Health Care's Final Countdown Begins

The President gave what one can only hope is his truly-and-really-for-real-this-time-not-gonna-happen-again final pitch for health care reform this afternoon, framing his latest proposal—which amounts to a House/Senate plan casserole with a little bit of GOP flavor sprinkled on top—as a bid to reign in abusive, out of control insurance companies. Contrary to rumors that circulated earlier in the week, the speech did not back down from existing plans or substitute a smaller proposal. In some ways, I think it was his best pitch yet—a strong call to let the good folks in government have a little more power to oversee the insurance industry and protect consumers. But as usual, Obama's speech was packed with misleading statements about how he hopes to accomplish this feat.

For starters, he pitched his plan as a middle way between single payer and a more market-friendly approach like Congressman Paul Ryan's. That's true enough, but to drive this point home, he declared, "I don't believe we should give government bureaucrats or insurance company bureaucrats more control over health care in America."

The thing is, his plan would do both. On one hand, the individual mandate would put more people on the rolls of private insurance companies. And on the other hand, it would corral insurance companies into highly-regulated, government run "exchanges," leading to what Philip Klein has called "government designed insurance policies in a government store."

He also repeated the line, "If you like your plan, you can keep your plan.  If you like your doctor, you can keep your doctor." He's been saying this since the beginning of the debate; it wasn't true last summer, and it's not true now.

And then there was this:

And my proposal says that if you still can't afford the insurance in this new marketplace, even though it's going to provide better deals for people than they can get right now in the individual marketplace, then we'll offer you tax credits to do so—tax credits that add up to the largest middle-class tax cut for health care in history.

There a

re two big problems with this. The first is that, at least according to the Congressional Budget Office figures he references later, his proposal doesn't actually provide "better deals" in the individual market, at least not before the subsidies kick in. Instead, it raises premium prices somewhere between 10 and 13 percent. A little more than half of those in the individual market would pay less than they otherwise would, but only because of so-called "tax credits"—otherwise known as taxpayer-funded subsidies. The second is that calling this plan a tax cut is a real stretch; sure, it would dole out a hefty chunk of subsidies for individuals to buy private insurance with, but it would also impose an individual mandate to buy health insurance, a requirement which, according to an estimate by Cato's Michael Cannon, would add a total of more than $1 trillion to the overall cost of the bill. 

On the other hand, at least it's almost over. (Maybe!)