The Doctors of the House
A landmark of liberal governance whose price will be very steep.
House Democrats last night passed President Obama's federal takeover of the U.S. health-care system, and the ticker tape media parade is already underway. So this hour of liberal political victory is a good time to adapt the "Pottery Barn" rule that Colin Powell once invoked on Iraq: You break it, you own it.
This week's votes don't end our health-care debates. By making medical care a subsidiary of Washington, they guarantee such debates will never end. And by ramming the vote through Congress on a narrow partisan majority, and against so much popular opposition, Democrats have taken responsibility for what comes next—to insurance premiums, government spending, doctor shortages and the quality of care. They are now the rulers of American medicine.
Mr. Obama and the Democrats have sold this takeover by promising that multiple benefits will follow: huge new subsidies for the middle class; lower insurance premiums for consumers, especially those in the individual market; vast reductions in the federal budget deficit and in overall health-care spending; a more competitive U.S. economy as business health-care costs decline; no reductions in Medicare benefits; and above all, in Mr. Obama's words, that "if you like your health-care plan, you keep your health-care plan."
We think all of this except the subsidies will turn out to be illusory, as most of the American public seems intuitively to understand. As recently as Friday, Caterpillar Inc. announced that ObamaCare will increase its health-care costs by $100 million in the first year alone, due to a stray provision about the tax treatment of retiree benefits. This will not be the only such unhappy surprise.
While the subsidies don't start until 2014, many of the new taxes and insurance mandates will take effect within six months. The first result will be turmoil in the insurance industry, as small insurers in particular find it impossible to make money under the new rules. A wave of consolidation is likely, and so are higher premiums as insurers absorb the cost of new benefits and the mandate to take all comers.
Liberals will try to blame insurers once again, but the public shouldn't be fooled. WellPoint, Aetna and the rest are from now on going to be public utilities, essentially creatures of Congress and the Health and Human Services Department. When prices rise and quality and choice suffer, the fault will lie with ObamaCare.
While liberal Democrats are fulfilling their dream of a cradle-to-grave entitlement, their swing-district colleagues will pay the electoral price. Those on the fence fell in line out of party loyalty or in response to some bribe, and to show the party could govern. But even then Speaker Nancy Pelosi could only get 85% of her caucus and had to make promises that are sure to prove ephemeral.
Most prominently, she won over Michigan's Bart Stupak and other anti-abortion Democrats with an executive order from Mr. Obama that will supposedly prevent public funds from subsidizing abortions. The wording of the order seems to do nothing more than the language of the Senate bill that Mr. Stupak had previously said he couldn't support, and of course such an order can be revoked whenever it is politically convenient to do so.
We have never understood why pro-lifers consider abortion funding more morally significant than the rationing of care for cancer patients or at the end of life that will inevitably result from this bill. But in any case Democratic pro-lifers sold themselves for a song, as they usually do.
Then there are the self-styled "deficit hawks" like Jim Cooper of Tennessee. These alleged scourges of government debt faced the most important fiscal vote of their careers and chose to endorse a new multitrillion-dollar entitlement. They did so knowing that the White House has already promised to restore some $250 billion in reimbursement cuts for doctors that were included in yesterday's bill to make the deficit numbers look good. Watch for these Democrats to pivot immediately and again demand "tough choices" on spending—and especially tax increases—but this vote has squandered whatever credibility they had left.
Mrs. Pelosi did at least abandon, albeit under pressure, the "deem and pass" strategy that would have passed the legislation without a vote on the actual Senate language. We and many others criticized that ruse early last week, and the House decision to drop it exposes the likes of Norman Ornstein of the American Enterprise Institute and other analysts who are always willing to defend the indefensible when Democrats are doing it.
All of this means the Senate's Christmas Eve bill is ready for Mr. Obama's signature, though only because rank-and-file House Members also passed a bill of amendments that will now go back to the Senate under "reconciliation" rules that require only 50 votes. Those amendments almost certainly contravene the plain rules of reconciliation, and the goal for Senate Republicans should be to defeat this second "fix-it" bill. It's notable that Democrats didn't show yesterday for a meeting with the Senate parliamentarian to consider GOP challenges, no doubt because they fear some of them might be upheld.
Though it's hard to believe, the original Senate bill is marginally less harmful than the "fixed" version, not least because the middle-class insurance subsidies are less costly and it would avert the giant new payroll tax. That's the White House increase in the Medicare portion of the payroll tax to 3.8% that Democrats cooked up at the last minute and would apply to the investment income of taxpayers making more than $200,000.
If the reconciliation bill goes down, Big Labor and its Democratic clients would be forced to swallow a larger excise tax on high-cost insurance plans, and it would also forestall the private student-loan takeover that Democrats included as a sweetener. In other words, they'd be forced to eat the sausage they themselves made as they have abused Congressional procedure to push ObamaCare into law.
We also can't mark this day without noting that it couldn't have happened without the complicity of America's biggest health-care lobbies, including Big Pharma, the American Medical Association, the American Hospital Association, the Federation of American Hospitals, the Business Roundtable and such individual companies as Wal-Mart. They hope to get more customers, or to reduce their own costs, but in the end they have merely made themselves more vulnerable to the gilded clutches of the political class.
While the passage of ObamaCare marks a liberal triumph, its impact will play out over many years. We fought this bill so vigorously because we have studied government health care in other countries, and the results include much higher taxes, slower economic growth and worse medical care. As for the politics, the first verdict arrives in November.
