Even though no one can expect benefits under the proposed health care reform bill until 2013, cuts to Medicare and tax increases will take effect immediately, the AP reports.
By counting 10 years of Medicare cuts and tax increasing and only 7 years before and subsidies and benefits kick in, the cost looks lower than it really is.
Even more expensive will be health care premiums that individuals and families already pay -about $1700 a year to the cost of family coverage in 2013 said a study released today by Pricewaterhousecoopers.
At the heart of the argument is whether the Finance Committee bill does enough to draw young, healthy people into the insurance risk pool. By postponing and reducing penalties on people who do not sign up for health insurance, industry analysts predict it would attract less-healthy patients who would drive up costs.
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"Market reform enacted in the absence of universal coverage will increase costs dramatically for many who are currently insured by creating a powerful incentive for people to wait until they are sick to purchase coverage," the authors of the report wrote
Because the study was commissioned by the industry group America's Health Insurance Plans, and despite the obvious fact that all corporate audits are performed by outside independent auditors such as Pricewaterhousecoopers, the White House attacked the auditing firm and not the specifics of the report.
"Those guys specialize in tax shelters," said Nancy-Ann DeParle, director of the White House Office of Health Reform. "Clearly this is not their area of expertise."
From Powerline
I want to focus on just one feature of the Baucus plan that the PWC report addresses: the "weak mandate" to buy insurance, coupled with a strong requirement on the insurance industry that it insure everyone, regardless of pre-existing conditions or state of health. This combination will devastate the individual insurance market:
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PWC is stating the issue politely, to say the least. What is meant by a "weak mandate" is that, in the current version of the Baucus bill, there is no requirement to buy health insurance at all until after 2013, and by 2017 the penalty for failing to buy health insurance still amounts to only about 15% of the cost of the insurance. Now, think about it: if you know that you don't have to buy health insurance when you are young and healthy, but if you should get sick, or just get older, you can apply for health insurance at any time and it will be illegal for the insurance company to turn you down, what would you do? Obviously, you would defer buying insurance unless and until you get sick. This means that the pool of those who are insured will be lower quality, and the cost therefore higher for everyone who buys insurance. It is as though you could wait until you die, and then your heirs can buy life insurance on you.
This isn't reform, it is stupidity.
It actually would be very easy to make health insurance cheaper. All we have to do is allow insurance companies to compete nationally instead of state-by-state and eliminate all mandates that limit consumer choice. It has been estimated that these simple reforms--which are not part of any of the Democrats' "reform" bills, for obvious reasons--would reduce health care costs by one-quarter to one-third. Instead of such common-sense reforms, the Dems are proposing Rube Goldberg measures that will make health care more expensive. Instead of eliminating mandates, their measures, including the Baucus bill, increase them--in effect making cheaper health insurance illegal