LBJ: We were attacked (in the Gulf of Tonkin)!

Nixon: I am not a crook!

Clinton: I did not have sex with that woman… Miss Lewinski!

Bush – 41: Read my lips – No new taxes!

Obama:

I will have the most transparent administration in history.

TARP is to fund shovel-ready jobs.

I am focused like a laser on creating jobs.

The IRS is not targeting anyone.

It was a spontaneous riot about a movie.

If I had a son.

I will put an end to the type of politics that “breeds division, conflict and cynicism”.

You didn’t build that!

I will restore trust in Government.

The Cambridge cops acted stupidly.

The public will have 5 days to look at every bill that land on my desk

It’s not my red line – it is the world’s red line.

Whistle blowers will be protected in my administration.

We got back every dime we used to rescue the banks and auto companies, with interest.

I am not spying on American citizens.

Obama-Care will be good for America

You can keep your family doctor.

Premiums will be lowered by $2500.

If you like it, you can keep your current healthcare plan

It’s just like shopping at Amazon

I knew nothing about “Fast and Furious” gunrunning to Mexican drug cartels

I knew nothing about IRS targeting conservative groups

I knew nothing about what happened in Benghazi

And the biggest one of all:

“I, Barrack Hussein Obama, pledge to preserve, protect and defend the Constitution of the United States of America

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The $940 billion health-care overhaul will take nearly a decade to roll out in full. What’s in it for you?

2010

Coverage

* Subsidies begin for small businesses to provide coverage to employees.
* Insurance companies barred from denying coverage to children with pre-existing illness.
* Children permitted to stay on their parents’ insurance policies until their 26th birthday.

2011

Coverage

* Set up long-term care program under which people pay premiums into system for at least five years and become eligible for support payments if they need assistance in daily living.

Taxes and fees

* Drug makers face annual fee of $2.5 billion (rises in subsequent years).

2013

Taxes and fees

* New Medicare taxes on individuals earning more than $200,000 a year and couples filing jointly earning more than $250,000 a year.
* Tax on wages rises to 2.35% from 1.45%.
* New 3.8% tax on unearned income such as dividends and interest.
* Excise tax of 2.3% imposed on sale of medical devices.

Cost control

* Medicare pilot program begins to test bundled payments for care, in a bid to pay for quality rather than quantity of services.

2014

Coverage

* Create exchanges where people without employer coverage, as well as small businesses, can shop for health coverage. Insurance companies barred from denying coverage to anyone with pre-existing illness.
* Requirement begins for most people to have health insurance. Subsidies begin for lower and middle-income people. People at 133% of federal poverty level pay maximum of 3% of income for coverage. People at 400% of poverty level pay up to 9.5% of income. (Poverty level currently is about $22,000 for a family of four.)
* Medicaid, the federal-state program for the poor, expands to all Americans with income up to 133% of federal poverty level.
* Subsidies for small businesses to provide coverage increase. Businesses with 10 or fewer employees and average annual wages of less than $25,000 receive tax credit of up to 50% of employer’s contribution. Tax credits phase out for larger businesses.

Taxes and fees

* Employers with more than 50 employees that don’t provide affordable coverage must pay a fine if employees receive tax credits to buy insurance. Fine is up to $3,000 per employee, excluding first 30 employees.
* Insurance industry must pay annual fee of $8 billion (rises in subsequent years).

Cost control

* Independent Medicare board must begin to submit recommendations to curb Medicare spending, if costs are rising faster than inflation.

2016

Taxes and fees

* Penalty for those who don’t carry coverage rises to 2.5% of taxable income or $695, whichever is greater.

2017

Coverage

* Businesses with more than 100 employees can buy coverage on insurance exchanges, if state permits it.

2018

Taxes and fees

* Excise tax of 40% imposed on health plans valued at more than $10,200 for individual coverage and $27,500 for family coverage.

—Sources: House bill; Kaiser Family Foundation

Correction:
The House health legislation imposes a 2.3% excise tax on the sale of medical devices. An earlier version of this article incorrectly said the tax was 2.9%, the figure before a last-minute change to the legislation.

An argument frequently used by health care reform supporters is that since we have to buy car insurance, the requirement should also extend to buying health insurance. Those against this health care reform bill would retort with “yea, but you don’t have to buy the car” but it didn’t explain the legal footing for it.

I read a rather lengthy piece written by Sen. Orrin Hatch (R-Utah). Hatch points out that federal government can regulate commerce, but cannot force people to participate in commerce. The car insurance is a regulated aspect of the voluntary purchase of a car. Likewise, we cannot be forced to purchase health insurance and we cannot be fined for not participating in it.

Here’s how Hatch explained it.

The Congressional Budget Office examined the 1994 healthcare reform legislation, which also included a mandate to purchase health insurance. Here is the CBO’s conclusion: “A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy a particular good or service….Federal mandates typically apply to people as parties to economic transactions, rather than members of society.”

