ObamaCare Updates

AMA [Tevi Troy]

President Obama is speaking to the American Medical Association today to try to get its support for his version of health reform. To succeed, he will have to convince the AMA, and the American people, that the government won't be taking over health care, and that he knows how to pay for his plan.

Doctors won't like a "public plan," because they too often lose money on current "public plan" patients — those in Medicare. A broad-range public plan for non-retirees will over time shrink the number of Americans in private coverage, because some employers will stop offering plans, and more and more individuals will migrate towards the government plan. As Scott Harrington writes in today's Wall Street Journal, a public plan would soon become the only plan. This is why not only doctors, but also some key Blue Dog Democrats, are opposed to the government plan.
In terms of cost, estimates are in the range of $1.2 trillion or higher. President Obama has been talking about higher taxes, provider cuts, and taxes on comprehensive, employer-provided health insurance to pay for it. These ideas won't be popular among doctors, either.

—Tevi Troy is the former deputy secretary of health and human services, and author of Intellectuals and the American Presidency.


'That Is a Fact'

"Health-care reform is the single most important thing we can do for America’s long-term fiscal health." The president right now, speaking to the AMA in Chicago.

And, of course, anyone who raises questions about his plan — and how the "facts" may not add up — is just trying to scare you ...


More on the AMA [Tevi Troy]

Here's how President Obama handled the two health-care worries I raised earlier — high costs and concerns about a government-run public plan — in his AMA speech earlier today.

With respect to the public plan, he asserted, quite clearly and multiple times, that no one would lose their current coverage or have to change their current doctor. He may be right that no one would immediately have to make these changes, but that misses the larger point of what would happen over time. The notion of crowd out, where privately-insured people move to publicly subsidized plans when they become available, is not an overnight phenomenon so much as over time migration. The more important point is that the president issued his clearest endorsement yet of a public plan, giving us an indication of what the White House thinking is on this flashpoint issue.

As for the cost issue, it is clear that the administration senses some vulnerability in this area, and so the president laid out a long list of specific-sounding cuts in a host of areas: Medicare Advantage cuts — $177 billion; "incentives for more effective care" — $109 billion; more efficient drug purchasing — $75 billion; and that old standby, reducing "waste, fraud, and abuse" — $1 billion. Some of these are inarguably good ideas — no one is opposed to stopping fraud or waste, for example — but it is not clear if these ideas will lead to the necessary savings or will join the long list of promised health-care savings that never seem to materialize. If that is the case, then the unmaterialized savings turn into bigger deficits and ultimately into higher taxes.

It was also interesting to see that the president did raise malpractice costs, one of the AMA's biggest concerns. After doing so, he quickly said that he would be opposed to judgment caps, indicating that the trial bar does not need to worry about significant efforts to reign in that particular form of abuse.


'Cuts' in Medicare and Medicaid [Rich Lowry]

Remember when Newt Gingrich was savaged for proposing reductions in the rate of growth in Medicare and Medicaid? Obama seems to be doing a Newt almost every other day, as he reaches for a way to pay for his health-care program. How long before opportunistic Republicans begin warning seniors that Obama is putting their Medicare at risk, in one of those turn-about-is-fair-play Washington moments? The proposed Obama savings don't come from innovative reforms but from simply squeezing providers, which will have predictable negative consequences.

In fact, as NBC points out, Peter Orszag himself noted these consequences when he was head of the CBO:

An argument against this option is that reducing the payment updates might cause some providers to lower the quality of care they provided or to stop serving Medicare beneficiaries altogether. In addition, different types of health care services may be more capable of achieving such productivity increases than others are. If so, this option could cause considerable hardship for providers that are not able to increase their productivity by the amount assumed in the update.


What Obama Used to Think of Medicare Cuts [Rich Lowry]
A friend in Cantor’s office sends this nugget from Obama on the campaign trail:

Then-Senator Barack Obama Characterized Finding Savings In Medicare As “Drastic Cuts” That “Would Mean Fewer Places To Get Care And Less Freedom To Choose Your Own Doctors” And “It Ain’t Right.”

THEN-SEN. BARACK OBAMA: “Senator McCain and I have real differences on this issue. Senator McCain's been eager to share some of the details of his health care plan, but not all of them. It's like those ads for prescription drugs. You know, they start off, everybody's running in the fields and everybody's happy and then there's the little fine print that says, you know, side effects may include. Now, first of all, we found out that Senator McCain wants to pay for his plan by taxing your health care benefits for the first time in history. Just like George Bush. That was bad enough. But ‘The Wall Street Journal’ recently reported that it was actually worse than we thought. It turns out Senator McCain would pay for part of his plan by making drastic cuts in Medicare. $882 billion worth. $882 billion in Medicare cuts to pay for an ill-conceived, badly thought through health care plan that won't provide more health care to people. Even though Medicare's already facing a looming shortfall. Now, this should come as no surprise. It's entirely consistent with Senator McCain's record during his 26 years in Congress, where time and again he's opposed Medicare. In fact, Senator McCain has voted against protecting Medicare 40 times. Forty times he's failed to stand up for Medicare. So what would Senator McCain's cuts mean for Medicare at a time when more and more Americans are relying on it? It would mean a cut of more than 20 percent in Medicare benefits next year. If you count on Medicare, it would mean fewer places to get care and less freedom to choose your own doctors. You'll pay more for your drugs. You'll receive fewer services. You'll get lower quality care. I don't think that's right. In fact, it ain't right.” (Senator Barack Obama, Remarks, Roanoke, VA, 10/17/08)