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The major outlines of the just released bill are no different than the policy train wreck the House passed earlier this month...

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The Five Flaws of the Reid Health Bill

The major outlines of the just released bill are no different than the policy train wreck the House passed earlier this month…

We’re still poring over Majority Leader Harry Reid’s (D-NV) just released health care overhaul, but the major outlines of the bill are no different than the policy train wreck the House passed earlier this month.

The five major flaws of both the Pelosi and Reid Bills are:

1. A New Public Plan. Both the House and Senate bills would create a new government-run health care plan — a so-called public plan — intended to “compete” with private insurers in a new health insurance exchange. The result: widespread erosion of private insurance and substantial consolidation of federal control over health care through the exchange. Congress is incapable of guaranteeing the American people a level playing field for competition between the government plans and private health plans. As the Centers for Medicare and Medicaid Services has recently certified, what many have already concluded, millions of Americans will lose their existing employer-based coverage.

2. Federal Regulation of Health Insurance. Both the House and Senate bills would result in sweeping and complex federal regulation of health insurance that will create a one-size-fits-all federal health plan that will drive up (not down, as promised by the President) the cost of everyone’s health insurance premiums.

3. Massive Expansion of Medicaid and New Taxpayer-Funded Subsidies. Both the House and Senate would dramatically expand eligibility for Medicaid and extend generous taxpayer-funded subsidies to the middle class. Combined, such commitments are the biggest cost items in the bills would result in scores of Americans dependent on the government to finance their health care.

4. Employer Mandates. Both the House and Senate bills would impose an employer mandate for employers who do not offer coverage and for those whose benefits do not meet a new federal standard. An employer mandate would hurt low-income workers and would stifle much-needed economic growth. Our country does not need a job killing employment tax at a time of 10.2% unemployment.

5. Individual Mandates. Both the House and Senate bills would require all people to buy health insurance. Those individuals who do not purchase government qualified health care coverage would be subject to new tax penalties and in comes cases jail time.

Finally, don’t be fooled by the reported cost estimates. The Senate and House bills use budget gimmicks and unrealistic savings to make their proposals fit under the $900 billion limit put forth by the President. As history has proven, government health care programs end up costing much more than first promised.

We will be posting more in depth analyses as our analysts read through the bill, so stay tuned. Majority Leader Reid is promising the first vote on his health bill this Saturday. With that in mind, the Dean of Harvard Medical School, Dr. Jeffrey Flier, wrote in the Wall Street Journal yesterday:

“So the majority of our representatives may congratulate themselves on reducing the number of uninsured, while quietly understanding this can only be the first step of a multiyear process to more drastically change the organization and funding of health care in America. I have met many people for whom this strategy is conscious and explicit.”

We should not be making public policy in such a crucial area by keeping the electorate ignorant of the actual road ahead.

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Written By

Ms. Owcharenko is senior policy analyst in the Center for Health Policy Studies at The Heritage Foundation.

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