Debunking Health Care Reform Critics

There is an anti-Health Care Reform email circulating that claims to “read the bill” and points to specific problems. The email is taken from this post by Gary North.

North writes – “Here are some of the bad highlights. After you read them, you will begin to see what you will be facing if this bill passes.” The highlights were selected by Larry Schweikart.

Good! This is excellent. Now we can have a debate. Someone has actually gone through the bill and pointed out what’s wrong with it. I decided to follow up on their claims and this is what I’ve found. Their criticisms are at best quibbles, and at worst non-existent. There is a tremendous depth of conspiracy theory and false accusation.

Nor is there a cogent, principled criticism. They criticize elements of the bill that work to make it fiscally responsible, that work to create an even playing-field between private insurers and the government, and portions that have been endorsed by conservative think tanks like the Heritage Foundation.

So far I’ve only addressed 11 of their 30 points, but you get the idea.

Here’s what I have so far. The passages by North and Schweikart are bolded. The bill can be found here.

Pg 22 of the HC Bill mandates the Government will audit books of all employers that self insure.

Page 22 is part of section 113 – SEC. 113. INSURANCE RATING RULES. The section on page 22 calls for a study, not an audit. One element of the study is to learn – “The risk of self-insured employers not being able to pay obligations or otherwise be coming financially insolvent.”

This is not a call for a mandatory lifelong investigation into your business. This is saying – What do we do if a company self-insures, but then can’t pay because they’re insolvent?

Pg 30 Sec 123 of HC bill — a Government committee (good luck with that!) will decide what treatments/benefits a person may receive.

SEC. 123. HEALTH BENEFITS ADVISORY COMMITTEE.

This is correct, but it’s not clear why this is a problem.

This is an advisory committee that will deal with issues like the end-of-life counseling payment. Assume that coverage for living will consultation is removed from the final bill. It is the Health Benefits Advisory Committee’s responsibility to revisit this issue later, with input from the public, to decide if it should be covered or not. Similarly, when do experimental treatments become established enough to be used in insurance?

This committee is a way to make sure the program stays fiscally responsible while providing the best health care. It’s unclear to me why opponents find this sort of review board problematic.

The bill suggests that this committee be modeled on the Medicare Payment Advisory Commission (aka MedPAC). So, if there’s a problem with MedPAC then this might be a reasonable criticism. Remember, MedPAC was created as part of the 1997 omnibus Balanced Budget Act that helped balance the budget. This act was passed with a Republican majority. Only 12 Republican Senators voted against MedPAC. Grassley voted for it.

Pg 29 lines 4-16 in the HC bill — YOUR HEALTHCARE WILL BE RATIONED!

page 29 is a part of SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED. Pg. 29 lines 4-16 read -

(A) ANNUAL LIMITATION.—The cost-sharing incurred under the essential benefits package with respect to an individual (or family) for a year does not exceed the applicable level specified in subparagraph (B).

(B) APPLICABLE LEVEL.—The applicable level specified in this subparagraph for Y1 is $5,000 for an individual and $10,000 for a family. Such levels shall be increased (rounded to the nearest $100) for each subsequent year by the annual percentage increase in the Consumer Price Index (United States city average) applicable to such year.

This section is about co-payments and deductibles. There is no cost-sharing for preventive services. People and families who can afford it are expected to cover part of the cost of their own health care, though an earlier passage in this section clearly states that this section “does not impose any annual or lifetime limit on the coverage of covered health care items and services.”

Again, this is an attempt to be fiscally responsible. Rather than relying on the government for everything, those who can afford deductibles will be expected to pay them.

Pg 42 of HC Bill — The Health Choices Commissioner will choose your HC Benefits for you.

This section of the bill explains the responsibility of the Health Choices Commissioner. Again, it’s not clear what the criticism is here. All government programs have someone in charge. The Postmaster General doesn’t tell you what to write or who to send mail to. They make sure the Post Office is running correctly, that fraud is investigated, and that criticisms are addressed and changes are made when necessary (or argues that they are not necessary). This is the responsibility of the Commissioner. The post is appointed by the president with advice and consent of the Congress. Like most top-level bureaucrats they will work with several committees drawn from each party to shape internal policy. They do not have autonomous power pick and choose (or deny) individual benefits.

PG 50 Section 152 in HC bill — HC will be provided to ALL non US citizens, illegal or otherwise.

Not quite.

