Analysis by someone who's been reading HR 3200
..Pages 1-100
Your Czar has completed reading pages 1-100 of all 1,017 pages, eager to learn how HR 3200, if passed, would make healthcare affordable to all Americans.
It’s a little hard to fathom that the entire country can be powered by the few words and amendments of the United States Constitution, but it takes 1,017 pages to discuss health insurance. Of course, as you shall read, most of these pages have little to do with health care reform, per se.
The whole first section, much as you would expect, covers basic definitions used in this document. If you read a lot of legal paperwork, as we Gormogons sadly often do, you understand the importance of defining key words and phrases early to avoid confusion later. Oddly, quite a few definitions in HR 3200 are simply cross-references to sections much later in the document. You wind up skipping around just to find out what a term even means. But that’s not unusual.
As you begin reading the actual text of the bill, you begin to notice a pattern. Roles and responsibilities of the Secretary of Health and Human Services. Commissioners. Ombudsmen. Auditors. Assistants. Departments. Commissions. You begin to realize you are reading a verbal description of a corporate organizational chart, with lengthy discussions of how these people will be staffed, compensated, replaced, and so on. The Czar was uncertain how this makes healthcare affordable.
The Czar laughed at this one: Sec 133 (a) (2) Plain language requirement: that plan information be written in plain language; or “language that the intended audience, including individuals with limited English proficiency, can readily understand and use because that language is clean, concise, well-organized, and follows other best practices of plain language writing.” Too bad that wasn’t the case when they wrote this bill.
43 pages in, the Czar muttered “Holy cow. Still nothing but definitions of terms and descriptions of people who will have Very Important and Necessary Jobs to do once this is enacted. This is reading more like an operations manual for an insurance company, not a bill.” Take note of that. It becomes important later.
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The Czar began to notice that a lot of the sections, like 2714 and 2754, purport to discuss ensuring lower premiums. But when he read it, he found nothing that described specifics. Instead, there were blanket statements that it will be someone’s responsibility to find a way to lower premiums. The Czar cannot imagine this in the real, corporate world. “My proposal is to save to you money.” How? “Hire me first, and then I’ll come up with something.”
Then the Czar gasped at Section 1173A, in which it discusses electronic administrative transactions, and then lovingly describes how databases will be established, down to optional fields, and to ensure the ability to “harmonize all common data elements.” Holy crap, when do we discuss font options? HIPAA, godsend of libertarians everywhere, isn’t even discussed until page 62.
Title II talks a lot about the different types of plans, who falls into what plan, when another plan becomes more appropriate, and discusses thinks like “culturally and linguistically appropriate services and communications.” That can only mean trifolds in a bunch of different languages at taxpayer expense.
Still, there’s no discussion of how this will save money; but there are concepts thrown around about how the SecHHS will review a bunch of different options to find the best ones representative for each type of group member. Same as before: we will make healthcare affordable for all Americans by finding a way. Real nice.
As the Czar completed his first 100 pages, he finally connected the dots.
This bill has no intention of saving Americans money on health care premiums. It reads like the administrative and operations manual of an insurance company because, in effect, that is exactly what it is!
This is an operations manual, in effect, for a new insurance company called America, Incorporated. And like new companies, the business model is not solid yet: so instead of specifics about how the company will make money, re-invest capital, or lower costs, it’s filled with SWOT analyses (strengths, weaknesses, opportunities, and threats), and detailed descriptions of jobs, roles, and tasks such as bill collection, arbitration, information technology, and so on.
Of course, this really isn’t a start-up company. It’s the federal government, so it will become a health benefits provider in exactly the same way the United States Armed Forces is a security service, the USPS is a private courier, or the FBI is a speed-trap cop.
And this is the incredible mistake of this legislation. The United States is not a competitive player: it becomes a monopoly. Yeah, the theory is pretty simple: the United States becomes an alternative to the big insurance providers. The problem is that by doing so, it squeezes out the competition, who could never muster the resources enough to counter the government muscle. Within a few years, the United States will become the largest health insurance provider in the country, with only a few niche players surviving (and even thriving).
In the next part, the Czar will review pages 101-200, and he will discuss the tax ramifications, why the bill’s proponents think this thing is so awesomely cool, and why they are completely wrong in their logic.
