Thursday, September 10, 2009

Comments on The Speech

This will no doubt be but one small voice among many louder ones, but here follows some thoughts on the speech, based on the text "as prepared for delivery" (so there might be some differences between it and the actual text as spoken).

Typical Obama riff in the early going:

But thanks to the bold and decisive action we have taken since January, I can stand here with confidence and say that we have pulled this economy back from the brink.

Sure. No credit goes to any steps taken before January, like TARP, the bailouts of AIG and the car companies, etc. I'm the first to agree that some of those Bush-era actions were mistakes. But they were purely in line with Obama's later actions, so ignoring them is disingenuous in the extreme.

There are now more than thirty million American citizens who cannot get coverage.

Dana Perino emailed The Corner about this, writing: "So, now it's 30 million? What happened to the other 17 million he's been talking about? We must be doing something right." Answer: the rest are illegal immigrants, not American citizens. Maybe this is a subtle step in the right direction for Obama, since he's been under fire for potentially providing free health care to illegals.

Then there's the problem of rising costs. We spend one-and-a-half times more per person on health care than any other country, but we aren’t any healthier for it. This is one of the reasons that insurance premiums have gone up three times faster than wages.

That might be one reason, but it isn't the main reason. The main reasons have to do with skewed incentives in employer-provided health care, lack of inter-state insurance, and increasing government mandates on employer-provided health care.

And it's why those of us with health insurance are also paying a hidden and growing tax for those without it - about $1000 per year that pays for somebody else's emergency room and charitable care.

Danger, President Obama! Danger! These questions of cost are a minefield, aren't they? Maybe it's best not to bring up how much tax we have to pay for somebody else's care when you're trying to sell a system that would, ultimately, tax you to pay for somebody else's care. (Also, his number is incorrect, and I'll be interested to see if mentions this. Total spending on uncollectable medical claims is about 3% of total medical care spending, or about $75 billion. There are over 250 million Americans with health insurance, so the average is more like $300/year.)

There are those on the left who believe that the only way to fix the system is through a single-payer system like Canada's, where we would severely restrict the private insurance market and have the government provide coverage for everyone. On the right, there are those who argue that we should end the employer-based system and leave individuals to buy health insurance on their own.

That's Obama the Centrist talking. I have some lefty friends who will be severely pissed by this. They apparently don't realize that if he wins this argument, Obama does them much more good than they deserve - the sort of health reform he favors will lead inevitably to single payer. He knows this. He's playing a clever long game.

Well the time for bickering is over. The time for games has passed. Now is the season for action.

Wait, this is still a democracy, right?

Anyway, now he moves on to the meat of the proposal. There are three goals:

[1] It will provide more security and stability to those who have health insurance. [2] It will provide insurance to those who don't. [3] And it will slow the growth of health care costs for our families, our businesses, and our government.

OK. Let's keep these points in mind. I've numbered them for later reference (the numbers are not from the speech).

Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition.

That's going to impact point (3), isn't it? Presumably, he will offer some mitigating cost control later (and it'll be some form of rationing, mark my words). What stops a person from waiting until they get sick to sign up for gold-plated health care? Stay tuned.

As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most.

Interesting. In the past, Obama has mentioned putting off many of the provisions in his plan until 2013 or so - now he says they will take effect "as soon as I sign this bill."

Obviously, this point will impact (3) as well.

They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime.

Oh yeah, so will this one.

And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies - because there's no reason we shouldn't be catching diseases like breast cancer and colon cancer before they get worse. That makes sense, it saves money, and it saves lives.

The cost just keeps going up, doesn't it? Now he wants to require insurance to cover checkups. Why not require car insurance to cover oil changes, too? It's also completely incorrect that this saves money. Study after study shows that preventive care costs more money. (I'll let him slide with "it saves lives", although obviously the best it can possibly do with current technology is to extend lives, and there's some question about how much even of this it manages to accomplish.)

That's what Americans who have health insurance can expect from this plan - more security and stability.

...and expect your premiums to double. And expect more employers to drop it as a benefit, especially employers with lots of low-wage employees.

We will [create affordable health insurance options] by creating a new insurance exchange - a marketplace where individuals and small businesses will be able to shop for health insurance at competitive prices.

Great, Mr. President - but any word on differential tax treatment? That's a killer for employees trying to get health coverage other than through their employer, and it's not so great for lower-income self-employed folks, either. This tax benefit is worth as much as 35% of premium cost, so unless you can bring costs down that much with exchanges, getting rid of the tax disparity is better.

This exchange will take effect in four years, which will give us time to do it right.