In other words, Congress can regulate commercial activities in which people choose to engage, but cannot require that they engage in those commercial activities.

Hatch continues,

If there is no difference between regulating and requiring what people do, if there is no difference between incentives and mandates, if Congress may require that individuals purchase a particular good or service, why did we bother with the Cash for Clunkers program? Why did we bother with the TARP or other bailouts? We could simply require that Americans buy certain cars or appliances, invest in certain companies, or deposit their paychecks in certain banks. For that matter, we could attack the obesity problem by requiring Americans to buy fruits and vegetables.

Some say that because state governments may require drivers to buy car insurance, the federal government may require that everyone purchase health insurance. Simply stating that point should be enough to refute it. States may do many things the federal government may not, and if you do not drive a car, you do not have to buy car insurance. This legislation would require individuals to have health insurance simply because they exist, even if they never see a doctor for the rest of their lives.

The defenders of this health insurance mandate must know they are on shaky constitutional ground. The bill before us now includes findings which attempt to connect the mandate to the Constitution. I assume that they are the best arguments that this unprecedented and novel mandate is constitutional.

Hatch continues shooting holes in Reid’s bill by pointing to the unconstitutional aspects of “excise tax on high cost employer-sponsored insurance plans differently in some states than in others. ”

The Constitution allows Congress to impose excise taxes, but requires that they be “uniform throughout the United States.” This is one of those provisions that will be dismissed with pejorative labels such as archaic by those who find it annoying. But it is right there in the same Constitution that we have all sworn that same oath to protect and defend and we are just as bound to obey it. And frankly, a good test of our commitment to the Constitution is when we must obey a provision that limits what we want to do.

As if the above constitutional nails were not enough to seal the coffin on Reid’s health care bill, Hatch moves on to the subject of states rights with regard to the limitation of federal powers upon individual states.

Others have observed that the legislation requires states to establish health benefit exchanges. It does not ask, cajole, encourage, or even bribe them. It simply orders state legislatures to pass legislation creating these health benefit exchanges and says that if states do not do so, the Secretary of Health and Human Services will establish the exchanges for them.

But as the Supreme Court said in FERC v. Mississippi in 1982, “this Court never has sanctioned explicitly a federal command to the States to promulgate and enforce laws and regulations.” The Supreme Court reaffirmed a decade later in New York v. United States that “The Framers explicitly chose a Constitution that confers upon Congress the power to regulate individuals, not States.” In that case, the Court struck down federal legislation that would press state officials into administering a federal program.

And more recently, in Printz v. United States, the Supreme Court stated: “We have held, however, that state legislatures are not subject to federal direction.” And yet, this legislation does what these cases said Congress may not do. It commands states to pass laws, it regulates states in their capacity as states, and it attempts to make states subject to federal direction.

In its present form, it would appear Harry Reid’s health care bill (actually, it’s an insurance reform bill) is dead on arrival.

Orrin Hatch spoke the above on the Senate floor December 11, 2009.

You can watch Orrin Hatch speak on the issue, followed by Randy Barnett,
Carmack Waterhouse Professor of Legal Theory, Georgetown University Law Center, who also speaks on the unconstitutional aspects of the health care bill.

The Congressional Budget Office released a study about how Harry Reid’s Senate bill will affect insurance costs and found that premiums in the individual market will rise by 10% to 13% more than if Congress did nothing. If left alone, family policies are projected to cost $13,100 on average. Under ObamaCare it will jump to $15,200.

Playing along with Reid and his ilk, the New York Times told its readers there is “No Big Cost Rise in U.S. Premiums Is Seen in Study” and the Washington Post tried to prop it up by saying, “Senate Health Bill Gets a Boost”. Obama’s White House put their unique spin on it by stating the CBO report was “more good news about what reform will mean for families struggling to keep up with skyrocketing premiums under the broken status quo.”

From the Senate floor Finance Chairman Max Baucus said,

“Health-care reform is fundamentally about lowering health-care costs. Lowering costs is what health-care reform is designed to do, lowering costs; and it will achieve this objective.”

Well, Not Quite

What Baucus and the White House left out some very important points about the report. What they don’t want you to know is that the CBO says it expects employer-sponsored insurance costs to remain roughly as they are now. Costs will not be going down. Not only that, the whole purpose of Reid’s reform bill was to fix the individual market which is expensive and unstable due mostly to the fact it does not receive favorable tax treatment which are given to job-based coverage.

The CBO’s report is confirming that new coverage mandates actually drive premiums higher. Democrats are claiming that these higher insurance prices will be offset by new government subsidies. How do they do that? Government subsidies come from you and me through taxes, that’s how.

About 57% of the people who buy insurance through the bill’s new “exchanges” that will supplant today’s individual market will qualify for subsidies that cover about two-thirds of the total premium, whose cost will be offset by subsidies.

