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  • What the House Would Have to Swallow in the Senate Bill

    Speaker Pelosi

    Amidst all the intense speculation about quickly passing the President’s health care agenda through the Budget Reconciliation process before the Easter Recess, ordinary Americans should remember one thing: the House of Representatives must first pass the 2,700-page, $2.5 trillion, Senate health bill. So, the next big step in the national health care debate is floor action in the House of Representatives, where House Speaker Nancy Pelosi must round up at least 216 votes.

    Heritage analysts have conducted some extensive research and analysis of the provisions of the giant Senate bill. If the House passes the Senate bill and it goes to the President’s desk for signature, it then would become the law of the land. For all intents and purposes, the legislative debate would then be over.

    Regardless of Administration or Senate leadership promises to “fix” the new law (the Senate bill) through the Budget Reconciliation process, there are no guarantees. Any “fixes”—if they did come about—would have to survive another round of Senate floor action. So it is worth recalling what the Senate bill would mean for Americans were it to become law.

    • Failure to address the drivers behind rising spending in health care. The Senate bill attempts to control costs by imposing heavy new federal regulations and punitive taxes on high-ticket medical expenditures such as medical devices, prescription drugs, and high-cost insurance plans. This top-down approach focuses on the symptoms, rather than the causes, of increasing health spending. Health insurance premiums, particularly in the individual market, will go up.
    • An individual mandate with disastrous unintended consequences. To expand coverage, the bill includes guaranteed issue of coverage combined with an individual mandate. However, rather than encourage “young invincibles” to carry insurance, the mandate, which would be less expensive than insurance coverage, would create incentives for young and healthy adults to pay the penalty rather than buy and carry a costly health plan. This would destabilize the insurance market by reducing the spread of risk, leaving the elderly and sickly in insurance risk pools. Premiums would thus skyrocket—further discouraging healthy individuals from obtaining care.
    • Stringent federal requirement push private insurers towards insolvency. The combination of an excise tax on high-cost insurance plans, a federally-defined minimum medical-loss ratio, and federally-defined required benefits could push private insurers to going out of business, should they be incapable of meeting all three requirements and simultaneously covering the cost of enrollees’ care. Alternatively, it could mean that health insurers, “too big to fail”, would become the next big industry recipients of taxpayer bailouts.
    • A public option in disguise. The Senate bill requires the Office of Personnel Management to establish and manage health plans in the state exchanges to compete against private health plans. The bill expands the powers of this federal agency. This could lead to a de facto public option with federally defined premiums, benefits, etc: private insurance in name only. Of course, if the government sponsored health plans do not effectively compete against the other plans, it is likely that they will also be eligible for future federal bailouts at the taxpayers’ expense.
    • Government subsidies which penalize marriage. The structure of the subsidies offered by the Senate bill to purchase insurance are inequitable, offering more financial assistance to non-married couples than to a married couple with comparable income. This is bizarre social policy.
    • Trillions in new federal spending, questionable savings. Congressional liberals claim that their health care proposals are deficit neutral. In fact, they are based on budgetary gimmicks and hidden costs. When these are accounted for, the real cost of the Senate bill skyrockets, further augmented by the implausibility of the many promised savings in the bill.
    • A special Medicaid deal for Nebraska. The Senate bill would force all federal taxpayers to cover the extra cost of expanding Medicaid in Nebraska. It is worthy to note that the President’s proposal would extend the taxpayer subsidies to all states, increasing the total cost of the bill.
    • Expanding Medicaid on the states’ budgets. Though the federal government would initially cover most of the cost of expanding Medicaid, states would eventually have to pick up a portion of the cost. This comes at a time when states are cutting spending in Medicaid and other areas to accrue savings and avoid increasing debt. In fact, we show that states could save significantly if they were to drop their Medicaid programs altogether, which could become an appealing option after adoption of the Senate bill.
    • Encourages employment discrimination. The structure of the bill’s employer mandate would discourage employers from hiring workers from low-income families and from offering insurance to all employees if a large portion of a firm’s workforce consists of low-income workers.
    • Disparate federal assistance for families of comparable income. The generous subsidies available to purchase insurance in the exchanges would be available to only a select few of the millions that fall within the eligible income bracket. This would result in thousands of dollars in additional federal assistance for some individuals and little to no assistance for others, regardless of equal income.
    • Taxing families’ health benefits. An excise tax on high-cost insurance plans is included in the Senate bill with the intention of lowering premiums. However, this tax on insurers would be passed down to the consumer, further raising premiums.
    • Numerous new taxes—and not just for the wealthy. President Obama has promised not to introduce new taxes that would affect the middle-class, but the Senate bill would impose several new punitive taxes on to Americans of every financial background.

