Health reform won’t happen this year; ignore all the brave happy talk – there will be no bill that reforms the insurance markets, lowers costs, and/or expands coverage.
You can’t have insurance market reform – ending medical underwriting and risk selection – without a strong mandate. And you can’t force people to buy health insurance they can’t afford without big subsidies. The current budget deficit and recession mean subsidies aren’t a reality. There’s just no way a family making $75,000 can afford a $15,000 health insurance premium (plus out of pocket expenses) without a big subsidy.
As to cost reduction, Congress has shown itself fundamentally unable to enact meaningful cost reductions. The Republicans painted themselves into a corner with their ‘death panels’ and ‘government-controlled health care’ memes. They could have staked out a credible and creditable position as the responsible adults in the debate by getting tough on costs as a way to help business, reduce future costs and thereby deficits and tax burdens.
(But then what do you expect from the party that gave us Part D, the biggest entitlement program since Medicare, along with its $8 trillion ultimate unfunded liability.)
Not that the Democrats gave them much choice. Senate Dems thought they didn’t need the GOP, believing they could ram thru a bill they drafted on the strength of their supermajority. And perhaps they could have, if the Mass Senate race hadn’t interfered. Sadly, the Senate bill showed our political process at its worst, with glutinous Senators selling their votes for heaping helpings of pork larded with political sweets – clauses on abortion, immigration, and taxes.
The cost estimates were misleading at best; none factored in the quarter trillion deficit we are carrying due to the Medicare physician reimbursement fiasco. The quick fix that’s in place today has raised physician compensation by a whole percentage point, making it seven years out of eight that Congress has failed to restrain the growth of Medicare’s physician spending.
Given the present environment, I don’t see a meaningful effort to do anything different. Thus next year we’re going to face an even larger deficit, as our feckless elected officials kick the can further down the path.
No, reform won’t happen this year, and isn’t likely in 2011.
What does this mean for you?
Family insurance premiums of $30,000 in ten years.
Jan
21
Why couldn’t a family making $75K/yr afford a $15K policy? This is exactly what’s happening now if you make $60K/yr and are enrolled in an employer-sponsored family policy.
The health reform bill is dead. It is a shame but you probably won’t see this again, for many, many years to come. The democrates have much to blame for this.
Seeing how well you did with your yearly predictions, I guess I am not too worried about your current prediction. I for one am glad this bill is dead and everyone is going back to the drawing board.
LP – feeling a little snarky today?
Lets see, I was right on four out of eight, wrong on three, and the tossup looks increasingly ‘right’, so I’ll end up with five out of eight.
There’s always a risk when one goes public with predictions, the risk being exposure to carping by those who don’t take any risks. Where can one read your prognostications?
Paduda
Brad – thanks for the comment. In the case of an employer-sponsored program, the family doesn’t have to come up with the $15k as the employer is paying most of the premium.
If the employer is not, the current Senate bill would expect that family to cover the entire cost of their health insurance themselves – a cost that is 20% of their gross income.
That’s just not realistic.
Paduda
The family may not have to come up with $15K, but it is part of a total compensation package. If mandated to buy insurance outside of this construct, I am assuming (perhaps naively, but I think not)salary would increase by $15K as the employer is no longer acting as the middleman.
Brad – I doubt very much an employer would hand over $15k in additional salary, plus the additional tax due on this as income.
I don’t doubt that an individual policy would cost about 20% more than similar coverage in a group plan.
Paduda
When two parties are out to kill one another, it is the citizens in the middle that pay. We need reform that addresses right and left. Oh, yes, that’s what us independents say. We’re ignored until our votes are needed. The white coat of paint will come next Wednesday — instead of collaborative, transparent discussions to help Americans overcome the self-centered power mandates, we will all pay the price. This is a failure of the government of greatest nation on earth to serve its own people.