For you thinkers out there, yes, you got it, the bill will increase costs but it will then disguise those costs by transferring them to taxpayers from individuals. Higher costs can be made to fade away because on the government balance sheet. The Reid bill’s $371.9 billion in new health taxes are also apparently not a new cost because they can be passed along to consumers, or perhaps will be hidden in lost wages.

What’s that called?

This is the paleo-liberal school of brute-force wealth redistribution, and a very long way from the repeated White House claims that reform is all about “bending the cost curve.” The only thing being bent here is the truth.

The CBO is almost certainly underestimating the cost increases. Based on its county-by-county actuarial data, the insurer WellPoint has calculated that Mr. Baucus’s bill would cause some premiums to triple in the individual market. The Blue Cross Blue Shield Association came to similar conclusions.

Prices for the individual market are regulated community rating. With it, insurers charge nearly uniform rates regardless of customer health status or habits. The CBO doesn’t think this will have much of an effect, but costs inevitably rise when insurers aren’t allowed to price based on risk. This is why today some 35 states impose no limits on premium variation and six allow wide differences among consumers.

Amanda Kowalski of MIT, William Congdon of the Brookings Institution and Mark Showalter of Brigham Young have found similar results. In a 2008 paper in the peer-reviewed Forum for Health Economics and Policy, these economists found that state community rating laws raise premiums in the individual market by 20.9% to 33.1% for families and 10.2% to 17.1% for singles. In New Jersey, which also requires insurers to accept all comers (so-called guaranteed issue), premiums increased by as much as 227%.

The Real Crime

The crime is there are plenty of reform alternatives that really would reduce insurance costs. According to CBO, the relatively modest House GOP bill would actually reduce premiums by 5% to 8% in the individual market in 2016, and by 7% to 10% for small businesses. The GOP reforms would also do so without imposing huge new taxes.

Once again, the CBO comes in with the unbiased truth, independently backed up by brains at MIT, the Brookings Institution and Brigham Young. And once again, Reid and his Democrat Party spin and distort the facts to doctor up this pig while hoping we won’t notice.

The Democrats tell us it’s all about “lowering costs.” The truth is it doesn’t. It raises them. Clearly, Obama, Reid and Nancy don’t care. They’re really only interested in creating yet another government run program. Time after time, history shows it amounts to being an incredible waste of money.

The Internal Revenue Service will be your Health Care Enforcer


H.R. 3962, the “Affordable Health Care for America Act” contains thirteen new tax hikes. They are listed here for your enjoyment.


Employer Mandate Excise Tax (Page 275): If an employer does not pay 72.5 percent of a single employee’s health premium (65 percent of a family employee), the employer must pay an excise tax equal to 8 percent of average wages. Small employers (measured by payroll size) have smaller payroll tax rates of 0 percent (<$500,000), 2 percent ($500,000-$585,000), 4 percent ($585,000-$670,000), and 6 percent ($670,000-$750,000).

Individual Mandate Surtax (Page 296): If an individual fails to obtain qualifying coverage, he must pay an income surtax equal to the lesser of 2.5 percent of modified adjusted gross income (MAGI) or the average premium. MAGI adds back in the foreign earned income exclusion and municipal bond interest.

Medicine Cabinet Tax (Page 324): Non-prescription medications would no longer be able to be purchased from health savings accounts (HSAs), flexible spending accounts (FSAs), or health reimbursement arrangements (HRAs). Insulin excepted.

Cap on FSAs (Page 325): FSAs would face an annual cap of $2500 (currently uncapped).

Increased Additional Tax on Non-Qualified HSA Distributions (Page 326): Non-qualified distributions from HSAs would face an additional tax of 20 percent (current law is 10 percent). This disadvantages HSAs relative to other tax-free accounts (e.g. IRAs, 401(k)s, 529 plans, etc.)

Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327): This would further erode private sector participation in delivery of Medicare services.

Surtax on Individuals and Small Businesses (Page 336):
Imposes an income surtax of 5.4 percent on MAGI over $500,000 ($1 million married filing jointly). MAGI adds back in the itemized deduction for margin loan interest. This would raise the top marginal tax rate in 2011 from 39.6 percent under current law to 45 percent—a new effective top rate.

Excise Tax on Medical Devices (Page 339): Imposes a new excise tax on medical device manufacturers equal to 2.5 percent of the wholesale price. It excludes retail sales and unspecified medical devices sold to the general public.

Corporate 1099-MISC Information Reporting (Page 344): Requires that 1099-MISC forms be issued to corporations as well as persons for trade or business payments. Current law limits to just persons for small business compliance complexity reasons. Also expands reporting to exchanges of property.

Delay in Worldwide Allocation of Interest (Page 345): Delays for nine years the worldwide allocation of interest, a corporate tax relief provision from the American Jobs Creation Act

Limitation on Tax Treaty Benefits for Certain Payments (Page 346): Increases taxes on U.S. employers with overseas operations looking to avoid double taxation of earnings.