Ah, there's that 2013 stuff. Is it wrong that I read this as: We have no confidence in this provision, so we're putting off implementation until after the 2012 election, and giving ourselves time to drop it entirely later?

That's why under my plan, individuals will be required to carry basic health insurance - just as most states require you to carry auto insurance. Likewise, businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers.

If I drive without auto insurance, I have my license taken away. What gets taken away if I'm charged with "living without health insurance"?

Also, "basic coverage" will inevitably be defined upwards in the same way that mandates on employer coverage have in states like New Jersey. This is one of those slippery slope items to single payer. As I said before, Obama is playing a long game here. If we're lucky, the impatient Left won't let him succeed at it. But the Right has to pressure him, too, and not let him get away with thes sort-of-reasonable-at-first provisions.

But an additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange. Let me be clear - it would only be an option for those who don't have insurance. No one would be forced to choose it, and it would not impact those of you who already have insurance.

Polling on "the public option" must be terrible. He almost never even says "public option" in the entire speech, and the one time he does it's couched in so much explanatory text that one almost misses it.

But two points about it are still worth making: First, he must really think we're stupid if he thinks we'll believe a non-profit, government subsidized "company" operates on a level playing field with for-profit insurers. Second, if for-profit insurers were so good at squeezing every last dime out of their customers, how come they've been less profitable than the S&P 500 for the last 10 years?

And they'd be right if taxpayers were subsidizing this public insurance option. But they won't be. I have insisted that like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects.

Please! And what happens if the public option loses money and can't make it? I suppose he just lets it go under, dusts his hands, and says, "Oh well, we tried." Of course not. It gets the old GNMA treatment, because it'll be Too Important To Fail.

It would also keep pressure on private insurers to keep their policies affordable and treat their customers better, the same way public colleges and universities provide additional choice and competition to students without in any way inhibiting a vibrant system of private colleges and universities.

Guess he learned that the old "post office/FedEx" comparison didn't really work, eh?

Here's what you need to know.

Does this strike anyone else as condescending in the extreme? Obama does this several times in this speech, as if I'm too stupid to comprehend the details (of which, let's face it, there really are none), so here's the gist. But the devil is usually in the details. I'll decide what I need to know, thanks.

First, I will not sign a plan that adds one dime to our deficits - either now or in the future.

Interesting. Polling obviously shows huge concern about mounting deficits, and our Chinese (and other) lenders probably aren't be too happy about them either. But don't be fooled: there's a difference between "deficit reduction" and "cost reduction." He can keep the bill deficit neutral by finding enough additional revenue sources, but the bill would still cost the same thing to the American taxpayer.

Second, we've estimated that most of this plan can be paid for by finding savings within the existing health care system - a system that is currently full of waste and abuse.

Study after study shows this not to be true, unless he's talking about rationing.

...not a dollar of the Medicare trust fund will be used to pay for this plan.... Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan.

There's a logical problem here. Currently, Medicare is our largest unfunded budget item - something like $60 trillion in present value deficit. So unless he reduces waste by more than $60 trillion, he's not going to have a single dime to apply towards paying for his plan, unless he takes some of those trust fund assets. I don't see how he escapes this bind.

Much of the rest would be paid for with revenues from the very same drug and insurance companies that stand to benefit from tens of millions of new customers. This reform will charge insurance companies a fee for their most expensive policies, which will encourage them to provide greater value for the money...

You can see how single-payer is coming, right? Every reform targeted at insurance companies will simply make their businesses less profitable, and to top it off they'll have a non-profit, tacitly subsidized by the taxpayers, pressuring them from the bottom. Give it a decade, and they'll be out of business. Then the government steps in. Very slick, Obama.

And if we are able to slow the growth of health care costs by just one-tenth of one percent each year, it will actually reduce the deficit by $4 trillion over the long term.

Of course, there's that $60 trillion hole already in Medicare...

I will not stand by while the special interests use the same old tactics to keep things exactly the way they are. If you misrepresent what's in the plan, we will call you out. And I will not accept the status quo as a solution.

Would that the President take the same pledge, but in these very sentences he breaks it. We all know reform is needed. But he wants it his way or the highway. His opponents don't want the status quo, they just want reforms that aren't currently on the table. Our only shot is to kill the current plan and try again later when the political environment is more favorable. I won't misrepresent what's in his plan, but it would be nice if he didn't misrepresent his opponents' arguments.

But they also understood that the danger of too much government is matched by the perils of too little; that without the leavening hand of wise policy, markets can crash, monopolies can stifle competition, and the vulnerable can be exploited.

Just representative of some nice finishing riffs. I disagree, but we know Obama is a liberal. This is as good a defense as any, I suppose.

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