Democrat health bill signed, sealed and delivering surprises, part 3

Pt. 3 of 3

Taxes and Center for Comparative Effectiveness place big question marks on healthcare bill’s cost and policy impact.

On Wednesday, Rep. Mike Pence (R-Ind.) commented on healthcare legislation passed by Democrats: "This fight is not over."As Democrats promise benefits to Main Street, some elements of their healthcare bill promise nasty surprises for those expecting more quality care for less money. What the bill arguably delivers in questionable promises of premium decreases by President Barack Obama, it may take back in taxes through the back door Democrats are so fond of.

Political analyst and Pulitzer Prize winning columnist Charles Krauthammer pegged one outcome—he predicted a national sales tax during an interview with Fox News’ Bill O’Reilly on Tuesday. The Washington Post reported the Obama administration was looking at a value-added tax (VAT) in May, 2009. National media said the idea came from a book written by the brother of the White House Chief of Staff, Ezekiel Emanuel who allegedly endorsed the idea in a book he wrote about guaranteed healthcare.

A VAT tax would not replace the income tax or any of the other numerous taxes the feds levy on everything from gas to cell phones—such a tax would be in addition to existing taxes.

The Washington Times also has an excellent analysis of the healthcare legislation's tax impact.

New trust fund will pay for ‘Comparative Effectiveness Research’
There’s a quirky section in HR 4872, the so-called ‘Reconciliation Bill,’ that appears to give the secretary of Health and Human Services the responsibility for coming up with what the feds call a “fair share” tax.

Section 9511 mandates the creation of a ‘Health Care Comparative Effectiveness Research Trust Fund’ (CERTF)  in the US Treasury Dept.

Appropriations totaling $90 million are directed into the fund for 2010. Where would the money come from? The bill pulls funds from the Federal Hospital Insurance Trust Fund, the Federal Supplementary Medical Insurance Trust Fund and the Medicare Prescription Drug Account.

How will the so-called Fair Share be assessed? The bill gives that power to the HHS secretary. The HHS secretary can spend without a formal appropriations process. In other words, the HHS secretary can decide what will or will not be spent without the approval of Congress.

The bill delivers unprecedented power over healthcare policy and procedure to an executive level bureaucrat who is not voted for but appointed.

Taking care of patients—feds will hold physicians’ hands on treatment
The CERTF stems from the establishment by the HHS secretary of a Center for Comparative Effectiveness. This is one of the provisions in the bill that directly injects the federal government into the practice of healthcare. The Center will “conduct, support and synthesize research…with respect to the outcomes, effectiveness and appropriateness of health care services and procedures in order to identify the manner in which diseases, disorders and other health conditions can most effectively and appropriately be prevented, diagnosed, treated and managed clinically.” It covers the “full spectrum of health care items, services and systems, including pharmaceuticals, medical devices, medical and surgical procedures and other medical interventions…”

The spirit of the CCE is of course preventive care. The grim reality is politicization of healthcare policy that can be easily influenced by lobbyists with skin in the healthcare game. Thus Washington will determine allowable treatments that govern a physician’s decisions about patient care. Theoretically if a patient chooses an alternative, he will pay out of pocket. In essence, the federal government will hold the doctor’s hand as he treats you.

Questionable cost savings for Main Street as insurance industry sees 'boomlet'
It is no coincidence that health-related stocks rose the day after the president signed the Obamacare bill. The insurance industry will have a temporary field day—a ‘boomlet’—as millions of captive purchasers are delivered because of the Obamacare mandate that insurance is a requirement for an American to stay legal.

Much has been made of potential cost-savings resulting from the healthcare bill. And it appears Democrats have been more generous than usual, declaring in a summary posted at the House website, “All families between 133 percent and 400 percent of poverty would have lower health care costs (total of premiums and cost-sharing) than under the Senate Bill..." [before reconciliation].  Thus, a family of 2 earning $58,280 is guaranteed lower premiums possibly via federal subsidies.

Taxes on the upper middle class
To help pay for the healthcare bill, Democrats want to tax upper middle class taxpayers, and though proponents of the bill say the hikes will only affect the upper middle class income earners, a close look at the figures suggests otherwise. The Tax Foundation created a chart showing increases in the Medicare tax for a married taxpayer earning $180,000 in wages and $40,000 in investment income, leading some conservatives to believe the bill paints a target on small business owners.

At the moment the administration is touting insurance coverage regardless of existing conditions and no lifetime cap on what insurance will pay for treatments.

What Main Street must realize is that this benefit will not come cheaply and it will certainly be paid for by not only millionaires, but by the upper middle class and small business owners in particular.

Having spent days poring over HR 3200, HR 3590 and HR 4872, I’ve come to realize the legislation passed by the House was a purely political move. The legislation is haphazard, sloppily written and full of loopholes. To understand a section in one bill requires combing through another bill for interpretation.

Most in Congress had not read the bill they finally passed, relying on a charismatic president’s salesmanship and a desperate Party’s political positioning to tender one sixth of the American economy into the hands of a federal government that continues to demonstrate lack of fiscal accountability at every turn.

Read Pt. 1

Read Pt. 2