Something to really think about-read carefully

Health Reform Divide Deepens As Price Climbs
By DAVID HOGBERG
INVESTOR'S BUSINESS DAILY | Posted Wednesday, June 24, 2009

Any lingering hope that health care reform would be bipartisan in the House seemed dashed at a Ways and Means Committee hearing on Wednesday.

Democrats stood firm supporting their plan, while Republicans went on the attack.

"We sincerely wish that health reform could be a bipartisan effort," said Ways and Means Chairman Charles Rangel, D-N.Y.

But the bill House Democrats released last Friday displayed no hint of compromise. It not only includes a public plan — which Republicans and insurers say would unfairly crowd out private care — but also a Medicaid expansion, subsidies for those up to 400% of the federal poverty level, and individual and employer mandates. It also gave little guidance on how the proposal might be paid for.

Recent cost estimates of similar, smaller Senate bills have put Democrats on the back foot. A new eye-popping cost estimate of the House bill by HSI Networks emboldened committee Republicans.

"This report makes it clear that this bill will cost $3.5 trillion," said ranking Ways and Means member Dave Camp, R-Mich. He also complained that Congress didn't know how it would be paid for.

Democrats criticized the HSI report for leaving out assumptions about cost savings and stressed that the firm did work for John McCain's campaign last year.

The Congressional Budget Office is expected to release its official cost estimate of the House Democrats' bill within a few days.

Blame Canada

Republicans were aided by witness Dr. David Gratzer, a physician who practiced in Canada and is now a senior fellow at the conservative Manhattan Institute. He warned that a public plan would move the U.S. toward a Canadian-style single-payer system.

"I too believed in some level of socialized medicine," he said. "But I was mugged by reality. I've seen the waiting lists and the queues for care and how unsatisfying it is."

Gratzer's testimony raised the ire of Rep. Sander Levin, D-Mich.

"It's a straw man," he said. "We're not proposing a Canadian system. And there is no way we are going to allow the opponents of reform to mischaracterize what we're proposing."

Levin added, "It is true at this point that we do not indicate how we'll pay for it. But I don't think (the HSI) study should scare us into inaction."

Rep. Ginny Brown-Waite, R-Fla., walked through the door Levin opened: "I just wanted to list some of the suggestions thus far."

She then ran down a list of proposed taxes, including taxing health benefits, penalties for not complying with employer and individual mandates, and taxes on soft drinks. Ways and Means also has mulled the idea of a value-added tax.

This May Hurt A Bit

Over in the Senate, Kent Conrad, D-N.D., conceded that reform may require taxing employer-based health benefits. "It's hard to see how you have a package paid for" without it, he said.

He also said limiting high earners' deductions on mortgage interest, charitable gifts and other items may be back on the table despite lawmakers' dismissal of the idea this spring.

Talk of tax hikes is straining bipartisan efforts in the more collegial Senate. Republicans inclined to work with Democrats are already wary of the proposals' costs.

"I think that is so," said Sen. Jim DeMint, R-S.C. "There is outrage across the country about spending, borrowing and debt, and then you are talking about trillions more for health care . . . I think people are rebelling."

DeMint unveiled his own health care plan Wednesday that focuses on vouchers for those without employer-based coverage and letting people buy insurance across state lines. It may cost less than the Democrats' plans, but he did say it would cost $700 billion over 10 years.

Public Divide

Sen. Chuck Grassley, R-Iowa, has worked with Finance Committee Chairman Max Baucus, D-Mont., on a bipartisan plan. He said Wednesday that a broad outline should be out by the end of the week. Yet Grassley also said that a public plan would still be a deal breaker for the GOP.

But without a public plan, many Democrats may not go along.

"Polls indicate that the American people overwhelmingly believe that a competitive public option is essential so that people can go to the exchange and pick and choose with a variety of private options to get the care that meets their needs," Rangel said.

Other surveys, which Republicans prefer to cite, show Americans unwilling to pay much more in taxes for health care reform and increasingly worried about budget deficits.

Democrats on the Senate Finance panel expressed frustration.

"We're just continuing to talk, not getting anywhere," said Jeff Bingaman, D-N.M., according to press reports.

Yet DeMint conceded that Democrats are still in the driver's seat:

"It all depends on the American people. Republicans don't have enough votes to stop anything. But if the American people are strong enough, a few Senate Democrats will start to think they can't go along with this kind of spending."