Contact FreedomWorks

400 North Capitol Street, NW
Suite 765
Washington, DC 20001

  • Toll Free 1.888.564.6273
  • Local 202.783.3870

Blog

    Max Baucus's errors and lies

    09/17/2009

    In a Wall Street Journal op-ed yesterday, Senate Finance Committee Chairman, Max Baucus (D-MT), lays out his lies case for his version of health care “reform".

    The beauty of the recent turn of events/tone in the health care debate is that the public is now actually listening to the content of the Democrats’ statements, including those of Dear Leader, rather than just the mellifluous sound of his voice.

    So when Max Baucus now starts with the same drivel, it’s actually hard to respond with anything but a chuckle.

    I’m going to go through Baucus’s tragi-comic opinion in some detail for purposes of showing just how much BS can be in one article by one senator.

    Baucus says “At the current rate of growth, health-care spending will double in less than 10 years taking $1 out of every $5 we spend."  What he doesn’t tell you is that 47% of health care spending is already done by the government.  What he also doesn’t tell you is that by underpaying medical providers for government-paid health care, it forces up the cost for everyone else as doctors and others must raise prices outside of Medicare/Medicaid to stay in business.  So just why should we support a plan that would obviously make the problem worse rather than better?  As Robert Woodson said at the Steamboat Institute conference last month, “If you keep on doing what you’re doing, you’ll keep on getting what you got.”

    Baucus says “And every day another 14,000 Americans lose their health insurance.” And IBD editorial about health care “reform” misinformation answers Baucus’s claim well:

    A little math shows this is just a scare statistic.

    Multiply it out, and it comes to 5.1 million people losing coverage in a year. Sound scary? Consider that, according to the census, 46.3 million Americans don’t currently have insurance — 600,000 more than last year. That means that, along with 14,000 Americans losing their coverage each day, another 12,400 Americans are signing up for it — even in the middle of a brutal recession.

    Baucus says “The reality is that our plan controls spending without adding to the federal deficit, expands coverage, protects consumers from unfair insurance industry practices, and puts choice back into the hands of consumers and businesses."  OK, that’s laugh-out-loud funny.  He goes on to explain each one, so let’s tackle his lies claims:

    Baucus says “For starters, our plan pays for every cent of new spending without using additional tax dollars. Our plan would lower costs and would not add to the federal deficit. In fact, it would begin reducing the federal deficit within 10 years by containing costs through industry reforms. These reforms would focus on preventing diseases before they become costly to treat and paying health-care providers for the quality of care they deliver not the number of tests they order.”

    However, the AP, hardly a bastion of conservatism, says Baucus’s bill “would cost $856 billion over 10 years” and that “(t)he plan would be paid for with $507 billion in cuts to government health programs and $349 billion in new taxes and fees, including a tax on high-end insurance plans and fees on insurance companies and medical device manufacturers.” Maybe what Baucus meant is that he doesn’t plan to raise income taxes to cover the cost of his “reform"…but even that would be a lie because nobody really believes that the savings Obama and Baucus claim are available will actually be found.  The public believes Baucus is lying as well, with a Gallup survey just this week saying that 60% believe the Democrats’ “reform” plans can’t be accomplished without tax hikes or hurting the quality of care.

    As for reducing the deficit within 10 years, while we haven’t seen the CBO’s scoring of the Baucus bill yet, I’d bet money it won’t validate that claim.  The scoring of the House’s health care “reform” bill, HR3200, which has been publicized as showing the measure increasing our deficit by a cumulative $239 billion over 10 years massively understates the fiscal impact of the bill. This is because the first few years of the bill might lower the deficit through huge tax increases without actually increasing spending on health care whereas after the 4th year of the plan, the deficit explodes, increasing every year, to an estimated $65 billion in the 10th year alone.  In other words, the plan is designed to make the deficit increase look modest for the 10-year scoring period. But in fact, the next 10 years would likely cost closer to $1 trillion if the CBO scored that far into the future. And does anybody believe that the true deficit from government-run medicine won’t be even higher than the CBO scoring, given the lessons of history?

