Health care reform passes the House

Added on November 13, 2009
A few more remarks on US health care reform: Why should employers provide health care for their employees? That is an individual decision. In Germany, you can see that it can become a problem when rising health care costs and wages are coupled, especially in an aging population. - Medicare and Medicaid are already entitlement programs. You cannot touch them without making voters angry. Will a public option increase competition and lower prices? Anything public is taxpayer funded or it is not public. Have you never heard of Medicare and Medicaid, of Fannie Mae and Freddie Mac, in short: of black holes? - According to the House Bill, small businesses with annual payrolls less than $500,000 would be exempt from providing health care to their employees. Employers with payrolls between $500,000 and $750,000 would have to pay a 2%-6% tax, employers with a payroll above $750,000 would have to pay an 8% insurance tax for their employees. Not very promising for them. - The insurance-market reform goes in the right direction. What we need around the globe are real markets for drugs, insurances, doctors and hospitals, not micromanagement as proposed in the 1990-page bill, which would backfire if implemented. - The current system has to be reformed. The GOP's main objective seems to be to sabotage the reform without coming forward with a substantial counterproposal. The welfare state is not the solution. Inaction either. The new German coalition is currently trying to reform its health care system too by introducing more market elements. Who will come up with the better system?

Article added on November 8, 2009  
Late on Saturday November 7, the United States House of Representatives, the lower house of the bicameral U.S. Congress, has passed the most important health care reform since the creation of Medicare insurance program for the elderly in 1965. 220 members of the House voted for the bill, 215 against it.

However, the House has just passed its version of the 1990-pages bill. The Senate will have its say too. In the end, both houses of Congress will have to agree on the final version. Save your cheers or boos for later.

The 1990-pages Affordable Health Care for America Act is just another bureaucratic monster like the “Stimulus Bill”. Among us, if Obama wants another “stimulus”, he should turn to Michelle. And no, we don't want to know any details about it.

According to estimates by the Congressional Budget Office, the Affordable Health Care for America Act in the form passed by the House would enlarge health insurance to about 96% of legal residents in the United States, up from only 83% now. Some additional 36 million Americans would be covered. The bill also covers the “doughnut hole”.

The health care overhaul is unfortunately not only a step in the right direction. Private insurers would have to compete with public insurance plans. Another subsidized option will not make health care cheaper. The additional cost is estimated at about $1 trillion over a decade. Of course, no one knows how much it will really cost. Republicans are right that it is a step towards a European welfare state.

At the same time, the Affordable Health Care for America Act calls for several hundred billions of dollars in cuts to Medicare. The cuts are aimed at eliminating Medicare's wasteful spending. It could end up eliminating Obama's support by the elderly who are worried that their health care coverage is in danger. What is certainly in danger is the aim of a balanced budget.

The Affordable Health Care for America Act levies a 5.4% tax on individuals earning more than $500.000 a year as well as couples earning over $1 million a year. All but the smallest employers would be forced to provide health insurance to their employees and pay for most of the premium, otherwise they could be fined up to 8% of their payroll.

Health care coverage to everyone regardless of pre-existing conditions is surely a must in any decent society. However, anything socialized is not working. You have to push the private companies to compete with each other. The present bill does not avoid public options; incidentally, Medicare for the elderly and Medicaid the poor are already at least partly public programs.

The new bill does not tackle the malpractice system, the problem of lawsuit abuse which pushes health care costs up. Trial and injury lawyers perverted consumer protection. Doctors try to protect themselves by ordering costly and time consuming additional tests before helping patients.

Charles Krauthammer argued in a Spiegel interview: “It is absolutely crazy that in America employees receive health insurance from their employers -- and at the same time a tax break for this from the federal government. It's a $250 billion a year loophole in the government's budget. If you taxed healthcare benefits, you would have enough revenue for the government to give back to the individual to purchase their own insurance. If you did those two reforms alone, you would have the basis for affordable health insurance in America.” Maybe something to consider.

The Democratic Speaker Nancy Pelosi scored a victory by passing her president's health care overhaul. But she had to compromise. Last but not least, an anti-abortion amendment was passed. It was primarily sponsored by her fellow Democrat Representative Bart Stupak from Michigan, who lead a group of 40 anti-abortion Democrats who could not be ignored.



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The sole dissenting - yes voting - Republican Anh “Joseph” Cao from Louisiana

The Republican House Minority Whip Eric Cantor had promised at a “Tea Party” on November 5 that no Republican would vote for the health care bill. It turned out differently. There was one dissenting voice: Anh “Joseph” Cao from Louisiana voted for the bill.

The Vietnamese-born Republican who came to the U.S. at the age of eight is a freshman who won a special election in December 2008 in a 60% black and 60% Democratic district against an incumbent Democrat who had been found guilty in August 2008 of 11 out of 16 criminal counts including bribery, money laundering and racketeering. Rep. William J. Jefferson had also hidden $90,000 in cash in his freezer.

On November 8, before the health care vote, Anh “Joseph” Cao, a former Catholic seminarian and ethics teacher, had supported a successfully passed health care amendment from Democratic Rep. Bart Stupak prohibiting federal money from funding abortion. For the Catholic Cao, the adoption of this important amendment was good enough an improvement of the health care bill for him to vote for it.

Cao posted the following statement on his website: “My vote tonight was based on my priority of ding what is best for my constituents.” In fact, Cao represents a largely poor district with plenty of people who would profit from the new bill.

With or without the yes by Cao, the bill would have past the House, despite the 39 Democrats who refused to support the Affordable Health Care for America Act. Is Cao's vote the end of the rise of his young star or on the contrary enhances his voter attractiveness?



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The health care overhaul as another nail in the budget coffin

The famous “Stimulus Bill” so far has mostly stimulated and satisfied the Democrats appetite for their pet projects, but not the economy. As presidential candidate and as president, Barack Obama has repeatedly stressed that job creation was his priority. On November 6, the Bureau of Labor Statistics released the official unemployment figures for October 2009: 10.2%. In October 2008, the rate was only 6.5% [2008 number corrected on November 8, 2009 at 16:30 German time]. In October 2009, the underemployment rate - including part-time worker looking for full-time jobs as well as those who have stopped looking for a job - has even reached 17.5%. Mission not accomplished, Mister President! Anyway, it is not up to the president to create jobs. He just has to set the general framework (Rahmenbedingungen).

However, Fannie Mae and Freddie Mac as well as Citigroup and Bank of America have not been broken up into smaller entities. They remain too big to fail and are still losing money. In Iraq and Afghanistan, the United States are still losing both, soldiers and money. Bold action is required. More soldiers and money in the short term in order to turn it definitively around within one to two years, requiring substantially less subsequently. What America got in the first year of the Obama presidency was definitely not “change you can believe in”.

Now Congress is about to add another financial liability to the neck of (mainly future) American taxpayers, the health care reform. Let's hope that together with the Senate, the House of Representatives will rethink its health care overhaul and make it better and less expensive thanks to a real health care market including doctors, hospitals, drug and insurance companies competing for customers. State intervention and subsidies are not the solution. Skip the public option, but make health care universal without repeating Europe's mistakes.

President Obama visited his Democratic House lawmakers before the vote and told them according to Teddy Davis of ABC News: “Do any of you expect the Republicans not to go after you if you vote against this bill?” He forgot to mention that the problem are not the fellow Republican lawmakers, but the voters the Democrats will have to face one day. The bill in its present version does not tackle the problem of soaring health care costs. It is one additional nail in the U.S. budget coffin. Obama may have won a Pyrrhic victory. The President, the Senate and the House still have time to fix it.

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