To read the Czar’s review of HR 3200, pages 101-200, please click here.
gormogons.com
HR 3200, Pages 101-200
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Section 201 introduces a critical concept, and no doubt this is one of the primary reasons proponents of this bill think this is a slam-dunk way to cut costs out of healthcare: the Health Insurance Exchange (HIE). Pages and pages go on, describing the HIE: but there is, nowhere in the bill, any actual definition for it.
But the Czar knows what it is, because similar concepts exist elsewhere. It’s basically a stock exchange; but instead of stock, it’s insurance plans that are bought and sold. Insurance companies can throw their basic, advanced, and premium insurance plans into a market exchange. The government then picks the cheapest and best plans to incorporate into America, Inc.’s new offerings. Is your plan too expensive? If so, America, Inc. doesn’t take it. Is yours lower than your competitors’? We’ll take a look at it.
This is the first real concept of how, theoretically, costs could go down,because it means that America, Inc., only selects the cheapest plans of all those submitted into the marketplace. Of course, an exchange only works to lower some cost because other costs go up. The implication here is that the government would always take the lowest costing offerings, meaning private insurers get stuck with more expensive ones. Ergo: private insurer premiums will go up in the HIE.
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But §206(b) announces that America, Inc., will use risk pooling to lower costs. What this means is that millions and millions of Americans (by choice or otherwise) will leave the private insurance plans to join America, Inc.’s: meaning that your risk pool will shrink dramatically. Ergo, your premiums will go up.
Again, the supporters of this bill believe that risk pooling will guarantee lower costs for public plan participants, which is actually true, initially. But the HIE and risk pooling are both guarantees that anyone with private healthcare plans will see their premiums balloon up. So why on earth would stay with a private healthcare plan? This is what the Czar meant when he said, yesterday, that you cannot compete with a government monopoly. People will effectively be given a simple choice: join our plan, or see your own plans skyrocket in price.
Of course, as private insurers see their premiums skyrocket, the prices of the plans in the HIE will increase. Yes, the government will continue to pick the lowest priced plans for the public option, but over time those plan prices will trend upward as all plans increase in price to cover the diminished risk pools within their own plans.
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Page 186, Line 21: If you are an employer, and you elect not to provide health benefits, you will be taxed 8% for each employee’s compensation paid that year.
Now we get to how the plan is supposed to pay for itself. What follows are lots of pages on how employers and employees will be taxed for this based on what percentage of health benefits the provide. The problem is, you don’t know how much money this will actually raise, so the various percentages, intended to factor together to pay for all this, are largely guesswork by the authors of the bill. To be fair, assuming everything goes perfectly, this could save money on healthcare. The problem is that if any piece does not go as hoped, everything unravels. The question is at what rate, and to what extent. The bill does not provide alternatives, backup strategies, or cost containment options for any one of these percentage plans.
So pages 101-200 can be summarized as follows: a health insurance exchange will be established to that the government can take the lowest price plans at the expense of all others.Also, risk pooling will be used to save money. As we have seen, the exchange immediately put many private insurers at an immediate disadvantage; risk pooling by the government will dramatically swell premiums for the same private insurers, who will in turn compensate for this by raising premiums across the board. This will raise prices in the exchange, so that ultimately the government plan will see premium prices increase. Ergo: initially the public plan will lower costs at the expense of the private plans, but in the long term, all costs will increase.
Additionally, funding to pay for the exchange purchases will come by taxing employers on a sliding scale based on how much they participate. All employers will be taxed a minimum of 8% per employee paycheck, net. Of course, these percentages are established by projections, so a change in the actual participation by various-sized employers will result in a net loss for the government, meaning that taxes will increase further to compensate the plan. But make no mistake: even if everything goes perfectly according to projection, corporate taxes will increase.
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HR 3200, Pages 201-300
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Poor Ronald Reagan. Perhaps you remember, as the Czar does, the astonishing Tax Reform Act of 1986. This is when Reagan was unquestionably leading a massive economic boom as well as delivering a death blow to the Cold War. The GOP owned both sides of Congress, and as a result, the nation’s tax laws were reformed in a way that cemented our economic growth right into 2008. People loved this at the time: their taxes actually dropped significantly.
Now the tables are exactly opposite, and the Democrats are using HR 3200 to, they hope, make sweeping changes to the TRA of 1986. There are an ungodly amount of references listing corrected, amended, revised, and deleted sections to the TRA, not all of which are easily deciphered to see if they even apply to healthcare reform.
