Sticker shock threatens to stall health care overhaul

Jun 22 2009

"No one can figure out a politically acceptable way to pay for an overhaul of America's health care system, and until someone does, the effort is stalled. Maybe indefinitely," McClatchy reports. Michael Tanner, a "health care analyst" at the Cato Institute, says "it's quite feasible that the whole thing could crash and burn because of sticker shock."

The Senate Finance Committee has postponed writing legislation until July. "Legislative committees plan hearings and bill-writing sessions next week, and will face two key cost-related obstacles: No one really knows any plan's price tag, and few so far are willing to take the political risk of raising taxes to pay for it. Add to that growing public wariness: Polls show people are increasingly disturbed by record federal deficits. A Wall Street Journal/NBC News poll conducted June 12 to 15 found that 58 percent said that the president and Congress should focus most on keeping the deficit down, even if that means it will take longer for the economy to recover."

While "lawmakers from both parties said that they agree on most principles," the potential costs are "a boulder no one can move." The White House has said "it it can save $622 billion in health care costs over the next 10 years by paring hospital subsidies to the uninsured, changing how certain Medicare payments are made to providers, and cutting waste and fraud from Medicare and Medicaid." The rest would likely be paid for in tax increases. The Congressional Budget Office analyzed the Health, Education, Labor and Pensions, which would subsidize people to help them pay for insurance premiums, and found that "those subsidies alone would cost an estimated $1.28 trillion." "Tanner warned-and CBO officials agreed-that such initial estimates are the 'floor, not the ceiling' on costs" (Lightman and Douglas, 6/19).

Republicans and Democrats alike are questioning those costs, The Los Angeles Times reports. On ABC's "This Week," Sen. Lindsey Graham, R-S.C., called the budget office's report a "death blow" to what he characterized as "a government-run health plan." Sen. Charles E. Grassley, R-Iowa, "said it may be time to scale back the most ambitious plans," while appearing on CNN's "State of the Union." "So we're in the position of dialing down some of our expectations to get the costs down so that it's affordable and, most importantly, so that it's paid for. … Because we can't go to the point where we are now of not paying for something when we have trillions of dollars of debt," Grassley said. Also on CNN, Sen. Dianne Feinstein, D-Calif., "said she wasn't sure there were enough votes among President Obama's fellow Democrats to pass a plan at the moment." She "called the question of cost 'a very major and difficult subject,'" and said she thinks "there's a lot of concern in the Democratic caucus" (Parsons, 6/22).

The Christian Science Monitor adds that Graham's statement is "a typical inside-the-Beltway flourish of partisan rhetoric. But it hints at the Republicans' increasingly hardening line and the enormity of Mr. Obama's task." Health reform on the Hill is "still in its formative stages," but the "urgency Obama is placing on reform suggests that, sooner rather than later, he might have to give some greater guidance as to what he wants-or might be willing to accept" (Sappenfield, 6/21).

The New York Times: "Senator Richard Lugar, Republican of Indiana, appearing with Ms. Feinstein, said that overhauling the health care system should be done slowly and not this year, as Mr. Obama has insisted. 'I think it should be incremental steps,' Mr. Lugar said. Mr. Lugar also suggested a period of study to find and consider alternatives."

But a New York Times/CBS News poll released Sunday found popular support for a government-sponsored public insurance option. "The national telephone survey, which was conducted from June 12 to 16, found that 72 percent of those questioned supported a government-administered insurance plan - something like Medicare for those under 65 - that would compete for customers with private insurers. Twenty percent said they were opposed" (Henry, 6/21).