“all health care and related services (including insurance coverage and public health activities) covered by this Act shall be provided without regard to personal characteristics extraneous to the provision of high quality health care or related services.”

This means that just because someone is brown or doesn’t speak the language they can’t be denied. This means that there is no mandatory ID check at hospitals and doctor’s offices. What to do with illegal aliens is specifically spelled out in section 246 – SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED ALIENS.

Pg 58 HC Bill — Government will have real-time access to individual’s finances and a National ID Healthcard will be issued!

This is from SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE TRANSACTIONS, and here is the offending passage -

“‘‘(D) enable the real-time (or near real-time) determination of an individual’s financial responsibility at the point of service and, to the extent possible, prior to service, including whether the individual is eligible for a specific service with a specific physician at a specific facility, which may include utilization of a machine-readable health plan beneficiary identification card;”

This is another part of the bill striving for fiscal responsibility by creating a state-of-the-art database to maintain health records.

I think privacy, government-run databases, and mandatory health cards are reasonable concerns, but the solution is one line that clarifies that health cards are not mandatory, and that everyone has the option to opt-out of the government-maintained health database. This is not a bill-killer and reasonable people can have reasonable disagreements about how much information the government should be allowed to have.

This section is also an effort to reduce fraud. People that can pay should pay. People should not be allowed to lie about their ability to pay and free-ride on the system.

Pg 59 HC Bill lines 21-24 — Government will have direct access to your bank accts for election funds transfer.

“‘‘(C) enable electronic funds transfers, in order to allow automated reconciliation with the related health care payment and remittance advice;”

This is wildly inaccurate and deep in the thickets of conspiracy theory. This passage means you can pay with your debit card. In that sense, everyone you ever use your debit card with has direct access to your bank account. It’s not clear what an “election funds transfer” might be. Presumably Democrats are so dim-witted that they want pass a bill that will legally allow Republicans (once they return to power) to funnel billions of dollars into re-electing Republicans. Ummm, no. There is nothing in this bill about “election funds transfer.”

PG 65 Sec 164 is a payoff subsidized plan for retirees and their families in Unions & community organizations (read: ACORN).

SEC. 164. REINSURANCE PROGRAM FOR RETIREES.

It’s hard to locate the offending section here. Needless to say there is no mention of unions or community organizers. Nor is it clear exactly which lines spark this particular conspiracy theory.

This element of the bill is to help small business cover the cost of retired ex-employees. While people who are union members or participate in community organizations might benefit from this section, so will people who are not union members or members of community organizations. It’s hard for small business to keep paying for health care insurance for employees who are no longer working. This passage helps alleviate some of that financial stress.

Pg 72 Lines 8-14 Government will create an HC Exchange to bring private HC plans under Government control.

This is a portion that is supported by the conservative think tank Heritage Foundation. In 2006 Robert E. Moffit, writing for the Heritage Foundation, had this to say about health care exchanges -

“The best way to enable individuals and families to buy, own, and keep health insurance from job to job—without losing the tax advantages of the employment-based coverage—is to transform the balkanized and dysfunctional state health insurance market into a single health insurance market. This new market would function well for all sorts of individuals and small businesses, not just workers employed by large companies.”

and

“The best option is a health insurance market exchange. A properly designed health insurance exchange would function as a single market for all kinds of health insurance plans, including traditional insurance plans, health maintenance organizations, health savings accounts, and other new coverage options that might emerge in response to consumer demand.”

Rather than bringing everything under government control, this part of the bill works to establish a free market in health care insurance. This passage works to create an even playing field between private insurers and the government-run insurance.

This also allows people to switch from one private insurer to another. Know how sometimes you only have a small window of time to choose your insurer, and your choices are limited? This would end that. You’d be able to switch when it’s convenient to you, and to an insurer you prefer. HOWEVER, participating in the exchange is not mandatory, so the insurer you want may not participate, and so they you couldn’t switch to them whenever you wanted.

PG 91 Lines 4-7 HC Bill — Government mandates linguistic appropriate services. Example — Translation for illegal aliens.

You don’t even have to look this one up to debunk it. It is not a law that citizens of the US speak English. Translation services make government resources available to all citizens, regardless of which language they speak. Section 246 clearly spells out how government-funded health care is to be treated for illegal aliens – NO FEDERAL PAYMENT FOR UNDOCUMENTED ALIENS.

Pg 95 HC Bill Lines 8-18 — The Government will use groups, i.e. ACORN & Americorps, to sign up individuals for Government HC plan.

