sued, claiming Medicare does not have the authority to overrule her doctor. The D.C. Circuit Court of Appeals agreed, concluding that the secretary of Health and Human Services and the Medicare bureaucracy were attempting an end-run around the law.

The pending health care legislation would not only grant this authority to Medicare staffers, it would eliminate the right of patients like Hays to sue the government.

The bill would sharply increase taxes on the drug coverage some employers provide to their retired employees, and the resulting increased costs must be reported as a liability on their financial statements. Many, if not all, companies would drop such coverage.

Moving to the other end of the age spectrum, workers under 30 would find their premiums soaring because it would be illegal for insurers to charge them the much lower premiums that reflect their much lower average health costs. Moreover, the bill would require young workers to buy insurance with these soaring premiums or pay tax penalties - even workers who otherwise pay no income tax because they do not earn enough.

The best Congress could do for Americans young and old would be to kill this big-government takeover of health care and start over with reforms that grant more power to the people rather than to the government.

Peter Ferrara is a senior policy adviser on health care at the Heartland Institute.