Baucus Plan: Fantasy & Broken Promises

The Baucus health care plan is expensive, it breaks Obama's tax pledge, it is based on insane assumptions and it leaves tens of millions uninsured. Putting those considerations aside, it's a fantastic plan.

A Trillion Dollar Plan

Democrats are ecstatic. The CBO (after having been subjected to presidential arm-twisting) has declared that the $829 billion Baucus plan is essentially deficit neutral, with the potential to reduce the deficit by $8 billion per year (peanuts). Would that it were so. But even if it were true, let's not forget that $1 trillion is massive amount of wealth...this is a very expensive scheme.

Yes, New Taxes

The Baucus plan will be paid for with massive new taxes, including $201 billion in new taxes on insurance plans, and taxes on the uninsured (a cruel breach of another Obama pledge). The Baucus plan also calls for new taxes on a whole array of medically related goods and services including hip, knee, and ankle prosthetics, mammograms, dentures, breast pumps and contact lenses. These new taxes will hit the middle class like a heart attack. Please recall Obama's emphatic and oft repeated promise:

"I can make a firm pledge. Under my plan, no family making less than $250,000 per year, will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."

Here's a question for your Senators and Congressperson: "Do you intend to send Obama a health care bill that will lead him to break his promises?"

False Assumptions, Laughable Claims
In order to create the illusion of deficit neutrality and cost effectiveness, the Baucus plan makes assumptions that the CBO has described as insane (in more tactful terms). Here are some of the more egregious abuses of reality:

• Most of the plan's funding is supposed to be coming from $404 billion in cuts to Medicare and other government insurance programs. Democrats say they will reduce waste but they won't hurt recipients' benefits. [Can we can trust a government that created $404 billion in waste to find and eliminate said waste? What have they been waiting for? An alternate reality, perhaps?]

• Doctor-reimbursement rates supposedly would be cut by 25%. [Not happening. Doctors would retire, opt out, or go bankrupt.]

• The plan creates a rosy fiscal illusion by immediately hitting Americans with higher taxes, but delaying benefits for at least 2½ years. [This makes the plan look more cost effective than it actually is.]

• The CBO has understated the major impact of a weakened individual mandate:

Amendments approved during the Senate Finance Committee mark-up eviscerated the individual mandate – completely eliminating it in 2013, significantly lowering penalties to the point that it will only represent about 15 percent of the cost of a premium by 2017. Further, many individuals would be exempt from the penalties altogether. This is likely to result in millions of people foregoing coverage.

A weak mandate, as included in the amended Senate Finance Committee bill, would encourage people to wait until they are sick to purchase coverage. This will drive up premiums for everyone.

On close inspection, the Baucus plan looks less like the best of all possible worlds, and more like the biggest of all possible lies.

Tens of Millions Uninsured
So we go bankrupt...at least we will get health insurance coverage for the overwhelming majority of the uninsured, right?

Wrong. Only about half of the uninsured will be covered. In 2019, 25 million would still be uninsured.

Via: Memeorandum, ABC, WSJ

Discussion: LCR