Obama Undercuts Dems On Health Care

As health insurance reform legislation inches closer to final passage, Democrats in Congress are struggling to make health care affordable to millions of Americans. But the White House has constantly undercut their efforts by making backroom deals with industry insiders and sabotaging some of their most effective cost-saving tools.

All of the bills currently up for debate in Congress provide some level of financial assistance for those in the lower income brackets who can not afford to purchase health insurance. Members of Congress have been attempting to keep these subsidies as high as possible to drive down costs for consumers. Failure to do so could cost them dearly at the polls in the upcoming 2010 Congressional elections.

But the White House, in an effort to score a political win and pass a health care bill quickly, has consistently made compromises that complicate the mandate before Congressional Democrats, who must provide affordable care to their constituents. Over the summer, the president made a now-infamous deal with the drug companies that would effectively thwart any attempt made by Congress to insert a provision allowing the federal government to use its purchasing power to negotiate better drug prices for seniors on Medicare. Nancy Pelosi, Speaker of the House, was relying on savings from such a provision to pay for higher subsidies. 

Another controversial but cost-saving provision that Democrats in the House were planning to employ was the government funded public insurance option. The Congressional Budget Office, the group responsible for measuring the cost of proposed health care plans, has said that a public option that pays doctors based on Medicare rates could save $110 billion over 10 years. However, President Obama has been pushing for a weaker version of the public plan called a “trigger” that would only come into effect if private, for-profit insurers failed to control costs. While this approach is more politically feasible in the eyes of the White House, it increases the cost of the bill and therefore reduces the amount of money that can be spent on subsidies, further increasing costs to consumers.

Because the Obama Administration arbitrarily decided on a health care bill cost ceiling of $900 billion over 10 years, any cost-saving measure not included in the final bill indirectly results in higher costs for consumers in the form of lower subsidies.

For example, the bill approved by the Senate Finance Committee does not include any form of the public option and does not allow the government to directly negotiate drug prices. Therefore, it provides the lowest subsidies of any bill. Politico provides a great breakdown of the real-world numbers. 

A family of three making $46,000 a year — about 250 percent of the poverty line — would have to pay $4,349, or 9.5 percent of their income, under the Finance Committee bill to purchase insurance. That’s a fifth more than the House bill, yet the policy purchased would require the beneficiary to cover 30 percent of average coverage costs — twice the 15 percent requirement in the House bill.

The center estimates that the premium costs could absorb 55 percent of the family’s disposable income after paying fixed costs like rent, utilities, car payments, groceries and gasoline. The risk is that many will drop out or lawmakers will weaken the mandate that everyone get insurance.

This kind of plan could spell disaster for members of Congress up for re-election in 2010. What’s more, it would effectively prove one of the Republican Party’s most damaging talking points — that health care reform under the Democrats would amount to a huge tax increase on the middle class.