Codification of the “Economic Substance Doctrine” (Page 349): Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related.

Application of “More Likely Than Not” Rule (Page 357): Publicly-traded partnerships and corporations with annual gross receipts in excess of $100 million have raised standards on penalties. If there is a tax underpayment by these taxpayers, they must be able to prove that the estimated tax paid would have more likely than not been sufficient to cover final tax liability.

With the Capital building as a backdrop, the House speaker, Nancy Pelosi (D-CA) on Thursday unveiled HR-3962, the Affordable Health Care for America Act.

vacine

Like it or not, here it is.


If placed upon the floor, the 19 pound bill, all 1,990 pages of it, would stand nearly 9 inches tall. According to the CBO, the cost of the plan will be $1.055 trillion over the next ten years.


However, a November 2, 2009, AP news report says Democrats added billions more on higher spending for public health, a reinsurance program to hold down retiree health costs, payments for preventive services and more. The report says according to numerous Democratic officials and figures contained in an analysis by congressional budget experts the health care bill headed for a vote in the House in the first week of November will cost $1.2 trillion or more over a decade.


The bill is a combination of H.R. 3200, America’s Affordable Health Choices Act (approved by the Committees on Education and Labor, Energy and Commerce, and Ways and Means) and includes other provisions negotiated last week behind closed doors by the Democrat leadership.


Replacing HR-3200, it is certainly no shorter and no less complex. HR-3962 is a government-sponsored plan to take over the health insurance industry. The bill is designed to force Americans to pay for cradle-to-grave health care services as defined by the United States government and penalizes both employer and the individual for non-participation in the form of “surtaxes.”


HR-3962 is expected to come to the floor of the House the week of November 2.

The House and Senate Versions

The House bill is very similar to a measure under development by the Senate majority leader, Harry Reid of Nevada, who is seeking to combine bills passed by two committees. The bill would impose a new income surtax on individuals earning more than $500,000 and couples earning more than $1 million which is being labeled as a millionaire’s tax.

NancyPelosi

Nancy Pelosi at the unveiling of HR-3962 on October 29, 2009


The Senate bill would impose a tax on high-cost insurance policies, a move that experts say could help lower long-term health care costs by giving employers, employees and private insurers incentive to reduce expenditures.


In addition to expanding coverage for the uninsured, both the House and Senate versions of the legislation would severely tighten restrictions on the health insurance industry, for instance, by barring the denial of coverage based on pre-existing medical conditions.



Democrats have insisted that the health care legislation is crucially needed while Congressional Republicans warn that it will raise taxes, unwisely cut Medicare services and increase health care costs overall.

“That’s hardly the reform the American people need or deserve,” House Republicans said in a news release.

In summary, the bill contains the following points.

* Creation of a government-run health insurance program – potential to cause 114 million Americans to lose their current coverage.

* Forcing of individuals to purchase government-run Exchange – private health insurance industry will be forced out of business.

* Employers would be encouraged to drop existing coverage, due to regulations that would raise premiums.

* New federal spending (Trillions of dollars) and increased deficit will affect long-term fiscal solvency of America.

* Taxes will be levied on Americans who purchase insurance, Americans who do not purchase insurance and millions of small businesses – leading to job losses and increased healthcare premiums.

* Cuts to Medicare Advantage plans will result in increased premiums and more than 10 million seniors having their coverage dropped.

Penalties for non-participation

Section 59B on page 297 of HR-3962 spells out the rules for individual participation and explains how the individual will be taxed as a penalty if the individual fails to enroll in a health care plan. This idea is based upon making the plan more affordable for all, however, the bill makes no provision for that.

‘‘SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE.

(a) TAX IMPOSED.In the case of any individual who does not meet the requirements of subsection (d) at any time during the taxable year, there is hereby imposed a tax equal to 2.5 percent of the excess of
(1) the taxpayer’s modified adjusted gross income for the taxable year, over
(2) the amount of gross income specified in section 6012(a)(1) with respect to the taxpayer.

Individuals will be taxed 2.5% of their adjusted gross income if they do not purchase “acceptable health care coverage.” For many who cannot afford coverage, the fine is also out of reach.

Taxes will increase for both individuals and small businesses. The claim is that the taxes are being charged to offset the cost of the federal government financing the takeover of the health care industry, however, the bill states any amount collected as penalty “shall be deposited as miscellaneous receipts in the Treasury of the United States.’’ There is no mention of deposits to be made outside of the Treasury.

Small businesses will see a 5.4 percent “surtax” that will begin in 2011 and existing tax-exempt health savings programs will be eliminated. Beginning in 2013 a 2.5% excise tax will be added to all medical devices.

More New Taxes

Grace Period For Current Employment Based Health Plans (Page 92):

In General the Commissioner shall establish a grace period whereby, for plan years beginning after the end of the 5-year period beginning with Y1, an employment-based health plan in operation as of the day before the first day of Y1 must meet the same requirements as apply to a qualified health benefits plan under section 201, including the essential benefit package requirement under section 221.

