The Health Care Expansion Begins

Robert Moffit and Greg D’Angelo have an excellent column on RealClearPolitics.com today about two health care bills being considered in the Senate right now. They begin the piece this way: "the Senate is eying two plans to provide health coverage to those currently lacking insurance. Plan 1 would extend coverage to around 4 million Americans for billions of dollars. Plan 2 would extend coverage to 24 million for no more than we're spending now. Guess which approach Senate leaders are pushing? If you picked Plan 1, congratulations! You know that Washington almost always favors the least effective and costliest option available."

Not only does this beautifully point out one of the problems with the way government runs things (which I think we all acknowledge), but it's a serious issue to screw up on - it will likely be one of the major topics for next year's presidential debate. The general stance of the Democrat candidates is universal health care, while the general stance of the Republican candidates leans more toward healthcare reform by way of private insurance. More on health care in a future blog. But for now, this column provides a good first look at the two plans.

Moffit and D'Angelo write that the issue at hand is the reauthorization of the State Children's Health Insurance Program (SCHIP) -- a 10-year old program designed to subsidize health coverage for kids in low-income families that can't afford insurance but make too much to qualify for Medicaid. The Plan 1 above was introduced by Finance Committee Chairman Max Baucus (D-Mont.), and would loosen SCHIP eligibility requirements so the subsidies could flow to families earning three times the federal poverty line -- about $62,000 for a family of four. The problem here is that this program was intended to help children of low-income families...would you consider $62,000/year 'low' income? Hardly!

But wait, there's more.

Despite this massive expansion, half of the new children covered by this program will actually be middle class children who would lose their existing private coverage. The net effect of this bill would simply be to shift health insurance coverage from the private sector to the public sector. "In other words, the approach does far more to increase the government's role in controlling and financing health care than it does to expand health coverage."

And here's the kicker: funding SCHIP at its current level will cost $25 billion over the next 5 years. Baucus' bill would add an additional $35 billion to that, for a total cost of $60 billion over five years!

Moffit and D'Angelo then list a string of dependencies needed to provide the necessary funding:
- First, it would jack up federal tobacco taxes sharply -- to $1 per pack on cigarettes and up to 10 bucks per Havana on cigars (a 20,000% tax increase!!!. But even that is not enough to cover the costs...
- To get the higher "sin" taxes to generate the revenue needed to cover this new, middle-class entitlement, Congress would have to recruit at least 6.3 million new smokers within five years -- nearly three for every uninsured child added to the SCHIP rolls. To keep the program afloat for 10 years, 22 million new smokers would be needed. But even that is not enough to cover the costs...
- To keep the cost estimate at "only" $60 billion over five years, Baucus' bill projects spending will plunge 80 percent in the fifth year -- from $16 billion to $3.3 billion. The only way this could happen is if states kick 80 percent of the kids out of SCHIP in year five -- a political impossibility. I defy you to name one government program that has ever truly been 'cut', especially one in regard to children!

Now, let's look at Plan 2.

Introduced by Sens. Richard Burr (R-N.C.), Tom Coburn (R-Okla.), Bob Corker (R-Tenn.) and Mel Martinez (R-Fla.), this proposal forsakes the path toward federalized health care and embraces tax reforms that would make the market work and make private health coverage affordable for tens of millions of those currently uninsured. It would offer generous tax credits for individuals and families, allowing Americans to own their own health insurance and take it with them from job to job. This budget-neutral plan would reduce the number of uninsured by an estimated 24 million over the next 10 years, six times the 5-year Baucus plan.

This is just the first example of the tax hikes and problems involved with 'universal' health care; many more will come out over the next few months, I assure you. At the risk of sounding like a broken record, I urge you to REMEMBER when the next election rolls around who is trying to place responsibility and power into YOUR hands, and who is proposing these massive tax hikes and government expansions.

There's my two cents.