Obama's Town Hall in Portsmouth-- Health Care Theater and Deception Pt.2: The HBAC-- Obama's NHS

The argument has been made that Britain's socialized health care is not a fair comparison to what's currently proposed. That's actually a pretty hard to address as the House's draft bill is 1018 pages long, the entirety of which must read, understood, and then be put into the context of economic reality, even though it is not written from that perspective. It's a daunting feat that some in Congress (as Rep. John Conyers video here) seem to freely admit that they're not up to.

However, Senator Tom Coburn (R) has written that "[b]oth the Senate and House bills set up a government-run 'comparative effectiveness' board that will make final decisions about treatment and care. In committee, I gave senators several opportunities to accept language that would forbid this board from denying care. All of my amendments were rejected, which suggests that the intent is to set up a board that will ration care, as is done in the United Kingdom."

As I have said in part one of this post, there is language in the bill that clearly sets up a government-run "comparative effectiveness" board called the Health Benefits Advisory Committee (HBAC). This is on page 30, section 123. HBAC is endowed with powers not dissimilar from the powers that Britain's National Health Services (NHS) exercises in the UK. What's more, although it seems a bit vague and convoluted, the HBAC would set standards not just for the public option, but for private insurers as well.

The structure of the HBAC itself should be enough to give most people pause. The board shall be chaired by the Surgeon General (a presidential appointee confirmed by Congress) and populated by 20 to 26 additional members. 9 of these members will be directly appointed by the president and may not be federal employees, and an additional 2-8 (even numbers only) are appointed by the president who may be federal employees. Another 9 members would be appointed by the Comptroller General of the United States (the head of the GAO and also a presidential appointee confirmed by Congress). In other words, once instituted Obama will directly appoint 17 members of the board (not including the Surgeon General) to stack against 9 appointees selected by another presidential appointee [The current Comptroller is Eugene Louis Dodaro an interim who is officially an Acting Comptroller General and will serve until another Comptroller is nominated by the president].

In other words, the initial HBAC will be stacked with Obama appointees (a minimum number of 12 and a maximum of 18 in a board of 21-27). The additional 9 members could very well be appointed by another Obama appointee if Dodaro is replaced before the passage of the bill.

What is the function of the HBAC? According to the language of the bill itself (pg. 32) "The Health Benefits Advisory Committee shall recommend to the Secretary of Health and Human Services [...] benefit standards [...], and periodic updates to such standards." In other words, they will determine what is covered and not covered by the government health plan. Not at all like the UK's NHS... right? Okay, granted they will "recommend" benefit standards to the Secretary of Health and Human Service, but what are the odds that Kathleen Sebelius won't take a recommendation from a board made up almost exclusively of Obama appointees?

So what can you expect from the HBAC? Since they're going to be Obama appointees, I would go out on a limb here and suggest that you can expect pretty much what Obama wants.

And what does Obama want? Well, though he denies it, Obama said in 2003 that he wants single-payer health insurance (video here). His words "... how do we get the federal government to take care of its business? I happen to be a proponent of single payer universal health care program." Obama can't get much clearer than that. And if he denies it now, as he seems to do, he is either lying now, lying then, or has inexplicably changed his mind and will not explain nor even acknowledge it.

Additionally the Organizing for America (OFA) website confirms this in, rather amusingly, their Fact Check section.

"Rhetoric: 'Today, he [Obama] opposes single payer health care, and attacks Sen. Clinton for proposing a plan that covers everyone'

"Reality: Obama Has Consistently Said That If We Were Starting From Scratch, He Would Support A Single Payer System, But Now We Need To Build On The System We Have."

A few paragraphs down: "If Obama Were Starting From Scratch, He Would Support A Single Payer System. Obama said, 'Here's the bottom line. If I were designing a system from scratch I would probably set up a single-payer system...But we're not designing a system from scratch...And when we had a healthcare forum before I set up my healthcare plan here in Iowa there was a lot of resistance to a single-payer system. So what I believe is we should set up a series of choices....Over time it may be that we end up transitioning to such a system. For now, I just want to make sure every American is covered...I don't want to wait for that perfect system...'[emphasis mine]."

So just to recap, the House bill establishes the HBAC, a board the majority of which are handpicked by the president, whose duties are to determine what is covered and not covered by the federal government's health insurance plan. Obama himself has admitted he is a proponent of a single-payer health plan. Do you think he will appoint people who are not? Do you think that they will not structure an expensive (in tax dollars), but initially attractive plan to best bring about a single-payer system in the short-term? It would be good to remember that Britain's NHS was "the envy of Europe" after its initial inception.