This is interpreted to mean that after a 5-year period of time, people will be transferred into a health care plan defined by the government and not get to purchase private health insurance different from what the government provides.

With all plans being equal and with the government being the largest provider, the implication is that private insurers will not be able to compete effectively and consequently the private sector health care providers will be forced out of business. This leaves the federal government as the sole provider.

Employer Mandate Excise Tax (Page 275): If an employer does not pay 72.5 percent of a single employee’s health premium (65 percent of a family employee), the employer must pay an excise tax equal to 8 percent of average wages. Small employers (measured by payroll size) have smaller payroll tax rates of 0 percent (<$500,000), 2 percent ($500,000-$585,000), 4 percent ($585,000-$670,000), and 6 percent ($670,000-$750,000).

Individual Mandate Surtax (Page 296): If an individual fails to obtain qualifying coverage, he must pay an income surtax equal to the lesser of 2.5 percent of modified adjusted gross income (MAGI) or the average premium. MAGI adds back in the foreign earned income exclusion and municipal bond interest.

Medicine Cabinet Tax (Page 324): Non-prescription medications would no longer be able to be purchased from health savings accounts (HSAs), flexible spending accounts (FSAs), or health reimbursement arrangements (HRAs). Insulin excepted.

Cap on FSAs (Page 325): FSAs would face an annual cap of $2500 (currently uncapped).

Increased Additional Tax on Non-Qualified HSA Distributions (Page 326): Non-qualified distributions from HSAs would face an additional tax of 20 percent (current law is 10 percent). This disadvantages HSAs relative to other tax-free accounts (e.g. IRAs, 401(k)s, 529 plans, etc.)

Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327): This would further erode private sector participation in delivery of Medicare services.

Surtax on Individuals and Small Businesses (Page 336): Imposes an income surtax of 5.4 percent on MAGI over $500,000 ($1 million married filing jointly). MAGI adds back in the itemized deduction for margin loan interest. This would raise the top marginal tax rate in 2011 from 39.6 percent under current law to 45 percent—a new effective top rate.

Excise Tax on Medical Devices (Page 339): Imposes a new excise tax on medical device manufacturers equal to 2.5 percent of the wholesale price. It excludes retail sales and unspecified medical devices sold to the general public.

Corporate 1099-MISC Information Reporting (Page 344): Requires that 1099-MISC forms be issued to corporations as well as persons for trade or business payments. Current law limits to just persons for small business compliance complexity reasons. Also expands reporting to exchanges of property.

Delay in Worldwide Allocation of Interest (Page 345): Delays for nine years the worldwide allocation of interest, a corporate tax relief provision from the American Jobs Creation Act

Limitation on Tax Treaty Benefits for Certain Payments (Page 346): Increases taxes on U.S. employers with overseas operations looking to avoid double taxation of earnings.

Codification of the “Economic Substance Doctrine” (Page 349): Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related.

Application of “More Likely Than Not” Rule (Page 357): Publicly-traded partnerships and corporations with annual gross receipts in excess of $100 million have raised standards on penalties. If there is a tax underpayment by these taxpayers, they must be able to prove that the estimated tax paid would have more likely than not been sufficient to cover final tax liability.

The Wall Street Journal calls HR-3962 “The Worst Bill Ever”

A Recent WSJ opinion piece characterizes the bill as irrational and points to higher insurance premiums with the spectre of higher taxes and a rising federal deficit. By all accounts, this bill should have never seen the light of day.

With a nation already facing a burgeoning national debt brought on by Obama’s out-of-control spending policies, Nancy Pelosi’s health care bill will expand over time and result in subsequent higher taxes and requiring an expanding government to support it.

In control of both the House and the Senate, the Democrats are hell-bent upon passing this wildly unpopular bill in spite of the real possibility they may lose seats. This suits Nancy Pelosi who leads the party intend upon shoving their unique version of health care coverage down the throats of the rest of the nation. What the Democrats don’t seem to be able to understand is that while they blindly chase their ideas of health care entitlement they actually pull the plug on the fiscal health of the nation, placing the future of America’s freedom and prosperity in peril.

To afford rising taxes to pay for a bulging deficit in addition to paying for Nancy’s health care program, the economy will no doubt shrink in response to Americans pulling in the reigns of their household budgets. The bill not only affects the private worker, it also places new tax burdens upon business. The domino-like effects should be obvious. The irony here is that many more Americans may no longer be in a position to afford health care.

The Republican Plan

On November 5, 2009, House Republicans presented their health care plan.

The bill that would reward states for reducing the number of uninsured, limit damages in medical malpractice lawsuits and allow small businesses to band together and buy insurance exempt from most state regulation.

In its opening section, the Republican bill, which has no chance of passing, promises to lower health care costs and expand insurance coverage “without raising taxes, cutting Medicare benefits for seniors, adding to the national deficit, intervening in the doctor-patient relationship or instituting a government takeover of health care.”