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Check this out: On page 229, lines 7-17. ” [T]he Secretary of Health and Human Services shall...for skilled nursing facility services...increase payment by 10 percent for non-therapy ancillary services...and shall decrease payment for the therapy case mix component of such rates by 5.5 percent.” The Czar deleted a lot of Social Security Act cross-references here, so that you could see the words that matter. The Czar is not sure what a 10 percent increase for non-therapy ancillary services could be, but in a skilled nursing facility, that means things like the beauty shop, the cafeteria, and computer training. Therapy case mix components is a fairly obscure Medicare term that describes patients who need a combination of occupational, physical, and speech therapy. So your tax dollars will increase payments to things like manicures, but decrease money available to therapy programs that actually make skilled nursing patients recover. Unbelievable. The Czar put his grandmother into an attic for a decade, but if he had put her into a skilled nursing facility, he would prefer she spend her time getting physical therapy rather than a second cup of fruit salad at lunch.
What in the world could possibly be a reason for decreasing payments for therapy and increasing payments for non-therapy stuff????
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Now check out §1123. Payments for Efficient Areas. The Czar had to insert the definition of “efficient areas” into the following to merge two paragraphs into one sentence, but otherwise this is what was written: “In the case of services furnished under the physician fee schedule...by a supplier that is paid under such fee schedule in an efficient area ([those counties...in the lowest fifth percentile of utilization based on per capita spending...for services provided in the most recent year for which data are available as of the date of the enactment of this subsection]), in addition to the amount of payment that would otherwise be made for such services under this part, there also shall be paid (on a monthly or quarterly basis) an amount equal to 5 percent of the payment amount for the services under this part.”
In other words, if you are a county that proves to be very good at saving taxpayer dollars, the government will write you a bonus check every month for 5% of the money that you do spend. Just a thought: how about you save the taxpayers 5% and not send them any money every month or quarter? You actually need to have an incentive program for a government system? Why? Afraid that some folks won’t buy into the money saving bit? Oh right—you want to punish McAllen, Texas. Almost forgot.
Naturally, there comes §1124. Just as §1123 covers the Democrats’ backsides by punishing counties that show how screwed up ObamaCare is, §1124 needs to prove the administration’s claim that ObamaCare physicians will be able to handle more patients than ever by reducing time spent on needless tests. The PQRI, or the Physician Quality Reporting Initiative, will issue report cards on doctors who can speed through exams, and even offer them incentive payments for backing the program rather than spending whatever time is necessary per patient (p. 260, line 7ff). Sound familiar? If not, read one paragraph up.
Hey, you know those Scooter commercials, where the owner of the company promises that Medicare will pay for 100% of the cost of your motorized wheelchair or they’ll eat the difference? In §1141, the phrase “power-driven wheelchair” shall now be replaced in the Social Security Act with “complex rehabilitative power-driven wheelchair.” In other words, if you don’t specifically need the motorized chair for complex rehabilitation, Obamacare says you can freaking walk or crawl from now on. Or pay for it yourdamnself. On the one hand, the Czar can see how this is a claim to save money—right, GOP? Why do those pesky elderly folks need taxpayers to help them live normal lives? On the other hand, there’s something wickedly disingenuous about this. If AARP lived up to its name, this would be the first thing to decry.
Section 1146 mentions that $8 billion will be set aside for a Medicare Improvement Fund. New bell in the tower? New roof for the library? New playground? Any ideas where this $8B is going?
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In summary, pages 201-299 cover a lot of Democratic rewrites of both the Tax Reform Act of 1986 (back when the Dow was under 2,000, if you want a perspective on how the Reform Act changed the world) to the Social Security Act. Then, we see how some of the money is being spent: on strange activities, on non-healthcare items, on rewarding people who don't use the system, and on unspecified improvement funds. Bottom line: this portion of HR 3200 exists mainly to introduce some Democratic backlash for the success of the GOP over the years.
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HR 3200, Pages 301-400
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Mastermind correspondant Jeanne asked the Czar about reimbursing early retirees’ medical claims (particularly unions or public sector employees...even those at a non-federal level). The Czar maintains that probably isn’t the intent, but Jeanne is right: there is nothing stopping almost anyone from retiring early and having the taxpayers pick up the tab for his or her medical costs. That’s how badly this bill is written: there are very few prohibitions from abuse; instead, there are copious invitiations.