During the Portsmouth town hall Obama goes on to suggest that private health care providers can compete with government insurance (video here & transcript of Portsmouth Town Hall here). He uses the UPS and FedEx as examples of private companies successfully competing against the federal government. His words: "'Now, I recognize, though, you make a legitimate -- you raise a legitimate concern. People say, well, how can a private company compete against the government? And my answer is that if the private insurance companies are providing a good bargain, and if the public option has to be self-sustaining -- meaning taxpayers aren't subsidizing it, but it has to run on charging premiums and providing good services and a good network of doctors, just like any other private insurer would do -- then I think private insurers should be able to compete. They do it all the time.' (Applause.)

"I mean, if you think about -- if you think about it, UPS and FedEx are doing just fine, right? No, they are. It's the Post Office that's always having problems."

Well, aside from the perhaps inadvertent suggestion that government entities such as the Post Office are in financial trouble (they are... the Post Office stands to lose $7 billion this year), this comparison is absolute nonsense. The federal government does not regulate mail to nearly the same extent that it regulates the health industry even currently, nor is the Post Office propped up by a fervent public demand (as a government run health insurance plan surely would be). Rory Cooper at the The Foundry asks an interesting question. "If Americans were offered 'free' postage paid for by massive government spending and tax hikes, would Fedex and UPS still exist?" Not likely.

But private insurance groups will not be competing against the Post Office. They will be competing against the federal government and the public health plan currently being constructed from the House bill -- and that bill tilts the table heavily in favor of the public option.

As I stated before, it appears that the HBAC would be able to set standards that private insurance providers must abide by (stacking the deck with over-regulation don't you think?).

Additionally:

Businesses that currently provide private health insurance would be taxed which would encourage them to take up the public option-- I mean they're paying for it anyway... (page 149): "A contribution [tax] is made in accordance with this section with respect to an employee if such contribution is equal to an amount equal to 8 percent of the average wages paid by the employer during the period of enrollment (determined by taking into account all employees of the employer and in such manner as the Commissioner provides, including rules providing for the appropriate aggregation of related employers). Any such contribution (1) shall be paid to the Health Choices Commissioner for deposit into the Health Insurance Exchange Trust Fund, and (2) shall be applied against the premium of the employee under the Exchange-participating health benefits plan in which the employer is enrolled."

An excise tax would be levied against all goods from businesses who do not offer health insurance in accordance to government (HBAC?) mandates (page 110): "Excise tax on failures to meet certain health coverage requirements--"

People who opt out of health insurance would be taxed (page 167): "TAX IMPOSED.—In the case of any individual who does not meet the requirements of subsection (d) at any time during the taxable year, there is hereby imposed a tax equal to 2.5 percent (1) the taxpayer's modified adjusted gross income for the taxable year over (2) the amount of gross income specified in the section 6012(a) (1) with respect to the taxpayer."

No company nor individual may sue for price regulation, i.e. a government monopoly's price fixing (page 124): "There shall be no administrative nor judicial review of a payment rate or methodology established under this section or under section 224."

The Treasury will cover costs of the public option (page 110): "Appropriations to cover government contributions-- There are hereby appropriated, out of the moneys in the Treasury not otherwise appropriated, to the Trust Fund, an amount equivalent to the to the amount of payments made from the Trust Fund under subsection (b) plus such amounts as are necessary reduced by the amounts deposited under paragraph (1)."

So in summary, Obama suggests that a private company should be able to compete with a public option which is: a) already forcibly paid for by its potential customers whether they want it or not, b) sets the regulations for standards of care (what is and what is not covered) and controls the size of the payments for medical services, and c) is subsidized through government money (taxes) and will not be allowed to fold. Yeah... That's an even playing field...

No. The point of this bill seems to be two-fold. First, to impose strict government regulation on the medical industry and private insurance providers (fundamentally telling them how to run their businesses and most likely driving them to insolvency or just straight out of business). Secondly to impose a government standard of health insurance on all individuals. Being sustainable or affordable does not seem to be a priority in this bill, neither is allowing for an individual's choosing of their own health care.

So when Obama trumpets his famous words (video here), as he did at the AARP-- who have not endorsed the reform, despite Obama's claim-- "If you have insurance that you like, you will be able to keep that insurance. If you've got a doctor that you like, you will be able to keep your doctor. Nobody is trying to change what works in the system. We are trying to change what doesn't work in the system." Obama's lying. He can't possibly make that assurance. At best, Obama would have absolutely no idea whatsoever if your current insurance and their doctor can remain viable in this new and highly regulated environment. At worst, Obama knows the intent of this bill, to impose NHS style health care, and he is simply lying about it.

More in Part 3 UPDATE: My next long post will also be on health care, but will most likely not be about the Portsmouth Townhall.