    These policies are all embodied in the Senate health bill. For further analysis of the Senate bill, click here. Congress should take a different route and start over to do health care reform right.

    Posted in Obamacare [slideshow_deploy]

    25 Responses to What the House Would Have to Swallow in the Senate Bill

    1. Kevin Habib, Glen Bu says:

      I'm with you AC – we've been sitting by letter the insurance industry abuse Americans for extreme profit for far too long. We can't just keep punting this down the road. Thank goodness we finally have a Congress and President willign to make these politically difficult decisions. I'm glad the President's plan incorporates so mnay ideas supported by Republicans in the past.

      I can only hope this gets passed in the coming weeks. If reform dies this year, will be another decade before the poltical will is there to try it again…and I fear it will be too late. Premiums have been increasing as much as 50% annually, hundreds of thousands of Americans will lose their healthcare and insurers will keep raking in the profits while kicking off those with pre-existing conditions and charging the elderly and women more than others.

      I just wish there was a way to allow the government to compete with these private insurers, but the Dems bent over too much and got rid of the public options.

    2. Brad, Chicago says:

      @AC – So, you like the idea of the federal government picking up a new reason to tax us and you don't care about the thousands (millions?) of people who work in those insurance companies that would lose their jobs when the companies go out of business? The government would be picking up a new program that costs lots of money when they are already running a consistent budget deficit and the reason they give for believing it is going to be budget neutral is that they will cut waste in their current programs. The President, himself, claimed to understand (in the State of the Union address) that the people of this country don't trust the government, but he expects us to trust that they'll make these changes that they haven't been able to make, yet. Don't confuse your disdain for greedy CEOs with the your feelings about the low-level people (agents, clerical staff, and even custodial staff in those big offices).

      The most ridiculous thing about this bill is the exhortation that we have to pass it as soon as possible, that we can't keep uninsured people waiting, when the benefits won't start for 4 years. It would be great for the administration if unemployment stays where it is for a little while longer, so they can keep pointing to the people who don't have insurance, because they lost their jobs (but will regain it when they get a new job), as another example of the problems with the current system and as a reason it must be "fixed" now. If the government would spend a little time working on the economy, instead of this health reform issue, some of us might trust them to handle it.

    3. Mary Bradshaw, San A says:

      Everyone knows the Heritage Foundation is a conservative organization. Where is the balance??

    4. AC, LA says:

      Two points, in particular, grab my attention:
      1) Stringent federal requirement push private insurers towards insolvency;
      2) A public option in disguise.

      Anything that will drive the parasitic corporate health ‘insurers’ out of business is a good thing, and can’t happen soon enough. A legitimate public option is another good thing.

      After reading your analysis of the Senate bill, I now grasp that is it substantially better than I had thought – and will now push for its passage.

    5. Billie says:

      Cosmetic surgery can't hide one thing, true ugliness.

      The government majority, especially the president, sees what this will do, yet they keep insisting. They're dangerous and no one should fall for this! EVER!

      Insurance is a business that provides a privilege. Always was. As this fits the role of personal responsibility, You pay in and hopefully never need the coverage If something may happen, you have the insurance. To mandate to individuals destroys the freedom of choice, if you have a family you should feel obligated to provide for your family as much as you can. Rich or poor, your family is your responsibility. Rich or poor, your responsibility. Don't take anything for free from government. Not health care or the privilege of health care insurance paid by the tax payers. Whoever gets anything for free (government subsidies) should be put to shame. STAND UP FOR YOUR FREEDOM!

      The government failed to oversee the problems of the insurance companies that would have avoided the government's accusations against insurance companies today. This was set-up from the beginning.

      People without cell phones, nice cars or cabins, do without to provide for their family. Many that have all these things and more, get government subsidies, even demand nutritional lunches for free, at least 5 days a week, as parents don't have to be accountable to provide for, eventually, any day of the week. It's heartbreaking where all this is going. And I mean ALL OF IT.

    6. stirling, Pennsylvan says:

      "If the House passes the Senate bill and it goes to the President’s desk for signature, it then would become the law of the land. For all intents and purposes, the legislative debate would then be over."

      This is all that this administration wants at this point, don't belive that any changes will follow. This has always been the administrations goal to put the "structure" in place first, then build upon it. What they "build" upon it is not going to be any more paletable then the current bill. The Media will never highlight the substance of the bill, only the need for it. Sorry Washington the "dog food" is still "dog food" we dont want it.

