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Health Care's Nitty-Gritty

by John M. Curtis
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Throwing a monkey wrench into Democrats’ health reform, Sen. Joe Lieberman (I-Conn.) signaled he’d filibuster Sen. Majority Leader Harry Reid’s plan to expand Medicare. Scheduled to go bust without major changes in 2016, Lieberman couldn’t bring himself to support Reid’s plan to allow 55-year-olds to buy into Medicare. Reid hoped to have health care reform on President Barack Obama’s desk by Christmas Day but faces stiff headwinds. Despite seeing no hard data from the Congressional Budget Office on the costs of expanding Medicare, Lieberman sees Reid’s plan is not revenue-neutral but, in fact, would cost the U.S. treasury untold billions and accelerate the 45-year-old health program’s insolvency. Lieberman views Reid’s Medicare expansion as a Trojan Horse, a backdoor for a so-called “public option,” or single-payer national health care program.

Obama and Reid haven’t explained how expanding Medicare, or any version of health care reform, would reduce the whopping federal budget deficit, now exceeding $1.7 trilllion. With the economy still reeling and Fed Chairman Ben Bernanke cautioning about a double-dip recession, the Democrats couldn’t have picked a worse time to push for national health care. Throughout the debate on health reform, Lieberman has asked, much to Democrats’ annoyance, the right questions, especially the effect on the U.S. economy. Lieberman, and his Republican colleagues, believe more deficit spending hurts long-term growth, including jobs, in the economy. He won’t sign on to any plan that increases the budget deficit, hurts the U.S. dollar and weakens the prospects for economic recovery. Few economists believe that deficit spending helps the prospects for long-term economic growth.

Needing 60 votes that included Lieberman, Reid now finds himself scrambling to fix the crack in his health reform coalition, at least one vote shy of passing. “Contrary to the claims of anonymous aides, Sen. Lieberman told (Majority Leader Harry) Reid on Friday that he had problems with the Medicare provision,” said Marshall Wittman, Lieberman’s spokesman. Liberal Democrats are especially frustrated over the GOP’s defeat of the “public option,” essentially ending their dream of a single-payer, national health care program. Reid’s attempt to extend Medicare to individuals over 55, essentially adds that age-group to Medicare’s single-payer system. Republicans have ranted-and-raved about the “public option” as a government takeover, when they supported the biggest expansion of Medicare adding Part D in 2003, the prescription drug program.

Instead of negotiating with Republicans, Democrats chose to go-it-alone with party moderates, hoping to persuade progressive-minded Republicans, like Sen. Olympia Snowe (R-Maine) and Sen. Susan Collins (R-Maine), to support Reid’s Medicare expansion. While Reid said Lieberman flip-flopped, the Connecticut independent has remained consistent with respect to reducing U.S. budget deficits. Obama and Reid have sold health care reform as a way for reducing budget deficits. Lieberman’s opposition signals a major compromise for Reid, who concocted the Medicare-at-55-alternative because the “public option” was dropped. Most conservatives have problems with expanding Medicare because of the program’s expected insolvency, but, more importantly, its low reimbursement rates for doctors, hospitals and clinics, reducing national participation.

Democrats’ reform plan was supposed to slow inflation in the health insurance industry, where escalating costs continue to usurp the family budget. Recent estimates by the CBO indicate that covering millions of uninsured citizens would increase health care spending for the indefinite future. Obama hoped his plan would reduce government spending on health care. All indications point toward greater federal outlays for health-related services, should the government insure the 40 million Americans without health insurance. While Democrats want reform by Christmas Day, they should consider GOP proposals to allow subscribers to purchase more competitive out-of-state insurance policies. Sen. Byron Dorgan (D-N.D.) also wants to end the current ban on purchasing Canadian or Mexican drugs. Ending the ban on across-the-border drug sales would lower drug costs nationwide.

Lieberman’s expected filibuster reminds Reid that he can’t just run over Republicans or moderate Democrats seeing problems with expanding Medicare coverage to individuals over 55. With exploding budget deficits harming the economy, Lieberman can’t see how Democrats’ current heath proposals does anything except make a bad situation worse. “Our bottom line is the bills as they are coming through will genuinely slow the growth of health care spending, both public and private, by about 1% a year for the extended period,” said Christine Romer, chair of the Council of Economic Advisors, concerned that Reid and Obama’s current bill increases government spending and adds to ballooning federal budget deficits. Instead of striking backroom deals, Reid should continue negotiating in good faith, looking more seriously at cost-effective Republican proposals.

About the Author

John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He’s editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.

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