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e-News October 29, 2009

Speaker Pelosi’s Latest Government Health Takeover Plan

After weeks of working in secret behind closed doors, Speaker Pelosi rolled out her latest version of her vision for health care reform yesterday.  Not surprisingly, it looks eerily familiar.  It is now nearly 2,000 pages long and is filled with job-killing tax increases for families and small businesses to fuel more federal spending.  At its heart is a so-called ‘government plan’ which truly represents a government takeover of health care in America.  

While we have not had time to analyze Speaker Pelosi’s bill in-depth, three things about the bill are already clear: it will raise the cost of Americans’ health insurance premiums; it will kill jobs with tax hikes and new mandates; and it will cut seniors’ Medicare benefits and payments to area doctors and hospitals.

“Let me say it one more time: I support health reform.  There are areas where Republicans and Democrats can and should work together,” Rodney said. “There is no doubt about that that. But a massive new government-run insurance plan paid for with hundreds of billions of dollars in higher taxes is not ‘reform.’”

The American people should know that this is not the final bill and that it will include a massive 600-page “manager’s amendment” as it goes to the floor for debate next week.  That floor debate will be very short and perhaps only one amendment will be allowed.

Speaker Pelosi’s health care bill includes: 

  • Creation of a government-run insurance program that could cause as many as 114 million Americans to lose their current coverage;
  • Abolition of the private market for individual health insurance, forcing individuals to purchase coverage in a government-run Exchange;
  • New insurance regulations that would raise premiums and encourage employers to drop coverage;
  • Trillions of dollars in new federal spending that will exacerbate the deficit and imperil the nation’s long-term fiscal solvency;
  • Taxes on all Americans—individuals who purchase insurance, individuals who do not purchase insurance, and millions of small businesses—that will kill jobs and raise health care premiums; and
  • Cuts to Medicare Advantage plans that will result in higher premiums and dropped coverage for more than 10 million seniors.

Ten Facts About Speaker Pelosi’s Health Care Bill

1. RAISES TAXES ON MIDDLE CLASS FAMILIES.  Speaker Pelosi’s health care bill imposes a range of tax increases on families with income below $250,000, breaking a promise made by President Obama.  Tax increases on middle class families include: an individual mandate tax of up to 2.5 percent of income for taxpayers earning as little as $9,350; repeal of a tax break on medicine purchased with funds from an HSA (health savings account); limits to tax relief through FSAs (flexible spending accounts); taxes on medical devices that will inevitably be passed on to consumers; and a new tax on all insurance policies.

2. MASSIVE CUTS TO MEDICARE BENEFITS FOR SENIORS.  Despite grave warnings from CBO, FactCheck.org, and the independent Lewin Group that cuts to Medicare of the magnitude included in Speaker Pelosi’s bill would have a negative impact on seniors’ benefits and choices, Speaker Pelosi’s health care bill cuts Medicare by $500 billion dollars.

3. NO PROTECTIONS FOR SMALL BUSINESSES.  Speaker Pelosi’s health care bill claims to exempt small businesses from the steep eight percent ‘pay or play’ employer mandate.  The facts tell a different story.  Using Census Data compiled by the Small Business Administration, this so-called ‘exemption’ hammers small employers with only, on average, 17 or more employees to new taxes and mandates.  The companies affected employ 70 percent of all small business employees, or 42.3 million workers.  Adding to the assault on small businesses, the bill does not index the small business “exemption” amounts, meaning more and more small businesses will be ensnared by this job-killing employer mandate each year.

4. INCREASES THE COST OF HEALTH INSURANCE.  Imposing a new $2 billion tax on insurance policies will be passed on to patients in the form of higher premiums.  Changes to the Medicare Part D prescription drug benefit will, according to estimates by CBO, will raise Medicare Part B premiums by $25 billion and Part D premiums by 20 percent.  And imposing an unfunded mandate on states like New Jersey to pay for the bill’s Medicaid expansion will shift the burden of this expansion on state taxpayers who may experience tax increases to cover the cost.

