Originally Posted Nov. 16, 2010
Modified and Reposted June 25, 2012 prior to SCOTUS Ruling
Are we really willing, as a country, to assign a higher value to tax cuts for the wealthiest during economically difficult times than preventing the unnecessary loss of tens of thousands of American lives each year?
Since taking back the House in 2010, the Republican leadership has declared two priorities; extending the Bush tax cuts to all income classes including the wealthiest and repealing the healthcare law (or at least impeding its implementation through funding denial in the near term while seeking to oust the president) (ref). Extending tax cuts to the wealthiest, the class who least needs the benefit during these difficult economic times, would be funded by borrowing money at a time when the public is demanding deficit reduction. The healthcare law is projected to reduce deficits and prevents the loss of tens of thousands of American lives each year due to lack of access to essential care.
The simultaneous declaration of these two priorities raises a serious moral issue not only for the Republican Party, but for our country as well. Without reasonable justification, a higher value is being assigned to providing benefits for the wealthiest than preventing the unnecessary loss of American lives. This is no small matter. It defines our values and is a statement of our national conscience. It should be a concern to every American, regardless of party affiliation.
The Healthcare Law
Difficult to Explain, Therefore Easy to Spin
What the law does is complicated, basically because our healthcare system is, and its benefits do not fit nicely on a bumper sticker as Peter Orszag has said. For that reason the law is easy prey for spin and distortion.
Death panels, a soundbite scare tactic, never existed in the legislation and in fact won Politifact’s 2009 Lie of the Year award (ref). An argument could be made, however, that such panels existed in the healthcare system prior to reform as coverage could be denied or pulled from those who needed it, and citizens as they grew older could be forced to either cut back on benefits or get priced out of the market due to escalating premiums. Additionally the claim that the law constituted ‘a government takeover of health care’ was similarly awarded PolitiFact’s 2010 Lie of the Year (ref); the law Congress passed relies largely on the free market.
The fears that the law cuts back on the amount of medical care seniors will receive on Medicare is spin on one of its cost containment measures that targets key drivers of expense, such as chronic conditions, and rewards quality of practice over quantity. The law imposes penalties on the 25% of hospitals whose rates of ‘hospital acquired conditions’ like bed sores, nosocomial infections, complications from extended use of catheters, and injuries caused by falls are the highest (ref). This initiative will ultimately reduce cost and improve the overall quality of care in hospitals.
The law also recognizes that reform is not a one time affair but rather an evolving process, as it should be for something as complicated as this, and an Innovation Center has been created to continually explore new strategies. For those who wish to be better informed in the face of much political maneuvering, I provide links to articles that summarize the law and how it works (ref) (ref) (ref).
Two reasons being used in support of repealing the law are cost and the individual mandate. Both are addressed below.
The Healthcare Law Saves Money While Expanding Coverage
One element of spin, and thus public concern, has been cost. Senate minority leader, Mitch McConnell, has even used the phrase, ‘health spending bill’ to frame the law (ref). And the spin has been effective as a poll published in April 2010 showed that 60% of America believes the healthcare law would increase deficits (ref), a key concern for voters this past election whose confidence in the law has been eroded. Fact is, the law saves money.
The non-partisan referee in this debate, the Congressional Budget Office (CBO), has published that the healthcare law will reduce our deficit by $138 billion in its first 10 years and, although more difficult to estimate, by perhaps as much as $1.2 trillion in the second ten years (ref). Additionally, in an August 24, 2010 letter issued to Senator Mike Crapo (R-ID), ranking member of the Senate Finance Subcommittee on Healthcare, CBO estimates that repealing the healthcare law would increase the deficit by $455 billion over the next 10 years (ref).
Peter Orszag, director of White House Office of Management and Budget (OMB) from 2009-2010, is also on record that the health care law “would cut the nation’s long-term fiscal imbalance by a quarter and reduce the projected deficit with Medicare by three-quarters…as long as Congress sticks to its guns and the Obama administration does a good job carrying out the provisions of the law” (ref).
All political posturing aside, both CBO and OMB project that the healthcare law will reduce deficits over the next 20 years while expanding coverage to over 30 million previously uninsured Americans (ref), including 15 million women who are currently uninsured and another 14.5 million women who will benefit from the improved coverage or reduced premiums under the law (ref).
However, if cost saving measures of this law go unfunded, as has been threatened, such a tactic could derail the benefit at the expense of driving up our deficits.
The Mandate Has Been a Republican Idea
One of the key Republican objections to the law is the individual mandate that has been positioned as being unconstitutional and an infringement on individual liberties. An interesting tactic since the individual mandate actually started as a Republican idea (ref). Conservatives who now oppose the individual mandate as part of the healthcare law were not long ago proposing it (ref). Republicans, including John McCain, Tommy Thompson, Mitt Romney, Bill Frist, Orrin Hatch, Charles Grassley, Robert Bennett, and Chris Bond have all been cited as supporting this concept in the past.