“(1) OUTREACH.—The Commissioner shall conduct outreach activities consistent with subsection (c), including through use of appropriate entities as described in paragraph (4) of such subsection, to in form and educate individuals and employers about the Health Insurance Exchange and Exchange-participating health benefits plan options. Such outreach shall include outreach specific to vulnerable populations, such as children, individuals with disabilities, individuals with mental illness, and individuals with other cognitive impairments.”

Here is subsection C

“ENROLLMENT INFORMATION.—The Commissioner shall provide for the broad dissemination of information to prospective enrollees on the enrollment process, including before each open enrollment period. In carrying out the previous sentence, the Commissioner may work with other appropriate entities to facilitate such provision of information.”

Obviously, there is no mention of ACORN or AmeriCorps. (AmeriCorps is a government agency, btw, which ACORN is not. It would be perfectly appropriate to use AmeriCorps to spread the information about the Health Insurance Exchange program.)

Health Insurance Exchange does not have to be from a private insurer to a government insurer. Health Insurance Exchange also covers private-to-private insurance switches. This section of the bill is to educate people that if they are not satisfied with their provider they are free to switch to another provider. The hurdles for switching insurers now are tremendous. This bill greatly reduces the hurdles in choosing and switching insurers.

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Perhaps I’ll cover some of the other points after lunch.

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Here are the next nine points -

PG 85 Line 7 HC Bill — Specifics of Benefit Levels for Plans. AARP members — your Health care WILL be rationed.

(c) SPECIFICATION OF BENEFIT LEVELS FOR PLANS.—

Yes. In the same way that health care is rationed today by private insurers. Some policies cover dental and some do not. Some cover vision and some do not. That is the type of rationing addressed here.

This is part of SEC. 203. BENEFITS PACKAGE LEVELS. This part of the bill clarifies the distinctions between basic, enhanced, and premium plans. This is so that when you switch insurers and move from a basic plan to a basic plan, all the same stuff is covered. Remember, this also covers switching from private insurer to private insurer. This is to make sure that unscrupulous insurers don’t offer basic plans that only cover half of other basic plans.

PG 102 Lines 12-18 HC Bill — Medicaid Eligible Individuals will be automatically enrolled in Medicaid. No choice.

I think this could be clarified to include an opt-out option. But, this is here so that people who forget, or who don’t know how, or don’t realize they need to, can still be covered by Medicaid. The alternative is to turn away people because they didn’t fill out the appropriate paperwork. This is an effort to reduce bureaucracy and paperwork.

A quibble, but not a bill-breaker. Reasonable negotiation could resolve this in about fifteen seconds.

pg 124 lines 24-25 HC — No company can sue Government on price fixing. No “judicial review” against Government Monopoly.

“(f) LIMITATIONS ON REVIEW.—There shall be no administrative or judicial review of a payment rate or methodology established under this section or under section
2 224.”

This is from SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES which states -

“The Secretary shall establish payment rates for the public health insurance option for services and health care providers consistent with this section and may change such payment rates in accordance with section 224.”

Finally! A somewhat reasonable criticism. If the Secretary is going to be able to autonomously set rates there should probably be some way to review his or her judgment. All this needs is one line determining who the reviewing body should be, or how it should be appointed if necessary.

pg 127 Lines 1-16 HC Bill — Doctors/ AMA — The Government will tell YOU what you can earn.

“(1) PHYSICIANS.—The Secretary shall provide for the annual participation of physicians under the public health insurance option, for which payment may be made for services furnished during the year, in one of 2 classes.”

The government will tell physicians what they can earn in the same way they tell every government contractor what they can earn. If you make a deal with the government to shred paper, you don’t get to set an arbitrary price after agreeing to the work. You have a contract and you adhere to that contract. The contract tells you what you can earn.

Physicians do not have to participate in the public health plan. Physicians are free to charge any price they want. This is exactly the way insurance works today. You may tell the insurance company you want your surgery done by the best in the world, but they’re not going to pay for it. Also, they can’t make the best in the world work for whatever pittance they want to offer.

Again, this is an effort to be fiscally responsible and avoid unscrupulous gaming of the system.

Pg 145 Line 15-17 — An Employer MUST auto enroll employees into public option plan. NO CHOICE.

“(4) AUTOENROLLMENT OF EMPLOYEES.—The employer provides for autoenrollment of the employee in accordance with subsection (c).”