    7. Jim, New York says:

      Mary, if you want the Progressive view you can go almost any newspaper or TV news broadcast. Most of us come to the Heritage Foundation to balance that reporting.

    8. Brandon Gunnip, Arli says:

      Name one thing the federal government runs well and I'll eat my hat. The NSA? TSA? The Postal Service? Fannie/Freddie? The Census Bureau? The VA? No? Well how about Medicare? Which, incidentally is the largest denier of health care claims in the US – almost 7% of all Medicare claims are denied when private industry standards hover around 3-4%. I just think it's hysterical that Stupak and his pro-life coalition will be the ones to put the coffin nail in Obamacare. November 2 will be an historic bloodbath for the democrat party, after which they won't get so much as a sniff of a bicameral majority for a generation or more. Obama/Pelosi/Reed have shown their true colors and the American electorate will not stand for this brazen usurpation of the greatest healthcare system in the [free] world.

    9. D E Huber, Willis TX says:

      I am surprised anyone would wan the insurance industry to be closed down. It is a known fact that during the great depression, the insurance companies helped bail out the country, not the banks. I understand there is a profit made by this business, but what is wrong with that? If income to the health insurance is less than the claims paid, there will be an increase in premiums. Should you have a claim, a big one, I would pray there is enough money in the insurance company fund to pay it. As for the pre-existing clause being removed from insurance underwriting seems preposterous to me. It is like totaling my car, with no insurance, and the next day trying to get it insured and paid for. In the case of pre-existing conditions, premiums will sky rocket.

    10. Normca says:

      This is an Rx for disaster if it should be signed into law. I will guess that the great one himself has not taken the time to even read the Senate bill. Obama never really has his own plan, the goal for them is not to improve the health insurance system; it is like so may here have said – its control over our lives. The proposal, as discussed here does not meet one of the stated goals, outlined last year and as reviewed here; it raises costs and discourages young people from pursuing the profession. It certainly will not encourage competition that is needed. Smoke and mirrors – Obama, the democrat party and the media – Axis of Evil.

    11. Jeanne Stotler,Woodb says:

      This Health Care IS NOT FREE, for all those that think, FREE lunches, housing,food,unearned tax credit and health care are a right, SOMEONE has to pay for it and it's not the Gov't. It's the middle class working man/woman that sees taxes taken out of their checks EVERY payday. These people who go to work everyday also pay for their own and their families health Ins, they pay their own rent or motgage, buy their own food and if lucky might be able to take their family to Disney or some other vacation. The reason we conservatives are MAD and opposing this health care, WE ARE SICK AND TIRED OF PAYING FOR WHAT YOU WANT WHILE YOU SIT HOME AND Take, never giving. We believe Ins. cos. need to overhaul their cost and take a long look on how the money rec'd. is spent but we do not feel it's our obligation to support you.

    12. LyndaShrugged2 says:

      Yes the heritage foundation is a voice of reason up against the rhetoric being pushed by main street media. And the fact is, the heritage foundation does not have to report any side of an issue but the one they want. It's a private foundation. That's called free press. It's constitutionally protected. AND no where in that constitution does it say both sides of an issue has to be presented. Look at the main street media…ABC…NBC…if you want another view, find another site.

    13. Drew Page, IL says:

      To Kevin and A.C. — Ii is apparent that the two of you know nothing about the insurance industry. You live in a fantasy world where the insurance industry is an evil, greedy institution. A study of all remaining health insurance companies was published recently showing that the average profit margin for these companies was 2.2%, but that won't matter to you. You apparently believe that the insurance industry owes you something.

      You have no idea of the purpose of health insurance; of the state and federal laws and regulations to which it is subject; the elements that make up the cost, nor do you wish to know. It is just easier to criticize, so that's what you do.

      Why is it that you have no criticism for the doctors, hospitals and pharmaceutical companies? After all they are the ones that send the bills to the evil insurance companies for payment. Where are your criticisms of state and federal government regulations which have consistently required health insurance plans to expand coverage and eligibility? Each of these expansions result in more claim dollars being paid out. Insurance companies aren't the ones who kick people out of hosspitals, the hospitals themselves do that. Insurance companies are not the ones who refuse to treat you for an illness, or perform surgery, it's the doctors who do that. It's not the insurance companies who refuse to provide you that expensive medicine you need, it's the drug stores that do that. Insurance companies do not provide medical care, hospitals, doctors and pharmacies do. The function of the insurance company is to provide reimbursement of medical care bills that fall under the terms of the policies that are purchased. Not all health care expenses are covered under health insurance companies, just like all auto repair bills are covered under your auto insurance.