In a September 28, 2009 article published in US News and World Report entitled ‘An Individual Mandate for Health Insurance Would Benefit All” (ref), Bill Frist, (a Tennessee Republican, a heart surgeon, and former US Senate majority leader) made the case for the necessity of a public mandate on a national level, although beginning in a more limited manner with catastrophic coverage, on three issues: fairness, elimination of wasteful cost shifting, and reducing adverse selection including the problem of ‘free riders’ and the ‘voluntarily uninsured’ who do not purchase insurance but pass the cost of their emergency room care onto other policy holders. All good points.
The Massachusetts Health Care Insurance Reform Law, enacted in 2006 by then Governor Mitt Romney, currently the Republican presidential candidate, includes tax penalties for those who fail to obtain an insurance plan (ref). We have the opportunity to learn from this prototype of our current law and improve upon it. With both the ‘public option’ and buy-in to Medicare down to age 55 taken off the table during the Senate debate, the mandate was a concept that actually had some level of appeal on both sides of the aisle.
And in our country there is an ethical mandate to treat. A team of emergency physicians would never deny treatment to a patient in a life threatening situation, policy holder or not. As individuals would not be denied treatment, a mandate to contribute to the healthcare system would seem reasonable as well as an investment in an individual’s own and family’s future needs.
On October 7th 2010, a Michigan Judge threw out a challenge to the healthcare law’s individual mandate that was argued to be “an unprecedented encroachment on the liberty” of US citizens (ref).
As with any large and complicated program it is not possible to get a 100% perfect plan in place up front and the road forward is never without challenges. A saying I used in business is a play on a Voltaire quote: perfection is the enemy of completion. Once a plan has been debated and put into place, problem solving during its execution is an integral part of success. I have had to do this many times in overseeing complex long-term projects, some being international, during my career. Teams lacking commitment fail; committed teams make wondrous things happen. If we approach the improvement of our healthcare system as a process, as we have our Constitution through amendment, a more perfect system will be achieved.
Tens of Thousands of American Lives are Lost Each Year Due To a Lack of Coverage
A study published out of Harvard Medical School in 2009 revealed the obvious; that access to essential care saves lives (ref) (ref). The study estimated that up to 45,000 American citizens are dying each year because they are uninsured. That toll was greater than the number of people who die each year from kidney disease. Those without health insurance had a 40% higher risk of death than those with private health insurance. That risk was increased from a previous study in 1993 where those without insurance had a 25% greater chance of dying – the increase likely attributable to public hospitals having closed or cut back on services and improved medical care for people with chronic treatable conditions.
A second study (ref) published in 2009 revealed 1.46 million working age military veterans lacked health coverage that resulted in an estimated 2,200 of them losing their lives, six of them every day (ref). That number of deaths was, at the time, more than 14 times the number of deaths (155) suffered by US troops in Afghanistan in 2008, and more than twice as many that died (911) since the war started in 2001.
Bottom line, lack of insurance coverage is claiming tens of thousands of US lives each year, including our working age vets.
Tax Cut Policy Heavily Favoring the Wealthiest Did Not Live Up to its Promise of Paying for Itself
Supply-side tax cut policy, with the benefit heavily weighted to wealthiest, has simply not lived up to its promise to pay for itself by stimulating the economy and job creation but has substantially driven up our national debt.
There is no evidence that the policy stimulated GDP growth and it actually underperformed periods where progressive tax policy was in place regarding both job creation and real non-residential investment. US capital investment, the supposed benefit of the tax cuts, during the GW Bush years was the lowest in the post WWII era. The policy failed as there is no control over where the wealthy and corporations deploy their capital; it leaked abroad into high growth emerging markets following 2001, sometimes back to where we borrowed from to support the benefit. Good for the wealthy, ‘Wall Street’ and foreign economies; but not so good for America and our future generations who inherit the debt from this exercise. To avoid redundancy, I refer you to articles I written on this topic that provide detail of the above points and more (ref) (ref) (ref).
During these economically difficult times, the defense of extending the tax cuts to the wealthiest should be supported by specific evidence of benefit, and that has not been done. And Republican lawmakers have even opposed compromises, such as letting the tax cuts expire only for those individuals with taxable income exceeding $1 million. And this is where special interest monies become a concern as it had been reported that a small circle of extremely wealthy Wall Street hedge fund and private equity moguls contributed a substantial portion of Crossroads GPS’ money; donors who bitterly opposed tax increases on compensation that hedge funds pay their partners (ref).
The pursuit of borrowing money to support tax cuts for the wealthiest while at the same time seeking to repeal law that prevents the unnecessary loss of tens of thousands of American lives each year and reduces deficits presents a morally untenable position for both the Republican Party and our country. The message this agenda sends is a reflection of our national conscience and values. It is a reflection of values that I believe no American should be proud.
Our citizens are required by law to pay taxes to not only support our national agenda (including by far the largest military budget in the world – ref) but the government run benefits programs of our legislators as well (ref). Our vets put their lives on the line for this country. But if these contributing citizens and working age vets develop serious health problems and do not have the means or are denied coverage, the result can be bankruptcy or death, and indeed thousands are dying each year. No other Western industrialized democracy permits this to happen.
When we assign a higher value to extending benefits to the wealthiest than preventing the unnecessary loss of American lives, we should all, regardless of party affiliation, pause and take a hard look at what that agenda says about our values.