It has been reported widely that the version of health care legislation passed by the Senate (HR 3590, as amended) includes provisions that would prevent a future Congress from changing or repealing it.
A careful review of the bill shows that these reports are incorrect.
We've delayed publishing analysis of the Senate's health care bill until a version could garner 60 votes, and thus survive a cloture vote to cut off debate. That bill is Majority Leader Reid's manager's amendment to HR 3590.
In its debate over health care legislation, the Senate and the Obama administration must contend with conflicting forces and incentives. There appears to be a political consensus among supporters that "guaranteed issue" and "community rating" are essential features of any bill. ("Guaranteed issue" means people cannot be denied coverage no matter how risky they are. "Community rating" means people with low health risks have to subsidize them.)
As we have noted several times now, keeping these features requires that everyone have health insurance. This means people with low health risks must be compelled to buy (and pay too much for) health insurance.
Proposed health care legislation includes both employer mandates and an "individual mandate." Anyone not covered by employer-provided health insurance would be required by law to buy a qualifying health insurance plan or pay a tax.
An interesting debate has arisen concerning whether Congress has authority under the Constitution to require individuals to purchase health insurance. David B. Rivkin Jr. and Lee A. Casey are perhaps the most prominent opponents:
[C]an Congress require every American to buy health insurance?
In short, no. The Constitution assigns only limited, enumerated powers to Congress and none, including the power to regulate interstate commerce or to impose taxes, would support a federal mandate requiring anyone who is otherwise without health insurance to buy it.
Washington Post columnist Ruth Marcus recently defended the proposition that such a law would pass constitutional muster.
Estimates of the social costs and benefits of health care legislation are hard to find. The Congressional Budget Office estimates federal budget revenues and receipts, and while it is supposed to estimate non-federal costs, it generally does not do so.
The Kaiser Family Foundation has a calculator that tells you how much taxpayers would subsidize your health insurance if your employer did not provide it, and thus you had to purchase it yourself (the "individual mandate").
This calculator provides some very interesting insights about the House and Senate health care bills. Most strikingly, it's possible that a majority of Americans would receive large taxpayer subsidies.
Recently we have posted on the so-called "public option" (see here and here). Today we look at the effect of proposed health care legislation on the private market.
By necessity, it is private insurers that have both the interest and comparative advantage to estimate these effects. The federal government, and especially the Congressional Budget Office, is almost exclusively concerned with federal budget outlays, not social costs and benefits. To keep federal outlays down, legislators focus on shifting costs off budget -- typically, onto private insurers and their customers.
Analyses recently made public by one private insurer are instructive.
It's in the House Energy and Commerce Committee bill, which the Speaker has not brought to the floor for a vote because it lacks enough votes to pass. It's in the Senate Health, Education, Labor and Pensions bill. It was in the Senate Finance Committee bill, then it was removed to secure one Republican vote. As the Senate leadership tries to merge these competing bills, news stories say that it's back in. Or back out. Or back in under certain conditions.
Economic incentive schemes are popular among economists and increasingly embraced by legislators. Cap-and-trade to control greenhouse gas emissions is perhaps the most visible of these incentive schemes. Pigouvian taxes are the other, and news today from an unexpected source provides useful and interesting lessons in how such taxes can work -- and how they can degenerate into plain vanilla taxes.
Today the House Democratic leadership released a discussion draft (HTML, downloaded PDF) of its 1,018-page proposed health care bill.
The House Republican leadership has released a chart that they say diagrams the Democratic plan. The House Republican alternative is HR 2520, titled "The Patients' Choice Act," summarized by its proponents here in 13 pages,
Major changes in the regulatory landscape often require serendipitous, attention-grabbing events to push them over the top. These events must be perceived to be related to the cause at hand, but no actual scientific relationship needs to exist. What matters is perception.
Right now, it seems highly unlikely that such an event will occur this year to push cap and trade over the top.
The Obama Administration's "cap and trade" bill to regulate greenhouse gas emissions (HR 2454, Waxman-Markey) has moved to the Senate, where the leadership hopes to have a bill ready to bring to the floor by September. The Washington Post reports that the bill is 15 to 20 votes short.
The House leadership plans to amend Waxman-Markey to impose trade sanctions on countries that do not reduce greenhouse gas emissions. International adherence to effective restrictions is essential for the bill to have any effect on global emissions. However, trade sanctions would have the effect of significantly reducing international trade and protect energy-sensitive US industries and their workers from foreign competition. This amendment would compel other nations (chiefly China) to adhere to US emission standards if they want to continue exporting to the US. These nations likely would interpret such demands as trade restrictions impermissible under existing WTO agreements.
Debates about universal health care inevitably lead to comparisons, such as with Canada and the United Kingdom in large part because there are no language barriers making the experiences of other nations hard to gather and analyze. Typical observations from these systems include the various non-price means by which health care is rationed. For example, care can be rationed by forcing patients to wait. Some will decide that waiting is too burdensome and choose not to seek care. Some will seek health care outside of the system; Canadians can obtain care in the United States rather than wait, as long as they are willing and able to pay for it. Inevitably,some patients will die before they can receive care, and these patients will tend to be poorer than average.
The UK also rations care by authorizing a government agency (the National Institute for Health and Clinical Excellence, or NICE) to make eligibility decisions -- that is, they will decide by rule, formula, or other criteria who is eligible to receive expensive services and who will not. For example, on June 24, 2009, NICE published guidance concerning percutaneous endoscopic laser cervical discectomy, a less invasive technique for remedying certain spinal problems. The NICE guidance generally restricts access, which is available in the United States as an outpatient procedure and for which there are published peer reviewed reports of success.
Recently published peer reviewed research offers very interesting insights about how universal health care has performed in Japan. This study is interesting because Japan has succeeded in providing universal coverage and it has limited health care expenditures to about half of the GDP fraction of the US. How did Japan accomplish this?
