Published August 23, 2011
President Obama says he wants a grand bargain on the budget with no ideological “lines in the sand.”
Yet he insists that the costliest and most controversial program in decades—the Patient Protection and Affordable Care Act (Obamacare)—be taken off the table. That won’t fly. Congress should unwind the health law in three quick steps: freeze, investigate and replace.
Freeze: Even as evidence mounts that the law will damage American health care, the economy and the budget, the Obama administration is furiously issuing rules to ready the law’s government-centric architecture.
The administration has requested millions to market the law’s long-term care program that even Health and Human Services Secretary Kathleen Sebelius concedes does not work. Congress must put an immediate end to this by freezing implementation pending a thorough study of the law’s actual consequences.
Investigate: The health law was passed in such a partisan frenzy that its actual effect was never adequately assessed. Congress should investigate the law in four areas: access to care for seniors; reduction in employer-sponsored insurance; impediments to job creation; and cost to taxpayers.
Some answers are evident. Medicare’s chief actuary has warned that the law will jeopardize access to care for the elderly; cuts by Medicare will force 15 percent of providers to close their doors to elderly patients.
Medicare eventually will pay less for services than Medicaid even though many of Medicaid’s participants already can’t get the care they need because few doctors will see them.
The law compounds this problem by requiring the unelected Independent Payment Advisory Board to impose further cuts. The result will be rationing of care under Medicare.
McKinsey & Co. had the courage to tell the truth when it found, through a survey, that up to 30 percent of employers are likely to dump their employees onto the state exchanges that will be created by the law.
Former Congressional Budget Office Director Douglas Holtz-Eakin believes that, largely because of this employer dumping, the official $1 trillion, 10-year price tag is half what it really will cost.
Worse, a Heritage Foundation report says Obamacare is already a cause of anemic job creation. More facts like these need to be evaluated to help make rational choices.
Replace: Congress will soon be asked to cut the deficit by $1.2 trillion over a decade. It can’t meet that objective without reform of Medicare and Medicaid. It can make a good start by repealing the entitlement expansions in the health law and replacing them with far less costly programs that address the real problems in American health care.
The contours of such alternatives are clear. They must cover pre-existing conditions without an individual mandate and eliminate gaps left by previous attempts to improve the portability of health coverage.
People without good employer-provided plans, including the uninsured, should get help paying for their insurance. Large and medium-size employer plans should be left in place, with new incentives to help reduce their costs.
Federal requirements should be minimal, and states should retain their role as regulators of health insurance.
Most important, any replacement must make it easier for consumers to seek high-quality, low-cost health care without the law’s hopeless bureaucracy.
Honest observers can no longer deny the problems with Obamacare. Congress should freeze it before more damage is done and pass legislation to improve health care with less spending.
James C. Capretta is a fellow at the Ethics and Public Policy Center. He was an associate director at the Office of Management and Budget from 2001 to 2004. James Wootton is chairman of Partnership for America, a nonpartisan group seeking alternatives to the health law.