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The Death of the House Bill

James C. Capretta

In July, the president and the Democratic leaders in the House of Representatives argued that the time for analysis and debate was over and that the House should pass its version of health-care reform before the August recess.



Now, just three months later, House Democrats are saying that the bill they were in such a hurry to pass during the summer is old news and irrelevant. What matters now, they assert, is their new and improved version of reform, which they promise will be much better and easier to pass. Of course, they arent sufficiently confident in its virtues to open it up to public scrutiny just yet. No, they assert the bill will be different even though the legislative plan is clearly going to be just as it was in July. House Democrats are hoping to unveil their updated version of Obamacare as close as possible to a vote, probably in November, so that there is no time for public opposition to stop it.



It might work. But then again, thats what they tried to do with version 1.0. The original bill was made available on July 14 with the intention of having a vote in the full House on July 31. That strategy failed miserably because it took just a few days for the public to figure out that what House Democrats were pushing represented far more governmental control of health care than the public was comfortable with. Momentum toward passage dwindled.



Now even the original sponsors of the House bill are walking away from it. On Wednesday, Representative Pete Stark (D.-California), the chairman of the Ways and Means Health Subcommittee, responded to a new and devastating analysis of the original House bill (as passed by the Ways and Means Committee on July 17) by saying that it is beside the point. House leaders are constructing a new version, so the new analysis is out-of-date relative to what will ultimately be voted on in the House, Representative Stark said.



The analysis in question was conducted by the Chief Actuary at the Centers for Medicare and Medicaid Services (CMS). Given what it says, its understandable that Representative Stark would now disown the bill he helped write. Here are some of the findings:



- Total national health spending would increase by $750 billion over the next decade. (So much for bending the cost curve.)



- The overall cost of the House bill will be $1.2 trillion over the period between 2010 and 2019. By 2019, the annual cost of the entitlement expansions would be $236 billion, rising at a rate of 9 percent annually. After all this spending, there would still be 23 million uninsured residents in 2019.



- The presidents signature initiatives to slow the pace of rising costs comparative effectiveness research, prevention and wellness efforts, and payment changes in Medicare wont work as advertised. The savings are almost non-existent.



- The cuts in Medicare Advantage plans would result in less generous benefit packages for millions of seniors. The actuaries estimate the Houses Medicare Advantage cuts, which are unlikely to change in any new version of the bill, would force about 8.5 million seniors out of the coverage they would prefer and back into the traditional program. (So much for keeping the coverage you have today.)



- Democratic proposals to impose arbitrary, across-the-board payment rate cuts for hospitals, nursing homes, and home health agencies based on presumed productivity gains are unlikely to work as planned. The actuaries suggest that some institutions wont be able to hit the targets because health care is more labor intensive than other sectors of the economy. Consequently, the cuts could force some organizations to leave the Medicare program, thus possibly jeopardizing access to care for beneficiaries.



In recent days, House Speaker Nancy Pelosi and her leadership aides have let it be known to reporters that they have gotten more favorable reviews of their updated bill from the Congressional Budget Office (CBO). According to press accounts, the new bill, which is not available to the public, comes in under $900 billion and will cut the federal budget deficit for two decades.



From a process standpoint, CBO should never allow members of Congress to characterize the findings of confidential cost estimates without consequences. Undoubtedly, CBO staff is told not to share its analysis with anyone until the bill is unveiled. But if House leaders decide to go public with CBOs apparent bottom line, CBO really should be obligated to go public with the entire analysis to ensure no misunderstanding. Otherwise CBOs findings can be distorted. House Democrats are trying to build momentum again toward passage by creating the impression they have found a painless way to turn their budget-busting bill from July into one that actually cuts the deficit. Its CBOs job to make sure no one gets away with this kind of phony free-lunch argument. If in fact a new version of the House bill reduces the federal budget deficit over two decades, someone is paying. Who? Heres betting thats its the American middle class. And as soon as that becomes known, the new updated House bill is likely to become just as unpopular as the now dead and buried old one.

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