      If you really believe you are being taken advantage of by insurance companies, I have two words of advice for you — self insure. Save all those premium dollars with their obscene profit margins in them and put them in the bank. Use those savings to pay you doctor and hospital bills.

    14. Teri Newman says:

      We all know that the Obama administration is trying to ram government health care down our throats and is planning to use the rate increases applied for by Blue Cross/Anthem in California to justify their position that government control is needed. This is untrue for several reasons, but the rate increase asked for in California is largely due to having to shift the cost of health care for illegal immigrants to people who DO have insurance.

      Very few people have an understanding of how insurance companies work. Theoretically there are “uninsured” people in the USA, but in actuality, everyone’s health care is paid for or the hospitals would have to close their doors! The very poor have Medicaid which is the government health insurance and the illegal aliens use it by having an anchor baby who is a US citizen at birth. The baby is then used to qualify for welfare benefits and Medicaid and it is automatically granted to underage US citizens. The illegal aliens along with those who choose not to buy health insurance are covered by what is known as “cost shifting”.

      Cost shifting is the process by which hospital bill the insurance of covered people for the cost of their care AND THE CARE OF THE UNINSURED. Do you really think that two aspirin cost the hospital $30 to provide? Of course not!! The $30 pays for the aspirin and the care of the uninsured. The hospitals shift the cost of the care of the uninsured onto the bills of those of us who DO have insurance—if they didn’t do this, they would have to close their doors since they are legally required to provide care for any sick person or emergency. NO ONE in America is denied health care because of inability to pay because they either have Medicaid, health insurance or the cost of the care is shifted to the insured. It’s been going on forever and worst of all, the illegal aliens know that they cannot be denied care in an EMERGENCY ROOM so they use ERs as their primary physician which is horrendously expensive. Hospitals routinely deny that they are shifting the cost to the insured people, but they are. Just from a business standpoint, they MUST in order to remain open and provide care—and Medicaid is also billed through cost shifting.

      To bring down costs, we need to change the incentives that govern spending:

      * Right now, $5 out of every $6 of health-care spending is paid for by someone other than the person receiving care — insurance companies, employers, or the government.

      * Individuals are insulated from the reality of what their decisions cost.

      * This breeds overutilization of low-value health care and runaway spending.

      To reduce the growth of costs, individuals must take greater responsibility for their health care, and health insurers and health care providers must face the competitive forces of the market. Three policy changes will go a long way to achieving these objectives:

      * Eliminate the tax code's bias that favors health insurance over out-of-pocket spending.

      * Remove state-government barriers to purchasing and providing health services.

      * Reform medical malpractice laws.

      I intend to drop a bill in the hopper immediately after being sworn in that will repeal Obama-care if it should manage to become law before the election. It will be my very first act as the 12th Illinois Representative and then I will work towards a sensible set of insurance reforms.

    15. Tim Az says:

      The deadline has been set for passage of the bill. There just isn't enough time for reconciliation it will go directly to Mao-Bama for signing. You say they would never do that it's not legal procedure to skip reconciliation. Why wouldn't these pinkos do it? No one has offered punitive consequences to any of the illegal actions these evil beings have engaged in to date.They enjoy total immunity because they occupy all the agencies of govt who are responsible for holding them accountable. With one exception we the people. This unholy alliance is betting that they will achieve their means how ever necessary. They are also betting that when we the people take back our govt. we won't have the intestinal fortitude to repeal all of their dirty deeds. I believe these socialists are in for a rude awakening. They will once again cower in the darkest recesses of our country waiting for opportunity to knock once again. It will be a long wait for them.

    16. ann, MA says:

      I have come to think that what ever Pres. Obama says – the OPPOSITE is closer to the truth.

    17. Pingback: The Senate Health Bill « The Lee Brothers Blog

    18. Ben C. Ann Arbor, MI says:

      For those who posted their support for Obama's health care package the following is why I have no faith in Congress. The changes from the original intent have your personal liability at $350K. Is your check in the mail?

      Our Social Security

      Franklin Roosevelt, a Democrat, introduced the Social

      Security (FICA) Program. He promised:

      1.) That participation in the Program would be

      Completely voluntary, Now no longer Voluntary.

      2.) That the participants would only have to pay

      1% of the first $1,400 of their annual

      Incomes into the Program,

      Now 7.65% on the first $90,000 (and your employers matches another 7.65%)

      3.) That the money the participants elected to put

      into the Program would be deductible from

      their income for tax purposes each year,

      No longer tax deductible.

      4.) That the money the participants put into the independent 'Trust Fund' rather than into the general operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and, Under Johnson the money was moved to The General Fund and spent.

