Keith Hennessy, a former economic advisor to President Bush, has posted his analysis of the health care bill and it’s a doozy. He unearths a number of interesting facts about the bill not the least of which is he claims to have found several “Byrd rule” violations, meaning that it’s likely the House will have to vote on the bill twice. The politics of that are almost to crazy to comprehend.
Other notable observations from Hennessy include:
-One-time $250 “rebate” in 2010 for beneficiaries who reach the [drug] “coverage gap” is pure politics. Send seniors a check in an election year.
-More savings from Medicare Advantage plans means fewer Medicare Advantage plans. Massive changes to the Medicare Advantage payments formulas will fundamentally change these markets. Seniors in MA plans should expect significant changes as plans adapt to the new payments rules. This is a little-discussed but significant effect of these bills, if they become law.
-Raise Medicare payroll tax by 0.9 percentage points for individuals with income > $200K and couples with income > $250K. This means you and your employer pay a combined 3.8% payroll tax on wages above these amounts. (This is the President’s proposal.) This is what they mean by “taxing the rich.” It is also crossing a decades-old line separating Social Security and Medicare funding from the rest of the budget. I would not have expected Democrats to cross that line and violate what was for them an important principle of “social insurance program,” but they really needed the money.
-Adopts a version of the President’s proposal for feds to regulate health insurance premiums in addition to States. Secretary of HHS could “review potentially unreasonable premiums and may take corrective actions, such as requiring the insurer to pay a penalty, denying or modifying the premium or ordering the plan to pay rebates to consumers.” What is a potentially unreasonable premium?? Congratulations, AHIP. You have made your industry a federally regulated utility. Have fun with that.
There’s much more where that came from. Be sure to read the whole thing.