5. USES GIMMICKS TO HIDE BUDGET-BUSTING COST, PILES UP DEBT ON FUTURE GENERATIONS.  Speaker Pelosi’s health care bill claims to be deficit neutral, but uses budget gimmickry to hide its massive total cost.  Working families across America know they cannot simply decide that a bill they get in the mail doesn’t exist, but that’s exactly what the Speaker is doing.  In order to meet the President’s ‘target’ spending total of $900 billion, the Pelosi bill will sweep costly provisions under the rug, including $245 billion to ‘fix’ doctors’ reimbursement rates. 

6. IMPOSES JOB-KILLING EMPLOYER MANDATES.  Additional taxes on employers and new government mandates that dictate acceptable insurance will place new and crushing burdens on employers.  These are burdens that will ultimately fall squarely on the backs of workers in the form of reduced wages, fewer hours or lost employment. CBO agrees that “[e]mployees largely bear the cost of... play-or-pay fees in the form of lower wages.”  According to the National Federation of Independent Business (NFIB), the nation’s largest small business association, an employer mandate of this magnitude will disproportionately impact small businesses, triggering up to 1.6 million lost private sector jobs.  Two-thirds of those jobs would be shed by small businesses.

7. TILTS THE PLAYING FIELD IN FAVOR OF THE GOVERNMENT-RUN INSURANCE COMPANY.  Speaker Pelosi’s health care bill promises not to give the government-run plan advantages over private insurers in the market, but the opposite is true.  The bill provides billions in start-up funding for the government-run plan, and while it requires the plan to repay the money over time it does not require the plan to pay interest on this “loan.”  This interest-free, taxpayer-subsidized loan is potentially worth millions of dollars and tilts the playing field in favor of the government-run plan.

8. THREATENS CASH-STRAPPED STATES WITH UNFUNDED MANDATES.  Speaker Pelosi’s health care bill swells the number of Americans on the government rolls by expanding Medicaid eligibility.  Medicaid is financed through a federal-state partnership, but the bill dumps nearly ten percent of the mandated expansion included in the bill onto the states.  States, already struggling with fiscal constraints, would be left on the hook for billions of dollars due to this unfunded mandate.

9. CREATES A NEW MONSTROSITY IN THE TAX CODE.  Starting in 2011, Speaker Pelosi’s health care bill imposes a 5.4 percent tax on adjusted gross income above $500,000 for individuals and $1 million for married couples.  Yet, the dollar amounts for which the tax kicks in are not indexed for inflation.  We’ve seen this before with the Alternative Minimum Tax, another failure of the tax code, also wasn’t indexed for inflation and now affects millions of middle class families with incomes below Speaker Pelosi’s proposed income surtax.

10. MISSES AN OPPORTUNITY TO CURTAIL JUNK LAWSUITS.  Speaker Pelosi’s health care bill misses a critical opportunity to rein in junk lawsuits and costly defensive medicine.  The bill includes only a voluntary grant program to deal with the medical liability crisis instead of including real reform, which would produce tens of billions of dollars in savings, improve efficiency in our health care system and reduce costs for patients and providers.

Speaker Pelosi’s latest ‘Affordable Health Care for America Act’ is expected on the House floor next week. 

To Read H.R. 3962, Speaker Pelosi’s bill, visit:

http://www.rules.house.gov/bills_details.aspx?NewsID=4483

and

http://docs.house.gov/rules/health/111_sgr1.pdf

Recommended Reading: Monday column by Robert Samuelson in the Washington Post:

“In the health-care debate, the "public plan" is all things to all people. For supporters, it would discipline greedy private insurers and make health-care coverage affordable. For detractors, it's a way station on the path to a single-payer insurance system of government-run health care. In reality, the public plan, also known as the public option, is mostly an exercise in political avoidance: It pretends to control costs and improve access to quality care when it doesn't…”  Read more:

http://www.washingtonpost.com/wp-dyn/content/article/2009/10/25/AR2009102502041_pf.html