Surreal Spending
The House is poised to take a final vote on the compromise $800-billion spending bill on, appropriately, Friday the 13th, with the Senate likely to follow soon after.
In my 36 years in Washington, I have never seen such a surreal environment, with hundreds of billions of dollars in borrowed taxpayer money being spent without committee hearings or even meaningful public debate over the thousands of new and expanded programs the bill funds.
The bill pumps $150 billion more into our already-bloated health sector, with the biggest sums going to Medicaid ($87 billion), health information technology ($20 billion), and COBRA subsidies ($25 billion).
The $25 billion will pay 65% of the premiums for workers who have lost or left their jobs so they can keep their former employer’s health insurance for nine months. This creates a new health spending program without the slightest debate over the economic distortions it would cause. And hold your breath if you think the subsidies really will end after nine months.
This imposes a back-door mandate for employers to continue providing health insurance to workers long after they have left. Extending it just may crack the already fragile ability of employers to continue offering health coverage. The marginal companies may drop insurance altogether rather than be faced with paying health bills for workers who have left their employ and who no longer are contributing anything to the company’s output.
But that’s not all: The bill takes a giant leap into centralization over decisions about health care. It provides $1.1 billion for “comparative effectiveness” research and creates a new 15-member federal health board, composed entirely of federal employees appointed by the president, charged with running the research program to assess which drugs and other medical treatments are most effective.
While the Senate insisted that the board’s decisions would be based on “clinical” and not “cost” decisions, it quickly will be charged with deciding which medical treatments the federal government will or will not pay for, as has happened in other countries where these boards exist today.
House Appropriations Chairman David Obey (D., Wis.) explained earlier that drugs and treatments “that are found to be less effective and in some cases, more expensive, will no longer be prescribed.” The treatments some patients desperately need might not be on the list. And this will soon be law, without any debate in Congress.
And Sen. Daschle may be gone, but not the $400 million slush fund for the secretary of Health and Human Services “to accelerate the development and dissemination of research assessing the comparative effectiveness of health care treatments and strategies.”
The one flicker of good news is that negotiators deleted a new program that would have provided 100% federal funding to expand access to Medicaid for the unemployed, with no income or asset tests.
This was one of the most egregious provisions in the House bill and would have thrown the door wide open to fraud.
States are primarily responsible for fighting fraud in their Medicaid programs. Yet if the federal government is reimbursing them 100 percent for adding new populations to the program, what incentive would they have had to make sure the money was being spent wisely?
Congressional Quarterly said the provision was “derided by critics as permitting outgoing Bush cabinet members to sign up for the low-income health insurance program.” That did it.
There’s much more, which you can read about here. In all, this bill takes us down a path toward greater centralized control over our health sector. In the process, we will lose the dynamic creativity of the marketplace that can respond to the needs and demands of consumers, replacing it with the slow, rigid, unresponsive, rule-driven processes of bureaucracy.
This is not change I can believe in.
Grace-Marie Turner