    As far as saving money through preventative medicine, that is simply a myth.  This letter from the non-partisan Congressional Budget Office says “Although different types of preventive care have different effects on spending, the evidence suggests that for most preventive services, expanded utilization leads to higher, not lower, medical spending overall.” (I am not saying that preventative medicine is a bad idea, just that it is not a cost-saving strategy.)

    Baucus says “Our plan would give businesses the freedom to offer any policy they choose, so long as it meets a basic quality standard."  In other words, “our plan would limit the freedo of businesses to offer any policy they choose."  Can you imagine the effect of a national “basic quality standard” given the effect of mandates in many states on the price of health insurance in those states?  For example, NFIB studies the effect of mandates in New York State and concluded that:

    Health insurance benefits mandated by the Legislature cost small businesses annually more than $1,000 per employee. Individual policyholders currently pay $445 and family policyholders pay $1,066 extra every year just to cover state mandates. These policies affect the ability of our small businesses to provide health insurance to their employees and their families, and place the future of employment-based health insurance at risk.

    Studies show that for every 1 percent hike in premium, up to 30,000 people are priced out of insurance. Currently, more than 30 different benefits are mandated in New York, and every year dozens more are proposed and legislation is passed without any objective study to determine their true cost. The resulting higher premiums are making the cost of health insurance simply unaffordable for too many.

    Given the coziness between big business and government (and don’t be fooled that business only likes Republicans), odds are that the ability of the federal government to decide on a “basic” standard will be extremely costly to the wallets and the freedom of Americans.

    Baucus says “Our plan would promote healthy competition and put real choices back in the hands of consumers."  If the Democrats really believed in competition in health care, they would not have fought against the competitive aspects of the Medicare “Part D” prescription drug benefit which is the primary reason that plan has not been costing the government as much as originally forecast.  And more importantly, they would support allowing interstate purchase of health insurance – the single most important reform needed to increase competition and choice and bring down cost.

    Baucus says “Our plan would take the guess work out of buying insurance so consumers could make informed decisions about the insurance policies they buy. Through state-based “insurance exchanges,” individuals and small businesses could shop for plans offered within their zip codes and determine their eligibility for tax credits to buy insurance."  But anyone with an internet connection can already just search for “Colorado health insurance” or “Ohio health insurance", for example, and find multiple web sites which access multiple insurance companies and allow consumers to compare policies and prices.  The “insurance exchange” is simply the federal government’s way to get its nose under the tent as a first step toward Democrats’ goal of “single payer” health care.  There is no part of an “insurance exchange” that can’t be done cheaper and better by the private sector…and probably no part of an insurance exchange that isn’t already being done by the private sector.

    Baucus says “Our plan would force insurance companies to compete on price and quality, and it would stop them from selecting out the healthiest among us and hiding benefit limitations that only become apparent when a person gets sick."  But all that needs to happen to force competition is to allow competition.  You don’t have to force GM to compete with Ford. You don’t have to force Compaq to compete with Dell.  They compete because they can and because they must. The only reason we don’t have enough of that dynamic within the health insurance industry is because government regulations prevent it!

    As for “selecting out the healthiest among us", there is something to that.  For people who are basically healthy with just an occasional minor issue, allowing interstate purchase of health insurance will take care of them because of the tremendous competition it will create.  For those with serious pre-existing conditions, who says that it’s just or sensible to allow them to buy insurance at the same price the rest of the population pays?  Do we or should we let people buy car insurance right after an accident so that the insurance has to cover the repairs?  Remember, insurance is basically “mutual insurance” or shared risk over a pool of participants.  Allowing someone with a pre-existing condition to simply jump into the pool at no increased cost for his condition is nothing more than a penalty on the rest of the pool.  This is particularly true for a pre-existing condition which was acquired during a time when a person was uninsured.

    We certainly do need to find some solution for people with congenital or chronic conditions who are being denied coverage.  But in a sense that shouldn’t even be called “insurance” which by its nature is intended to help cover the costs of unexpected events or illnesses.  Maybe there is even a role for government here, though my libertarian tendencies of course lead me to be skeptial.  In any case, the number of people we’re talking about is far lower than what one should think necessary to even discuss a government takeover of our health care system.  And that is what Baucus’s bill presages, no matter how much he denies it.