      5.) That the annuity payments to the retirees would never be taxed as income.

      6.) Under Clinton & Gore Up to 85% of your Social Security can be Taxed.

      Since many of us have paid into FICA for years and are now receiving a Social

      Security check every month — and then finding that we are getting taxed on 85% of the money we paid to the Federal government to 'put away' — you may be interested in the following:

      Q: Which Political Party took Social Security from the

      independent 'Trust Fund' and put it into the

      general fund so that Congress could spend it?

      A: It was Lyndon Johnson and the democratically

      controlled House and Senate.

      Q: Which Political Party eliminated the income tax

      deduction for Social Security (FICA) withholding?

      A: The Democratic Party.

      Q: Which Political Party started taxing Social Security annuities?

      A: The Democratic Party, with Al Gore casting the

      'tie-breaking' deciding vote as President of the

      Senate, while he was Vice President of the US.

      Q: Which Political Party decided to start

      giving annuity payments to immigrants?

      A: That's right! Jimmy Carter and the Democratic Party.

      Immigrants moved into this country, and at age 65,

      began to receive Social Security payments! The

      Democratic Party gave these payments to them,

      even though they never paid a dime into it!

      Then, after violating the original contract (FICA), the Democrats turn

      around and tell you that the Republicans want to take your Social Security


      And the worst part about it is uninformed citizens believe it!

      If enough people receive this, maybe a seed of awareness will be planted and maybe changes will evolve. Maybe not, some Democrats are awfully sure of what isn't so. But it's worth a try. How many people can YOU send this to? Actions speak louder than bumper stickers – AND CONGRESS GIVES THEMSELVES 100% RETIREMENT




      A government big enough to give you everything you want, is strong enough to take everything you have.

      -Thomas Jefferson

    19. Dave - Chelsea, MI says:

      AC, LA – spoken like a true Progressive or Socialist.

    20. Glenn Richardson, He says:

      If I were to start a business providing a service or a product with the concept that my customers would have to pay me up front with the promise that I would deliver my product 3 or 4 years later I would be laughed out of town.

      By the way, why the rush to pass a law that won't be implilmented until a few years later? Obama and the Democrates in Congress aren't interested in providing insurance for everyone. Their real motivation is to "control" our lives. Think about any legislation be it guns, health care, interstate commerce, etc. The opperative word is "CONTROL".

    21. Pingback: Health Care Bill - Kagen & Obey Undecided?

    22. Jackson, Denton, TX says:

      I got into this lively discussion a bit late so I will just echo some of the comments: Spot On Jim, the liberal media is out of control but conservatives do not propose to shut them down for their views.

      Excellent and accurate piece of writing Ben, you have provided the answer to the rhetorical question "what would LBJ do?" posed by AARP magazine this month. They go on to explain how he saved our bacon with medicare/medicaid policies – say what?. The truth is, every administration since is culpable in raping and pilaging SS for general fund expenditures including wars, against the intent of the SS system – and THAT is why it is broke. AARP is NOT looking out for seniors, unless you want to buy some of the crap they are pushing in their ads…

    23. BILL AND VICTORIA RO says:


    24. BILL AND VICTORIA RO says:

      Leave our health care alone or join up for it yourself because thats all you deserve just like us.

    25. Teresa TN says:

      `I've heard over and over again that the insurance companies profit is actually very low. (2.9 percent) As I understand it, if you have a pool of people enrolled and alot of them get very sick, they are paying out. How do you make a huge profit? My husband had great coverage with his company for years. at the time, his company employed 400 + people. I remember one year that three, yes three people came down with cancer in the company. Because of those 3 people, the rates went up. These were catastrophic illnesses. Insurance companies do not make profits on premiums! They make their money on investments. They are in the business to COVER YOU if you get sick! How the hell are you making HUGE profits if this is what you do? He worked for a company that insured semi-truck owners. They could never make a profit on premiums! Have you seen what happens when a Truck hits a car? Well, we have first hand knowledge!! Usually means pay outs of hundreds of thousands of dollars! Just for one accident!

      This president is out there doing his best to tear up these companies and turn the American people against this industry so he has a scapgoat. How much easier is it to get his crap bill passed! Yes, we need to fix the problem, but NOT by government take over, not by a 2700 page bill and not by spending trillions of dollars! This is the most unconstitutional legislation I've seen in a long time!

      By the way, is anyone aware that his take over of Student Loans legislation will be tacked on to the back end of this bill! Check it out! Someone needs to tell me when this guy is going to stop "taking over the private sector".

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