The bill defines the differences between Republicans and Democrats, who intend to take up their bill on the House floor this week, after resolving intramural disputes over abortion and immigration.

Unlike the Democrats’ strategy of trying to provide near-universal coverage and force other major changes to the insurance system, the Republican approach is an incremental one with a different goal — controlling health care costs.

GOP lawmakers propose to do so through market-oriented measures that would limit medical malpractice lawsuits, expand the use of tax-sheltered medical savings accounts, let people shop for insurance outside of their own states and make it easier for small businesses and hard-to-insure people to get coverage. The ideas reflect conservatives’ suspicion of sweeping new programs, federal spending and additional regulation.

The Republican bill differs from the Democratic measure in that it would not require people to obtain insurance or require employers to offer it. It is almost surely cheaper than the House Democrats’ bill because, unlike that proposal, it would not expand Medicaid or offer federal subsidies to low- and middle-income people to help them buy insurance. Nor would the Republican bill impose new taxes.

The House Republican bill would not explicitly prohibit insurers from denying coverage to people because of pre-existing medical conditions, even though many Republicans have said they agree with Democrats that the federal government should outlaw such denials

The House Republican leader, Representative John A. Boehner of Ohio, said his bill would “lower costs and expand access at a price our nation can afford.”

In a few ways, the House Republican bill resembles the one headed for the House floor. It would allow young adults to stay on their parents’ health plans at least through age 24, compared with 26 under the Democrats’ bill.

House Republicans, like the Democrats, would prohibit insurers from imposing annual or lifetime limits on spending for covered benefits. And they would prohibit insurers from canceling or rescinding coverage after a person became sick unless the person had intentionally concealed “material facts” about a medical condition.

The bill would offer $50 billion in federal “incentive payments” over the next 10 years to states that reduce the cost of health insurance or the proportion of their residents who are uninsured.

The bill would also make it easier for insurers to sell insurance across state lines. Policies would be subject to laws in a company’s home state, but would be exempt from many of the consumer protection laws, rating rules and benefit mandates in other states where the company sold coverage.

Republicans would also allow small businesses to pool their insurance buying power through “association health plans,” sponsored by trade and professional associations and chambers of commerce. These plans would have “sole discretion” over what services to cover.

The GOP plan is, by design, a less costly bill with more modest ambitions. Its price tag, which is still to be determined, surely will be far less than the House Democratic bill. According to the nonpartisan Congressional Budget Office, the cost of that plan would exceed $1 trillion over 10 years.

Unlike the Democratic plan, it does not include subsidies or other provisions that would make coverage more affordable to people of modest means.

“What we’ve learned over many, many years is that the reason people don’t have insurance is that they can’t afford it,” said Drew Altman, president of the Henry J. Kaiser Family Foundation, an nonpartisan health policy research group. “You can’t make much progress toward helping the uninsured unless you help them buy it.”

The Republicans’ proposals long have been on their wish list, yet they were not enacted even when the party controlled Congress and the White House. And they are being resurrected at a time when some Republicans warn that the party is in danger of being seen as guardians of an unpopular status quo in health care.

“Come campaign time, voters need to know what healthcare reforms Republicans have supported,” said Whit Ayres, a GOP pollster.

Republicans, who harbor no hopes of passing their alternative plan during Saturday’s scheduled debate, have spent months criticizing the Democrats’ plan as an intrusive, expensive government program — an argument with strong appeal for the party’s conservative base.

The Republican bill lacks many major elements of the Democratic proposal: There is no expansion of Medicaid, no requirement that individuals buy insurance, no penalties for employers that do not offer coverage, and no subsidies to help the needy pay premiums.

In addition, the GOP proposal does not include one of the most popular elements of the Democrats’ plan — a ban on denying coverage to people with preexisting medical conditions.

But the Republican plan has adopted some of the more modest Democratic provisions. It too would make it easier for young adults to remain on their parents’ health policies. It also would end the controversial insurance practices of imposing annual or lifetime limits on benefits and of canceling coverage after a policyholder becomes sick.

And rather than give more power to the federal government to address the nation’s healthcare problems, the Republican plan looks to states, market forces and individuals.

Their bill would offer $15 billion in aid to the states to form “high-risk” insurance pools that would cover people — including those with preexisting conditions — who cannot get coverage through their jobs or in the individual market. The GOP bill also would provide incentive grants for states that reduce premiums and the ranks of the uninsured. Under a reinsurance program, a state pays a large share of the cost if claims — for an individual or a group — exceed some threshold.

The House Republican whip, Eric Cantor of Virginia, said high-risk pools and reinsurance programs would “guarantee that all Americans, regardless of pre-existing conditions or past illnesses, have access to affordable care.” Health policy experts say insurers can lower premiums if state reinsurance programs protect them against the risk of catastrophic costs.

