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From: Olin Ross on 4 Aug 2010 23:45
Obamacare Only Looks Worse Upon Further Review: Kevin Hassett
By Kevin Hassett - Aug 1, 2010 8:00 PM CDT Mon Aug 02 01:00:06 UTC 2010

Bloomberg Opinion

One of the more illuminating remarks during the health-care debate in
Congress came when House Speaker Nancy Pelosi told an audience that
Democrats would �pass the bill so you can find out what�s in it, away
from the fog of controversy.�

That remark captured the truth that, while many Americans have a vague
sense that something bad is happening to their health care, few if any
understand exactly what the law does.

To fill this vacuum, Representative Kevin Brady of Texas, the top House
Republican on the Joint Economic Committee, asked his staff to prepare a
study of the law, including a flow chart that illustrates how the major
provisions will work.

The result, made public July 28, provides citizens with a preview of the
impact the health-care overhaul will have on their lives. It�s a
terrifying road map that shows Democrats have launched America on the
most reckless policy experiment in its history, the economic equivalent
of the Bay of Pigs invasion.

Before discussing what the law means for you, we have to look at what it
does to government. That�s where the chart comes in handy. It includes
the new fees, bureaucracies and programs and connects them into an
organizational chart that accounts for the existing structure. It�s so
carefully documented that a line connecting two structures cites the
legislative language that created the link.

Ornate System

This clearly is a candidate for most disorganized organizational chart
ever. It shows that the health system is complex, yes, but also ornate.
The new law creates 68 grant programs, 47 bureaucratic entities, 29
demonstration or pilot programs, six regulatory systems, six compliance
standards and two entitlements.

Getting that massive enterprise up and running will be next to
impossible. So Democrats streamlined the process by granting Health and
Human Services Secretary Kathleen Sebelius the authority to make
judgments that can�t be challenged either administratively or through
the courts.

This monarchical protection from challenges is extended as well to the
development of new patient-care models under Obama�s controversial
recess appointment, Donald Berwick, whom Republicans are calling the
rationer-in-chief. Berwick will run the Centers for Medicare and
Medicaid Services, where he can experiment with ways to use
administrative fiat to move our system toward the socialized medicine of
Europe, which he has at times embraced.

Closer to Home

A sprawling, complex bureaucracy has been set up that will have almost
absolute power to dictate terms for participating in the health-care
system. That�s what the law does to government. What it does to you is
worse.

Based on the administration�s own numbers, as many as 117 million people
might have to change their health plans by 2013 as their
employer-provided coverage loses its grandfathered status and becomes
subject to the new Obamacare mandates.

Those mandates also might make your health care more expensive. The
Congressional Budget Office predicts that premiums for a small number of
families who buy their insurance privately will rise by as much as $2,100.

The central Obamacare mechanism for increasing insurance coverage is an
expansion of the Medicaid program. Of the 30 million new people covered,
16 million will be enrolled in Medicaid. And you could end up in the
program whether you want it or not. The bill states that people who
apply for coverage through the new exchanges or who apply for
premium-subsidy credits will automatically be enrolled in Medicaid if
they qualify.

Hurting the Elderly

To pay for this expansion, the bill takes $529 billion from Medicare,
with roughly 39 percent of the cut coming from the Medicare Advantage
program. This represents a large transfer of resources, sacrificing the
care of the elderly in order to increase the Medicaid rolls.

For all this supposed reform, you, the American taxpayer, can expect a
bill to the tune of $569 billion.

Front and center among the new taxes is the 40 percent excise tax on
those lucky people with so-called Cadillac health plans. The higher
insurance costs that are driven by the government mandates will push
many more ordinary plans into Cadillac territory.

If the idea of taxing people with coverage deemed too good doesn�t
bother you, maybe the new 3.8 percent tax on investment income will.
That will apply even to a small number of home sales, those that
generate $250,000 in profit for an individual or $500,000 for a married
couple.

In vivid color and detail, Congressman Brady�s chart captures the huge
expansion of government coming under Obamacare. Harder to show on paper
is the pain it will cause. See it here:
http://www.house.gov/apps/list/press/tx08_brady/pr_100728_hc_chart.html

(Kevin Hassett, director of economic-policy studies at the American
Enterprise Institute, is a Bloomberg News columnist. He was an adviser
to Republican Senator John McCain in the 2008 presidential election. The
opinions expressed are his own.)

To contact the writer of this column: Kevin Hassett at
khassett(a)bloomberg.net
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