November 24, 2008

November 24, 2008 | Commentary on Health Care

What Obama Will Do on Health Care

Little guesswork is required to imagine what a liberal White House victory and bigger liberal majorities in the House and Senate would mean for health care in America in 2009.
Given his ambitious, comprehensive, and expensive health plan, one could expect a President Obama to start filling in the missing but crucial details and sending key provisions up to Capitol Hill in bits and pieces.

So don't expect Obama-whose plan would add an estimated 48 million Americans to government health coverage-to repeat the Clinton mistake of 1993 and send a giant telephone book of a bill up to Capitol Hill.

Obama might start with relatively "non-controversial" health care delivery reforms that enjoy at least nominal "bipartisan" support, such as federal investment in the promotion of health information technology, a new government-sponsored agency to make determinations on the "comparative effectiveness" of different medical treatments and procedures, or "pay for performance" bonuses for doctors who comply with government practice guidelines in Medicare and other government health programs, with a view toward expanding these to the private sector over time.

These eagerly awaited provisions would be quickly enacted by a Democratic majority on Capitol Hill, overcoming the deep-seated reservations of a minority in both parties dedicated to preserving the professional independence and integrity of the medical profession.

Congress would create a new infrastructure for federal regulation of the delivery of medical care for large segments of the American population. The result: a down payment for federal control of health care delivery, combined with an explosion of special-interest lobbying by provider groups.

In March 2009, the State Children's Health Insurance Program (SCHIP) must be reauthorized. SCHIP was originally designed for children in poor working families who don't have health insurance coverage and are ineligible for Medicaid.

During the past two years, congressional Democrats wanted to expand it well into the middle class and even to include families with up to $84,800 in annual income. President Bush vetoed such expansions but Obama will welcome them. The result: Private insurance will be "crowded out" as millions more Americans become dependent on government for health care.

SCHIP is also likely to become the vehicle of choice for other provisions of the Obama health plan, such as expansion of the $350 billion Medicaid program. The result: a big down payment for federal control of health care financing.

Medicare Trustees will likely issue more dire warnings next spring about the rising costs of Medicare, which has unfunded obligations topping $36 trillion. With the retirement of the first wave of America's 77 million Baby Boomers just two short years away, congressional liberals will put on a long face and tell us that it is time to get serious about Medicare reform - i.e. fewer private health care options and tighter price controls.

Likewise, the intense private plan competition that wrought a 40 percent decline in the average premium for prescription drugs in Medicare would be replaced by government price-fixing, but they'll call it "government negotiation" of drug prices. The result: Fewer private health care options in Medicare and political pricing and rationing of prescription drugs.

In the summer of 2009, Congress will be wrestling with the budget. It could be an ugly business, especially if the downturn in the economy deepens and people losing jobs are also losing their insurance.

That might be the ideal time for an Obama Administration to send up its employer mandate for health insurance: Employers must offer "meaningful" coverage or pay a special payroll tax to finance employee coverage through a new government health plan.

According to a recent Lewin Group analysis of the Obama health plan, that provision alone would result in 22.5 million Americans losing their employment-based coverage. The result: even more millions of Americans dependent upon government health programs.

Less choice, less competition, fewer private health plans, millions more Americans covered under government health plans, and a new payroll tax. Less personal freedom, and more government control.

In fact, however, nothing is inevitable. Next year, or ever. The beauty of a free society is
that our destiny is still largely in our own hands.

Robert E. Moffit, Ph.D.,is Director of the Center for Health Policy Studies at The Heritage Foundation.

About the Author

Robert E. Moffit, Ph.D. Senior Fellow
Center for Health Policy Studies

Related Issues: Health Care

First Appeared in The DC Examiner