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As the Czar reads through the numerous changes to the Social Security Act (which continue throughout this section!), he is struck by one of two possibilities. Either someone has every word of 42 USC 1395 memorized and down, or this entire package was written and researched a very long time ago, refuting the claim that Waxman slapped this together in his office over a weekend, with the conclusion being that this bad piece of legislation is actually the best Democrats could come up with over at least eight years of effort. Which is it? The Czar leaves it up to the reader.
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And large amounts of 301-399 are filled with good stuff like this. The Czar would like proponents of Obamacare to answer what these items specifically do to improve healthcare coverage for all Americans:
1. §1203(a)(1)(iii): For purposes of applying this section,an individual shall be permitted to apply on the basis of self-certification of income and resources; and matters attested to in the application shall be subject to appropriate methods of verification without the need of the individual to provide additional documentation, except in extraordinary situations as determined by the Commissioner.
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2. §1204(b)(3): For each month beginning with January 2011, each prescription drug plan and each MA–PD plan shall report to the Secretary the following: The number of claims the plan has readjudicated during the month due to a beneficiary becoming retroactively eligible for subsidies available under section 1860D–14 of the Social Security Act.
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3. §1207(a): In general.—Section 1860D–14(b)(2)(B)(iii) of the Social Security Act (42 U.S.C. 1395w–114(b)(2)(B)(iii)) is amended by inserting before the period the following: “before the application of the monthly rebate computed under section 1854(b)(1)(C)(i) for that plan and year involved”.
The vast majority of educated Americans will not make any sense of this. If your doctor spoke like this, you would get another doctor, right? So if your congressional legislators are writing like this, you might consider getting different legislators, right?
Look, it’s pefectly simple. This is a pastiche of various liberal-leaning programs that have been slapped together the moment Obama won the election. No one has written this: it’s all be copy and paste stuff. Each author has trusted the author before him to do the fact-checking. As a result, this entire document is a vast mess. Sections make no sense, might contradict others, and allow for no end of creative interpretation at the taxpayer’s expense.
The Czar believes that the ordinary American supporting this initiative has not read the proposals. If he or she did, that ordinary American would say “There is no way I am entrusting my healthcare to this group. I can’t even understand what the hell they’re saying.” When you applied for healthcare coverage with your employer, do you remember how many pages the information was? Two? Three? Four? And a lot easier to understand than this stuff.
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Be afraid, folks. Because the only people who really do understand this stuff will be the first ones to twist it to their financial advantage.
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HR 3200, Pages 401-500
......Welcome to the World of the Bizarre! We are now ending the first half of HR 3200, and if the previous sections made you angry or confused, this portion will merely make you confused and angry. You could summarize these hundred pages as “That’s definitely something I would spend my hard-earned money on.”
For example, §1221(a)(1) says your tax dollars will go to find out how many healthcare facilities across the country make non-English services available. The next paragraph, (2), already concludes that enough of them do to warrant paying interpreters to be available on-site. Oh, and just to throw this in, paragraph (5) says that the Clinton-Gore Paperwork Reduction Act shall not apply to this subsection. Hah! Remember when the two of them stood next to a pallet of paper, saying this is how much paper goes into selling one item to the government? Looks like we need another pallet. Why? Who knows! Free healthcare!
Read this next paragraph slowly to savor every word. §1222 calls for a demonstration program to award 24 three-year grants to various service providers so they can promote their services to people who do not speak English. That seems a little weird. “Makuti, I have driven a nail through my forehead. I was going to let it stay there, but thanks to that newspaper ad in our language, I might now consider seeing a doctor to see what they do.”
These studies (which includes scanning the 2010 Census to determine in which areas people speak English less than “very well” in order to staff bilingual personnel...why not let the eligible facilities tell you what languages they see most often?) will only cost you $16 million. A year.
§1221 (1): My God. They actually have to define “bilingual” for us?
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At this point, we are clearly seeing patterns. Various, established programs are being ripped apart to include more services, but lack explanations as to how these services will reduce costs or reduce the number of Americans without healthcare. This just reeks of window dressing, with details grabbed from wherever they could find them.
Say, here’s a thought. Someone keeps saying there are 47 million Americans without healthcare coverage. How about this: find out who they are. The census folks should be getting this data in another few months anyway when they gather no-speak-English-very-well data.
Then simply do what the Mandarin suggests: buy them their own policy. The Mandarin computes that you can handle this for less than $25 billion a year! Do this each year. And be done with this. Everybody wins, even the President. If he’s honest about his motives.
Yeah, IF! |