Small businesses would be encouraged, but not required, to cover their employees under provisions that would make it easier to band together to get group rates.

To curb costs through increased competition, the GOP plan would make it easier for insurance companies to sell policies across state lines. The bill would impose new curbs on medical malpractice lawsuits — on the theory that health care inflation is fueled by defensive medicine and the rising cost of malpractice insurance. The provision sets a $250,000 limit on non-economic damages, for physical and emotional pain and suffering. It would establish new hurdles for consumers to obtain punitive damages and would limit contingency fees for plaintiffs’ lawyers.

To increase incentives for individuals to control their own health spending, the bill would expand the use of tax-favored health savings accounts. And it would allow employers to provide steeper discounts in insurance premiums to employees who adopt healthy lifestyles.

House GOP Health Bill Would Reduce Uninsured by 3 Million

Congressional budget umpires say the House Republican health plan would only make a small dent in the number of uninsured Americans.

In an analysis released late Wednesday, the Congressional Budget Office said the GOP plan would reduce the number of uninsured by 3 million.

The Democratic bill, by comparison, would reduce the number of uninsured by 36 million. Both estimates are for the year 2019.

While the Democrats’ bill would cover 96 percent of eligible Americans, the Republican alternative would cover 83 percent — roughly comparable to current levels.

The budget office says the Republican plan would reduce federal deficits by $68 billion over the 10 year period, and push down premiums for privately insured people.

CBO: Republican health plan would reduce premiums, cut deficit

The Congressional Budget Office Wednesday night released its cost analysis of the Republican health care plan and found that it would reduce health care premiums and cut the deficit by $68 billion over ten years.

The Republican plan does not call for a government insurance plan but rather attempts to reform the system by creating high-risk insurance pools, allowing people to purchase health insurance policies across state lines and instituting medical malpractice reforms.

“Not only does the GOP plan lower health care costs, but it also increases access to quality care, including for those with pre-existing conditions, at a price our country can afford,” House Minority Leader John Boehner, R-Ohio, said.

According to CBO, the GOP bill would indeed lower costs, particularly for small businesses that have trouble finding affordable health care policies for their employees. The report found rates would drop by seven to 10 percent for this group, and by five to eight percent for the individual market, where it can also be difficult to find affordable policies.

The GOP plan would have the smallest economic impact on the large group market that serves people working for large businesses that have access to the cheapest coverage. Those premiums would decline by zero to 3 percent, the CBO said.

The analysis shows the Republican plan would do little to expand coverage, which Democrats were quick to point out in a late night missive to reporters.

“Here’s the Bottom line – Americans lose and Insurance companies win under the Republican plan,” Pelosi spokesman Nadeam Elshami said.

The CBO found that under the Republican plan, insurance coverage would increase by about 3 million and that the percentage of insured non-elderly adults would remain at about 83 percent after ten years. The House bill would increase coverage to an additional 36 million people, raising the number of insured to 96 percent.

The CBO put the price tag for the GOP plan at $61 billion, a fraction of the $1.05 trillion cost estimate it gave to the House bill that lawmakers are set to vote on this weekend. And the CBO found that the Republican provision to reform medical malpractice liability would result in $41 billion in savings and increase revenues by $13 billion by reducing the cost of private health insurance plans.

What Happens Now?

In the first week on November, House leaders plan to take up the bill introduced Thursday while Senate Majority Leader Harry Reid aims to unveil a bill to bring to Senate floor by early November. The bill must get 60 votes to open debate, which will without doubt prove to be lengthy. It may well consume much of November and perhaps may go into December.

Beyond that time, if a full Senate and House both pass bills, they hold a conference committee to work out differences which leads to next year as the soonest when President Barack Obama can sign the resulting bill into law.

The bill represents the latest attempt to overhaul America’s health care system.

1. Think Progress notes with glee that Sec. 107 outlaws treating domestic violence as a pre-existing condition. Do you even know what to think of that?

2. The Weekly Standared weighs in saying that HR 3962 pays for abortions, cuts medicare, raises taxes + fees + the deficit. What’s not to love?

3. The Washington Times reports that the House unveiling ceremony for HR 3962 was closed to the public. I repeat, it was closed to the public. Vistitors had to be listed on a pre-approved list.

4. American Spectator points out that HR 3962 includes a mandate that forces individuals to purchase insurance or pay a tax + the employer mandate. It also includes government-run insurance exchanges. American Spectator also shows that the bill will add a huge new section to the federal tax code: PART VIII: HEALTH CARE RELATED TAXES. Can you imagine this ambiguous section of the code not changing every year? Your liberty is at stake.

In a recent Wall Street Journal Op-Ed piece, Lawrence Kadish presented a sobering assessment on the nation’s exploding debt and the dangers posed by the growing cost of servicing that debt:

It is the interest on the national debt that makes our future unstable. The exploding size of that burden suggests that, short of devaluing the dollar and taking a large bite out of the middle class through inflation and taxation, there is no way to ever pay down that bill.

