A Speech, Not a Plan

Posted by Grace-Marie Turner in Health Care on Sep 11th, 2009 | no responses

President Obama's speech Wednesday night soared with oratory but fell flat in delivering on his promise to present details or any substantive new policy initiatives for his health reform plan.

He may get a few days of lift from the passion and cheers in the House chambers, but the hard realities of policy will continue to chill prospects for getting sweeping reform legislation enacted. A few examples:

Paying for reform. The president said "the plan I'm proposing will cost around $900 billion over 10 years" and that "we've estimated that most of this plan can be paid for by finding savings within the existing health care system, a system that is currently full of waste and abuse."

He dropped talk of higher taxes on the rich to pay for the reform plan, perhaps after realizing that much of the burden would fall on small businesses. So that means that, apart from some new taxes on health insurance (which will just be passed along to consumers), the massive coverage expansions will be paid for by curtailing Medicare and Medicaid waste and abuse and making them more efficient.

That doesn't pass the laugh test. I testified before the House Energy and Commerce Committee in 2008 about seven rules that the Bush administration had written to curtail documented fraud and abuse in the Medicaid program. The fraud was documented by the Government Accountability Office and the Inspector General at the Department of Health and Human Services — things such as using Medicaid money to take people shopping for party dresses and to Bingo games.

But Congress has done everything it can to stop implementation of the Bush rules to stop documented fraud. What do you think the chances are that they will be able to pay for their $900 billion reform plan mostly with savings from Medicare and Medicaid?

Rising health costs. Gone is the campaign promise that every family will save $2,500 a year on health costs when the Obama plan is implemented. It has been replaced with new language that says reform "will slow the growth of health care costs for our families, our businesses, and our government."

Slowing the growth of health costs is a much different agenda. But even with that, he offered little or nothing of substance to explain how he would achieve that goal.

Keeping the coverage you have now. The president has changed his rhetoric about no one losing the coverage or doctors they have now. Now he says "nothing in this plan will require you or your employer to change the coverage or the doctor you have." The operable word is "require."

But the employer mandate is still in place, and the president still wants the new public plan. So there would be every incentive for employers to drop coverage, pay the new tax, and send their employees packing to the public plan, many involuntarily. The Lewin Group says between 88 million and 120 million Americans would find themselves in the new government-run health program. But they wouldn't be required to join.

Do you find that reassuring?

So what we heard last was a campaign speech which was, by the way, alarming in his threats to those who oppose him.

Promises made are not promises kept. Michael Tanner of Cato has a good new paper out that details the very difficult challenges of getting from promise to policy.