Senate Democrats are still playing games with CBO. CBO said that the Finance Committee bill would reduce the deficit by $81,000,000,000, thanks in large part to the proposed $404,000,000,000 in Medicare cuts. Cato Institute’s Michael Tanner just posted this little trickery:

When the Senate Finance Committee released CBO scoring of its health care reform proposal last week, we warned that its claim of reducing future budget deficits was achieved only through dishonestly assuming that Congress will implement a 21% reduction in Medicare payments that is scheduled under current law. We pointed out that Congress has been supposed to make those reductions since 2003, and never has. Now, surprise, surprise, Democrats have introduced a bill to eliminate the scheduled cut, at a cost of $247 billion. But Democrats cleverly are putting the new spending in a separate bill, so it won’t change scoring of health care reform. Have they no shame?

I’ve said all along that the deficit neutral message shouldn’t be taken seriously because it was just a gimmick. I’ve also argued that CBO’s scoring shouldn’t be the only benchmark by which the Democrats’ health care bills should be rated on:

I’ve said for days now that deficit neutrality wasn’t the right benchmark to measure the Democrats’ legislation by, that it was important to consider what the total cost of the legislation is and to find out if the Democrats’ legislation does anything to reduce costs to families, companies and insurers.

In addition to those benchmarks, it’s important that we’re certain that whatever legislation emerges will slow down or reduce health care costs. Based on the information available, the Democrats’ bills increase health care spending at even more unsustainable rates.

In his WSJ op-ed, Karl Rove explains that the Democrats’ troubles are just beginning:

The problem for Mr. Obama is that the Baucus bill is being sold on the strength of accounting tricks that make it appear that it won’t add to the deficit. (This is true for the other health-reform bills, too). If fiscally conservative Democrats sign on to the bill now after publicly saying they are doing so because it doesn’t add to the deficit, they may end up bailing once the tricks are revealed to the public.

I’m skeptical that Blue Dogs will bail because of the Democrats’ trickery. They’ve been effectively neutered by Speaker Pelosi. To stretch the pet metaphor a bit further, the Blue Dogs’ bark was always worse than their bite. The Blue Dogs’ problems are real though. This information should be highlighted in every Blue Dog district across the nation:

Under questioning at a Senate hearing Tuesday, CBO Director Douglas Elmendorf admitted that the $500 billion in tax hikes in the Baucus bill would be passed onto consumers, jacking up insurance premiums. That undercuts the argument that Democratic reforms will make health care more affordable.

That isn’t what Americans want. In fact, why would Americans spend over $1,000,000,000,000 on legislation that increases the cost of health care on an individual level, that doesn’t eliminate the uninsured (25,000,000 people would stil be uninsured.) and that increases insurance premiums at a rate that’s already growing too fast?

Let’s put it this way. The Democrats’ ‘reforms’ will immediately cost people more money. What’s worse is that it’ll cost people even more money later. That isn’t opinion. That’s what happens when businesses incur additional expenses. They don’t just eat the costs. They pass them along to the consumers. This isn’t difficult. Actually, it’s quite predictable.

James Capretta explains why Baucuscare is bad policy:

In short, the plan sponsored by Finance Committee Chairman Max Baucus would almost certainly lead to a death spiral in many private health insurance markets.

Insurance death spirals occur when regulators force insurers to offer coverage (“guaranteed issue”) at premiums below the known risk of those they are insuring, without any assurance that the shortfall can be made up elsewhere. When insurers comply with these rules and offer relatively low cost health insurance policies to all comers, quite predictably, many sick people step forward to sign up. When the insurers then try to turn around and charge higher premiums to the relatively healthy to cover their costs, the healthy, also quite predictably, are more reluctant to enroll because they can see the premiums they would have to pay would very likely exceed their health-care costs. So they often say “no thanks” to the insurance and decide to take their chances by going without coverage instead. As more and more healthy people exit the marketplace, insurers are then forced to raise premiums for everyone who remains, which only further encourages the lower risks to opt out. This vicious cycle of rising premiums and an increasingly unhealthy risk pool is called a ‘death spiral’ because it eventually forces the insurer to terminate the plan.

This is not a hypothetical, textbook scenario of what might happen to a poorly run insurance market. It has happened before, many times and in many places. See, for instance, the experience in Kentucky, and in Washington state, and in Maine too. There’s no reason it couldn’t happen nationwide.

In other words, the legislation imposes onerous regulations on health insurance providers which make it impossible for insurance companies to make a profit. Once it’s apparent that they can’t make a profit, the health insurance providers don’t have an incentive for providing health insurance, which leads to people opting for a public option.

It’s important to notice that this wouldn’t happen if government didn’t intentionally impose these heavyhanded regulations on health insurance providers. (It’s a slick game the Democrats are playing, ‘fixing’ the problem they intentionally created.)

The bottom line is that Baucuscare isn’t the only bad legislation that the Democrats have passed. It’s just the most recent legislative disaster that they’ve passed. All of the Democrats’ bills increase health care costs, increase taxes on the middle class and don’t solve the uninsured problem that the Democrats say they want to fix.

Only in Washington, DC can they call something like that reform.Technorati: , , , , , , , , , , , , ,

Cross-posted at California Conservative

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