The House Health Care Bill: A Blueprint for Federal Control

Here are some excerpts from a “WebMemo #2515” published by The Heritage Foundation regarding the recently unveiled, mammoth 852-page blueprint for overhauling Americans’ health care: the draft “Tri-Committee Health Reform Bill.”

Remember what you will be reading below are only excerpts from the text, if you would like the complete text to get the context you can read the original post by clicking here. For Freedom’s Sake.

July 1, 2009

The House Health Care Bill: A Blueprint for Federal Control

by Robert E. Moffit, Ph.D.

The U.S. House of Representatives leadership recently unveiled a mammoth 852-page blueprint for overhauling Americans’ health care: the draft “Tri-Committee Health Reform Bill.” It is the product of three major House Committees with jurisdiction over health policy–Education and Labor, Energy and Commerce, and Ways and Means. If enacted, this comprehensive legislation would amount to federal control of the health care sector of the economy, with the implementation of far-reaching policies impacting doctors and patients in the public as well as the private sector.

Like the U.S. Senate Health, Education, Labor and Pensions Committee bill, the House bill would create a new public plan to compete with private health insurance in a national health insurance exchange; impose mandates on individuals and businesses to buy health insurance coverage or be subject to tax penalties; and allow the federal government to control, standardize, and regulate health insurance, defining what is and is not “acceptable coverage” for American citizens.

The “Public” Plan

Contrary to the House sponsors’ claims, it is hard to imagine a “level playing field” where Congress creates a special government plan to compete against private health plans while also creating the rules for its competitors.

While the House bill would set up an account within the Treasury for the deposit of startup funds and premiums, the bill would also require taxpayers to retain the risks and depend on congressional restraint in the appropriation of additional taxpayer funds for the public plan. In light of recent congressional bailouts of automakers and financial institutions, belief in such restraint would amount to a triumph of imagination over experience.

A National Health Insurance Exchange

Under the House bill, Congress would not forge a federal-state partnership; rather, it would enact federal domination of the states. It would also undermine, not advance, state innovation in the provision of new health insurance options.

Federal Benefit Setting

The House bill would require every American to have health insurance coverage that Congress would define as “acceptable coverage.” Under the terms of the bill, existing coverage at the time of enactment would be “grandfathered,” but health plans would be legally required to conform to federal standards over time. Eventually, health insurance in the individual market would no longer be considered “acceptable coverage.”

Because Congress would centralize decision-making over health insurance in Washington, taxpayers can expect a replay of the frenzied special-interest lobbying that characterizes benefit mandate decisions in state legislatures and agencies.

In addition, government health benefit decisions often include coverage of controversial items such as abortion. A number of House Democrats are concerned that the House bill would become a vehicle for taxpayer subsidization of abortion coverage.

Mandates on Individuals and Businesses

“Medium and large” employers would be required to offer an “acceptable” health plan, under the terms and conditions of the House bill, or pay an “assumed” 8 percent payroll tax. As economists generally note, the costs of an employer mandate are invariably passed onto employees in the form of wage or compensation reduction or even job loss. There is yet to be an econometric analysis of the impact of these provisions of the House bill.

Promises, Promises

The President has said repeatedly that if Americans like their private health insurance coverage, they would be able to keep it. But in fact, the incentives built into the House bill–a combination of mandates and the provision of a public plan–would guarantee that millions of Americans would lose their private coverage, regardless of their personal preferences.

In the Senate, the leading bill would add $1 trillion to the deficit over 10 years, while pushing millions of Americans out of their employer-based coverage. While the President insists that health care reform should be “deficit neutral,” the cost of the House bill–both quantifiable and not–is yet unknown.

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