The legislative process can also be a learning process, and as Congress considers health care legislation -- the latest act being the Senate Finance Committee's vote in favor of Chairman Max Baucus' bill, or "conceptual language" -- we have been learning something useful. It's that legislators would like to provide generous, even gold-plated health insurance coverage to almost all Americans, but that no one wants to pay for it.
The learning process should have started last February, when Congressional Budget Office Director Douglas Elmendorf indicated that the CBO did not back the Obama administration's assertion that preventive care would save money. But it still came as a shock when the CBO confirmed its preliminary finding in its June assessments of the cost of Senate Democrats' bills.
This should have been obvious all along. Early screening can reduce the cost of treating a particular patient. But the costs of early screening add up when you test lots of people who will never need such treatment. So much for "bending the cost curve" down by preventive care.
Then House committees passed a bill financed in part by a "millionaire's tax." But freshman Jared Polis of Colorado, a successful entrepreneur, and 20 other House Democrats came out against that, on the reasonable theory that a tax on high-earners is a job-killer in today's economy. And tax increases on high-earners, thanks to creative accountants, never net as much revenue as static analysts like the CBO predict.
Baucus' bill would impose $829 billion in added costs, financed by a variety of taxes and spending cuts that are just as dubious. One is a tax on so-called Cadillac health insurance plans. But unions that have negotiated such plans are opposed, and House Democratic leaders are uninterested. Another is a tax on makers of medical devices that will be paid for by consumers. Critics have pointed out that most of these taxes will fall on people with ordinary incomes, far below the $250,000-plus moguls that Barack Obama said would bear all his tax increases.
Another Baucus tax is the penalties that would be paid by those who don't buy health insurance. But the penalties in his bill are so low that many will choose to pay them and go uninsured, thus foiling the goal of lowering the uninsured percentage. And as the insurers' lobbying group has pointed out, this will increase premium costs for those who are insured -- a form of tax on those behaving the way Baucus wants.
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