The Heritage Foundation

Executive Memorandum #382 on Social Security

May 26, 1994

May 26, 1994 | Executive Memorandum on Social Security

Beware the Senate DOMESTIC ISSUES: LABOR Committee's Supreme Court of Health


(Archived document, may contain errors)

5/26/94 382

BEWARE THE SENATE LABOR COMMITTEVS SUPREME COURT OF HEALTH

Unable to work out the complex and confusing details of their health care reform proposals, some Members of Congress are trying to dodge tough issues of the future costs and benefits and delegate key decisions to an enormously powerful, presidentially app o inted National Health Board, a future "Supreme Court of Health." The creation of the National Health Board is a key component in the Clinton plan. Thus, in the latest version of the Clinton plan, offered by Senator Edward M. Kennedy (D-MA), the Senate Com m ittee on Labor and Human Re- -sources last week approved an amendment offered by Senator Jeff Bingaman (D-NM) that practically would turn over to the National Health Board all powers to increase the out-of-pocket costs or cut the health benefits of worker s and their families. Under the Bingaman amendment to the Kennedy version of the Clinton plan, the National Health Board, in "cooperation" with the Congressional Budget Office, is to estimate the cost of the plan's comprehensive bene- fits package. To cont r ol costs, the Board can recommend "adjustments" in the bill's comprehensive benefits package, copayments, deductibles, or "other appropriate programmatic savings." So, while Congress is outlining a package of generous health benefits for Americans, the Bo a rd could limit or deny them under this latest committee-passed "bait and switch" proposal. The Board's "sequestration" powers over medical services and power to institute price hikes for American families would make the Gramm-Rudman automatic cuts in fede r al programs benign by comparison. To avoid this, some Republican members on Ken- nedy's committee hope to strike the provision creating the all-powerful Board. Under the Bingaman amendment, Congress would have 45 days to vote to disapprove recommendations of the National Health Board to trim the health program's future costs. For all practical purposes, these decisions by the National Health Board would be final, for they would not be subject to any amendment or change by Congress. If Congress failed to ac t within 45 days, the decisions of the National Health Board automatically would go into effect. Thus, the Board would dictate to ordinary Americans what benefits, treatments, or proce- dures they could and could not have in such a government-standardized b enefits package, and what prices they would pay. Since the size and cost of the government's standardized benefits package is the major determinant of the cost of health care reform, this constitutes an enormous concentration of government power in an une l ected board over one-seventh of the American economy and the personal life of every American. Abrogation of Responsibility. This latest ploy by certain Members of Congress to dodge political responsi- bility for literally life-and-death decisions and for t he future costs and benefits -flows from the continuing desire on Capitol Hill to create a comprehensive standardized health benefit package for every American. Many Mem- bers of Congress apparently believe that a group of government experts knows what is best for ordinary Ameri- cans, and exhibit a stubborn refusal to allow consumers the choice to buy the benefits they want at the prices they wish to pay. Under the Clinton plan, the Kennedy plan, the Cooper plan, and the Chafee plan, the federal governmen t would establish a comprehensive package of benefits that all Americans must have, whether they want them or not. Many American workers and their families thus would be paying higher premiums or taxes for benefits, procedures, and treatments that they do not want or need-and yet the package may not include other services

they do want. For physicians groups -from chiropractors to in vitro fertilization specialists-it would be finan- cial death not to be included in this standard comprehensive benefit pack age. So, special interest lobbying by medical specialty societies intensifies in a feeding frenzy to gain admittance to the standardized package, bid- ding up benefits and thus driving the entire cost of the government program out of control. In part, tur n ing over decisions about benefits to an independent board is an attempt by lawmakers to escape this pressure. "Yester- day's committee debate," writes Dana Priest in the May 20, 1994, Washington Post, "made it clear that mem-' bers of Congress also are af r aid of their own spending habits." The problem is that Senator Bingaman's "solu- tion" would put enormous powers over every American's access to health care into the hands of an unelected -board. Senator Kennedy's version of the Clinton plan, for instance , contains an even more generous benefits pack- age than the White House bill. Similarly, the working draft in the House Subcommittee on Labor-Management Relations also contains a richer benefits package than that found in the original Clinton plan, and th e subcom- mittee voted on May 17th for an amendment offered by Representative George Miller (D-CA) for an expansion of mental health benefits. Reports Spencer Rich in the May 18 Washington Post, "The voice vote was the third time in recent weeks that advoc a cy groups have won a major victory in their battle for full coverage of mental health benefits despite frequently voiced fears that more generous insurance coverage would 'break the bank'." On May 18, Representative Miller, backed by a coalition of 32 org a nizations called the "Coalition for Oral Health," offered yet another amendment containing $7.3 billion in dental benefits. While Miller acknowledged that his amendment would increase health care costs, he argued that "good health" takes precedence and th a t Congress can "sort out cost problems later." Miller's amendment passed, again in a voice vote. In reality, if Con- gress is able to delegate the tough decisions to the National Health Board, it will be that unelected body that will actually determine wh a t health benefits Americans are permitted to receive. Cutting Quality Care. Of course, the transfer of tough decision-making over costs and benefits to a power- ful government board or commission in no way guarantees an end to Washington's special interes t group lobby- ing. It only changes the focal point of such lobbying to the executive branch or to the independent board. To the extent Congress makes such a board or commission "independent," it makes it an even more powerful regula- tory agency, meaning t hat back-door lobbying counts for everything and ordinary Americans can have little or no influence over the decisions that will affect them so personally. How would the Board actually control the rising costs of the benefits voted by Congress? It could r e spond in two ways. First, it could make Americans pay even more for benefits-including many treatments or proce- dures, such as drug abuse programs or abortion, that they may not want or may even oppose in principle. Sec- ond, it could reduce medical serv i ces to keep within national spending targets. This also means that American families could find themselves denied care for their personal health needs that they had been promised by Con- gress in legislation. Under the Bingarnan amendment, this could happ e n if Congress simply does nothing. Promoting Personal Choice. Instead of setting forth a comprehensive set of government-approved stand- ardized benefits, and thus establishing massive government control over the American health care system, Mem- bers of C ongress should instead allow Americans to pick and choose the benefits they want and the prices they wish to pay. This is what Members of Congress can do each year under the Federal Employee Health Benefits Program. Congressmen and other federal workers a r e not subjected to the straitjacket of a comprehensive, stand- ardized benefits package. The Consumer Choice Health Security Act (S. 1743, H.R. 3698), sponsored by Sena- tor Don Nickles (R-OK) and Representative Cliff Steams (R-FL) would give similar cont r ol over benefits to every working American family, with help for families to obtain at least basic, catastrophic insurance coverage. That proposal puts the ultimate power in the hands of the families.who are affected by health care decisions, where it bel ongs.-The Bingaman amendment would give that power to bureaucrats.

Robert E. Moffit Deputy Director of Domestic Policy Studies

F or further information: Robert E. Moffit, "A Guide to the Clinton Health Plan," Heritage Foundation Talking Points, November 19, 1993. Robert E. Moffit, "Kennedy's Bait and Switch Health Reform," Heritage Foundation Executive Memorandum No. 380, May 16, 1994.

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About the Author

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

Related Issues: Social Security