Here is subsection (c)

“(c) AUTOMATIC ENROLLMENT FOR EMPLOYER SPONSORED HEALTH BENEFITS.—
(1) IN GENERAL.—The requirement of this subsection with respect to an employer and an employee is that the employer automatically enroll suchs employee into the employment-based health benefits plan for individual coverage under the plan option with the lowest applicable employee premium.”

First. There is a choice. The employee has the option to opt-out. The employer must provide an opportunity to enroll in an insurance plan. This means that when you start working, and it’s your first week on the job, and for whatever reason you haven’t enrolled in an insurance program yet, you will still be covered.

This section of the bill is only a problem if you’re an employer who offers no insurance to your employees. If you can’t offer insurance because your company is too small, or too poor, the government health plan will help you cover your employees. If you don’t offer insurance options because you just don’t want to, this section might be a problem.

Pg 126 Lines 22-25 — Employers MUST pay for HC for part time employees AND their families.

The citation here is wrong. Page 126 covers which health insurance providers can participate in the public health insurance option. There’s nothing here about employers.

Maybe they mean pg. 146? Fair enough. We all occasionally make typos.

For part-time employees – “(3) MINIMUM EMPLOYER CONTRIBUTION FOR EMPLOYEES OTHER THAN FULL-TIME EMPLOYEES.” Employers have to pay in proportion to the amount of time worked. So, if you’re a half-time employee, the employer will pay half of what they’d pay for a full-time employee.

There are some businesses that only pay insurance for full-time employees, so this is a section of the bill that increases health-care coverage. Most insurance policies already have the option to cover the family, so that aspect is no different.

The logic behind this is that the creation of a free market for health insurers will help drive down the costs. So, while insurance costs may increase for some employers from having to cover part-time employees they didn’t before, that should be off-set by the free market competition that will be created between insurance providers.

However, not wanting to add an unwarranted burden on small business, exceptions have been included in SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COVERAGE in section (b) SPECIAL RULES FOR SMALL EMPLOYERS.

Does not exceed $250,000 ………………………………. 0 percent
Exceeds $250,000, but does not exceed $300,000 2 percent
Exceeds $300,000, but does not exceed $350,000 4 percent
Exceeds $350,000, but does not exceed $400,000 6 percent

Pg 170 Lines 1-3 HC Bill — Any NONRESIDENT Alien is exempt from individual taxes. (Americans will pay.)

First, a nonresident alien is different than an undocumented alien. Nonresidents are guests who are visiting or here on business. They declare themselves and wages they earn are taxed.

Remember, this bill deals specifically with illegal aliens – SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED ALIENS.

“‘‘(2) NONRESIDENT ALIENS.—Subsection (a) shall not apply to any individual who is a non resident alien.”

Subsection (a) reads -

‘‘(a) TAX IMPOSED.—In the case of any individual who does not meet the requirements of subsection (d) at any time during the taxable year, there is hereby imposed a tax equal to 2.5 percent of the excess of—

‘‘(1) the taxpayer’s modified adjusted gross income for the taxable year, over

‘‘(2) the amount of gross income specified in section 6012(a)(1) with respect to the taxpayer.

Subsection (d) is

“‘‘(d) ACCEPTABLE COVERAGE REQUIREMENT.—
‘‘(1) IN GENERAL.—The requirements of this subsection are met with respect to any individual for any period if such individual (and each qualifying child of such individual) is covered by acceptable coverage at all times during such period.

So, what this means is that we will also treat guests we have invited to this country. Wages earned by these guests are taxed. Yes, there may be some who are nonresident aliens and who are not earning wages in the US, but the number is trivial.

Pg 195 HC Bill — officers & employees of HC Admin (the GOVERNMENT) will have access to ALL Americans’ finances and personal records.

“‘‘(21) DISCLOSURE OF RETURN INFORMATION TO CARRY OUT HEALTH INSURANCE EXCHANGE SUBSIDIES.—”

Hmmm, this might actually be a legitimate concern. It seems like a loophole to access private information about tax returns.

The reasoning behind this portion is to reduce free-riders, and to reduce fraud. Having to subpoena every single record would create a bureaucratic nightmare. On the other hand, allowing a bunch of mid-level bureaucrats access to everyone’s tax returns seems like a bad idea.

I think it is fair to say that this section could use some work.

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So, in the final point I’m going to cover, I found a real substantive criticism. This bill would be a lot better if opponents were addressing the serious flaws in this bill, and less time simply making stuff up.

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UPDATE – You can find another round of debunking here.