As of Sept. 30, 2009, the national debt was almost $12 trillion and interest on that debt was $383 billion for the year, according to the Treasury Department’s Bureau of the Public Debt. The Congressional Budget Office on Oct. 7 estimated the 2009 budget deficit to be almost $1.4 trillion (about 10% of GDP). In August, the White House Office of Management and Budget (OMB) estimated total government revenues at about $2 trillion. The revenue estimate included $904 billion from individual income taxes. This means the cost of interest on the debt represented more than 40 cents of every dollar that came in from individual income taxes. …

During Jimmy Carter’s years in the White House, Treasury yields reached 15%. The 2009 average interest rate on the debt was only 3.2%. With our mounting national debt and budget deficits, it is reasonable to assume that in the near future interest rates on new and refinanced debt could double or triple.

In stark but simple terms, unless Americans are made aware of this financial crisis and demand accountability, the very fabric of our society will be destroyed. Interest rates and interest costs will soar and government revenues will be devoured by interest on the national debt. Eventually, most of what we spend on Social Security, Medicare, education, national defense and much more may have to come from new borrowing, if such funding can be obtained. Left unchecked, this destructive deficit-debt cycle will leave the White House and Congress with either having to default on the national debt or instruct the Treasury to run the printing presses into a policy of hyperinflation.

It is against this background that Washington is now debating whether to create social programs it can’t afford.

The Health Care Reform bill America cannot afford

With all five congressional health care bills finally out of committee and with a summer of tempestuous town hall meetings behind them, the White House and top Democrats must merge the different bills into versions that can win a majority in the House and get the 60 votes needed to pass in the Senate — even as the Congressional Budget Office admits it can’t confirm whether the legislation will save Americans a dime.

Senate leaders will meet Wednesday, October 15, 2009, to start merging the Finance Committee bill that was approved Tuesday with the Senate Health, Education, Labor and Pensions Committee bill that was passed earlier this year. Others expected to attend Wednesday’s meeting are Sen. Christopher Dodd, D-Conn, who shepherded the Health Committee bill, and Sen. Max Baucus, D-Mont., who oversaw the Finance Committee bill.

Merging the two bills will not be easy

Both bills were written by Democrats, but that’s not going to make it easier for Senate Majority Leader Harry Reid, who has said he wants to complete the wedding quickly and get historic health care overhaul legislation onto the Senate floor by the week of Oct 26. The bills share a common goal of providing all Americans with access to affordable health insurance, but they differ on how to accomplish it.

The Senate Finance Committee approved its version of health care reform by a 14-9 vote Tuesday, clearing the way for it to be merged with the Health Committee’s bill. Once merged, the bill will be up for vote by the full Senate.

The Finance Committee bill has no government-sponsored insurance plan and no requirement on employers that they must offer coverage. It relies instead on a requirement that all Americans obtain insurance. The legislation won its first Republican support when Sen. Olympia Snowe of Maine broke ranks with her party, saying she was answering the call of history. “My vote today is my vote today,” Snowe said. “It doesn’t forecast what my vote will be tomorrow.”

The Health Committee bill, passed earlier by a panel in which liberals predominate, calls for both a government plan to compete with private insurers and a mandate that employers help cover their workers. Those are only two of dozens of differences.

In general, the bills moving toward floor votes in both houses would require most Americans to purchase insurance, provide federal subsidies to help those of lower incomes afford coverage and give small businesses help in defraying the cost of coverage for their workers.

The measures would bar insurance companies from denying coverage on the basis of pre-existing medical conditions and for the first time limit their ability to charge higher premiums on the basis of age or family size. Expanded coverage would be paid for by cutting hundreds of billions of dollars from future Medicare payments to health care providers. Each chamber also envisions higher taxes — an income tax surcharge on million-dollar wage-earners in the case of the House, and a new excise levy on insurance companies selling high-cost policies in the Senate Finance Committee bill.

Apart from Snowe, Finance Committee Republicans cited higher taxes, a greater federal role in the insurance industry and other concerns as they lined up to oppose the bill.

From $829 Billion to $2 Trillion

Until recently, the legislation was projected to cost $829 billion during 10 years. That number has changed dramatically.

On October 16, 2009, Senate Majority Leader Harry Reid talked about the calculated savings of Medical Malpractice (Tort) reform and in the process let the true cost of the health care bill slip out. He compares the $54 Billion in predicted savings against the 2 trillion dollar cost of National Health Care.

Reid said, “He (the President) talked about CBO saying that there would be $54 billion saved each year if we put caps on medical malpractice and put some restrictions — tort reform — $54 billion. Sounds like a lot of money, doesnt it, Mr. President? The answer is yes. But remember, we’re talking about $2 trillion, $54 billion compared to $2 trillion. You can do the math. we can all do the math. It’s a very small percent.”