“The American Public Is Not Behind This Bill”

Posted March 2nd, 2010 at 9:15am in Health
Care<http://blog.heritage.org/category/health-care/>
After more than a year of $862 billion dollar deficit
stimulus<http://www.washingtontimes.com/news/2010/jan/27/stimulus-price-tag-soars-as-jobless-rate-rises/>bills,
national-debt-doubling
federal budgets <http://www.heritage.org/Research/Budget/wm2787.cfm>, and
government takeovers of the auto industry, it is difficult to remember that
President Barack Obama actually ran as a moderate in many ways. On his way
to a 53% – 46% win
<http://www.cnn.com/ELECTION/2008/results/president/>over Sen. John
McCain (R-AZ), then-Sen. Obama promised to “cut
taxes for 95% of workers and their
families<http://taxprof.typepad.com/taxprof_blog/2008/10/wsj-obamas-tax.html>,”
expand the Army by 65,000 and the Marines by
27,000<http://www.mcclatchydc.com/homepage/story/54605.html>,
and enact “a net spending
cut<http://elections.nytimes.com/2008/president/debates/transcripts/third-presidential-debate.html>”
for the federal government. Obama promised lower taxes, a strong defense and
shrinking the size of government. No wonder independents in nine states that
went for President George Bush in 2000 and 2004 switched their vote to Obama
in 2008 (CO, FL, IN, IA, NV, NM, NC, OH and VA). But now those independents
are beginning to reassess. Public Policy
Polling<http://publicpolicypolling.blogspot.com/>(a liberal polling
firm)
notes <http://publicpolicypolling.blogspot.com/2010/03/obamas-drop.html>that
Obama now has a negative approval rating in every state that he
flipped
from the Bush column to his in 2008.

And now President Obama has lost one of his biggest and earliest supporters
on his signature issue: health care. Yesterday, when pressed on CNBC if he
would be in favor of scrapping the Senate health care bill, Warren Buffett
responded: “I would be.” Specifically, Buffett believes that the Senate bill
will not contain health care costs: “We have a health system that, in terms
of cost, is really out of control, and if you take this line and you project
what has been happening into the future, we will get less and less
competitive. So, we need something else. Unfortunately, we came up with a
bill that really doesn’t attack the cost situation that much and we have to
have a fundamental change.” Buffett is correct on both fronts: 1) the
President’s own Centers for Medicare and Medicaid Services (CMS) has
reported that the Senate health care bill would raise national health
expenditures $234 billion by
2019<http://enzi.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=85899a92-a646-4bca-87b6-81ae629e753>;
and 2) our current system is completely unable to control exploding health
care costs.

So why is our current system completely unable to control costs? For the
same reason most Americans over-eat at buffets: when you don’t have to pay
for each plate of food, you usually eat more. In recent decades, the
percentage of health care spending paid “out of pocket” by patients has
fallen substantially, from 52% in 1965 to only 15% in
2005<http://www.heritage.org/Research/HealthCare/bg2369.cfm>.
Instead of patients paying for the care they receive, our system is built
around a third-party payment system where the government and insurance
companies are the ones who actually pay for individual medical expenses. When
prices are determined through administrative procedures rather than market
processes, both patients and producers are anesthetized from normal market
incentives to reduce prices and
spending<http://www.heritage.org/Research/HealthCare/bg2369.cfm>.
That is why our health care costs are rising so rapidly.

And every major pillar of Obamacare makes the third-party-payer problem
worse: mandates that limit out-of-pocket spending by patients, mandates that
extend the minimum benefits insurance must cover, a massive expansion of
Medicaid, and lower limits on the tax deductibility of out-of-pocket
spending. And the one measure that the left once pointed to as its key
cost-reducing measure – the taxing of expensive health insurance plans – has
been gutted and pushed back until 2018,
<http://www.politico.com/news/stories/0210/33468.html>when any honest
observer knows it will never be implemented. Commenting on the state of
health care reform, Buffet told
CNBC<http://www.politico.com/news/stories/0310/33693.html>yesterday:

If it was a choice today between plan A, which is what we’ve got, or plan B,
what is in front of — the Senate bill, I would vote for the Senate bill. But
I would much rather see a plan C that really attacks costs. And I think
that’s what the American public wants to see. I mean, the American public is
not behind this bill. And we need the American public behind the bill,
because it’s going to have to do some tough things.

The current system is unsustainable. We do need heath care reform. But not
reform that is opposed by the vast majority of the American people and makes
the core problem of the current system worse. The President should follow
Buffett’s advice, scrap the current bill and start
over<http://www.heritage.org/Research/HealthCare/bg2377.cfm>
.

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