    Baucus says “Our plan would not restrict, in any way, the treatments patients receive. Nor would it inhibit the free-market innovations that have contributed to the exceptional medical advances Americans have benefited from in the last century."  Hang on a second…I have to stop laughing before I type any more… In the stimulus bill, a new bureaucracy has already been created which is the first step down the certain road to health care rationing.  Obama’s chief health care advisor, Ezekiel Emanuel (brother to chief-of-staff Rahm Emanuel) has publicly called for restricting care to the elderly in the interest of “sustainable medicine".  (It should also be noted that Dr. Emanuel has said that “Vague promises of savings from cutting waste, enhancing prevention and wellness, installing electronic medical records and improving quality of care are merely ‘lipstick’ cost control, more for show and public relations than for true change."  Even a blind squirrel finds an occasional nut…)

    And how can Baucus say that his bill would not inhibit medical advances given the massive tax he plans to impose on medical device makers?  What type of policy could conceivably inhibit innovation more than that?  Among the many lies and contradictions in Baucus’s op-ed, this is one of the most important even if one of the least widely known, particularly if you’re concerned with whether American health care actually helps people live longer or better lives.  The trade association of medical device companies has released an aggressive statement against the proposal with the title “Innovation Tax Will Stifle Medical Progress.” In a sense, the medical innovation tax is a remarkably boneheaded idea, but it also shows a lot about Democrats, namely about their stupidity and their fascist economic tendencies – by which I mean their desire to force nominally private companies to behave in the service of their government.  They already came to a “deal” with drug companies – which leading Democrats almost instantly said wasn’t worth the paper it was unwritten on.  Now they’re going to try to force the medical device companies to cave in and do something, though exactly what remains unclear.  This medical device tax is nothing short of shameful…and I hope that even most Democrats see it that way. I believe that there will be enough pushback from Democratic senators that Baucus will be forced to pull this provision…which will be yet another crack in his dam of health care reform lies.

    Baucus says “Our plan would not put government between patients and doctors, and it wouldn’t force anyone to change his or her coverage. If you like the care you have today, you can keep it."  I’ve already dealt with the first statement: A bureaucracy has already been created which does exactly what Baucus says he won’t do.  Furthermore, both England and Canada ration care, which is precisely putting government between patients and doctors.  And what choice do they have? After all, when you subsidize something, you get more users of it.  In order not to bankrupt the country when they make medical care “free” or even “cheap", they will have to come between patients and doctors.  And to the extent that Baucus’s bill is like HR3200 (or gets modified toward HR3200 in conference), the idea that you can keep your coverage is basically a lie.  In the House bill, you can keep your coverage only until anything about it changes; then you have to switch to a government-approved plan.

    Finally, Baucus says “The time has come for action. And we will act. In the next several weeks, the Senate Finance Committee will do its part to control costs, protect consumers from unfair insurance industry practices, and put America back on a path toward fiscal sustainability."  The first thing that needs to be emphasized regarding “time for action” is that those of us who oppose Obamacare (or Baucuscare) are not supporting the status quo. We agree that something needs to be done.  But that something needs to be policy changes that encourage competition and remove the dead hand of government, whereas the government’s plans do just the opposite regardless of their rhetoric.

    There is NO Democrat bill that will control costs or put America back on a path toward fiscal sustainability. None.  And as for “unfair insurance industry practices", that’s not going to sell well with the public either.  Yes, we know the insurance companies do some things we don’t like.  But we also know that the vast majority of Americans are happy with their health care and even their insurance.  And we know that, with Medicare as an object lesson, there is no reason to think that government will do anything but get in the way, raise costs, discourage doctors from working (as this IBD editorial and survey describe), and generally destroy the world’s best, if still quite imperfect, health care system.

    As I said at the beginning of this rather long note, the public is now listening with a skeptical ear to the words of the Democratic leadership.  There are a lot of reasons to believe they’re lying and few reasons to believe that they’re truthful…and fewer reasons to believe they understand the industry they’re trying to “reform".

    What we’ll really need to see is whether the Democrats’ health care bill will cover the plastic surgery necessary to remove all their extra nose tissue following the daily barrage of lies and misinformation they’re dumping on the American people.