Same Old Obamacare

The Baucus bill is the same old misguided Democratic health care plan.

by Yuval Levin

After a summer of setbacks on health care reform, Democrats on Capitol Hill again seem to think they have found a formula for success. The latest iteration of Obamacare, emerging this week from the Senate Finance Committee, is said to be a move to the center, avoiding the albatross of a government insurance option and costing "only" $900 billion.

But the bill, shepherded through a series of narrow party-line committee votes by chairman Max Baucus, is far from a compromise measure. It is a massively ambitious, costly, intrusive, inefficient, and clumsy combination of mandates, taxes, subsidies, regulations, and new government programs intended over time to replace the American health insurance industry with an enormous new government entitlement. And it fails to address what even President Obama has said is the core of our health care dilemma: rising costs. Indeed, there is every reason to believe that the Baucus bill would actually increase the cost of health insurance premiums.

By requiring insurers to cover all comers on the same terms and that the healthy and the sick pay the same amount for their coverage, the bill would raise costs for many of those who are now insured. The requirement that all Americans buy insurance approved by the government or pay a hefty fine, moreover, would create new captive customers for coverage and constrain the range of options available to them--a recipe for higher prices. It would also shift some costs from older to younger people, encouraging (and in many cases requiring) everyone to buy more comprehensive policies than they might otherwise want and eliminating many of the low-cost catastrophic care plans popular with younger Americans. Insurance will be more expensive, which in turn will depress wages since the cost of insurance will continue to come out of many Americans' take-home pay.

The bill would also create a new tax on hiring in the form of the employer coverage mandate, and this and the variety of other new taxes and penalties on insurers, drug makers, and health care providers would be passed right along to consumers. It would also make a mockery of President Obama's pledge not to raise middle class taxes...

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