The AMA: Politicians promise not to cut Medicare’s reimbursement rates to doctors.  Do they really believe politcians’ promises?

For more on the AMA, see: Who Does the AMA Really Represent?

The AARP:  It sells Medi-Gap insurance, which covers what traditional Medicare does not.  Yet, Medicare Advantage, a way for those eligible for Medicare to buy a product from a private insurer, offers an alternative to this.  The House Bill cuts payments to Medicare Advantage plans.

Insurance companies: HR 3962 makes it a crime not to buy their products.

(via FIRM)

The Wall Street Journal also reports:

The director of the Centers for Disease Control and Prevention urged health officials around the country Thursday to ensure swine-flu vaccine is getting to high-risk groups, after criticism erupted over distribution to some Wall Street firms.

For an excellent post on government control of vaccines and the shortages it creates, see: Vaccine “Public Option Plan” Has Produced Shortages of Vaccines.

(Via Patients First)

With H1N1 flu vaccine shortages looming, now is a good time to reflect on the health care shortages, lack of innovation, and outflow of capital created when a public option health plan transfers too much power from the private sector to the government.

In 1993, the Clinton Administration created the Vaccines for Children (VFC) program. Its goal was to eliminate out-of-pocket payments for vaccines, much like ObamaCare seeks to eliminate out-of-pocket payments for health care.

Then as now, the President implied that profiteering providers made health care too expensive. According to President Clinton, vaccine manufacturers were “pursuing profits at the expense of our children” He publicly condemned a “shocking” rise in the price of vaccines for children, suggesting, according to a March 15, 1993 New York Times article, that the rise was “in part due to the pharmaceutical industry’s huge promotional budget.” Dr. Alan R. Hinman, then the director of prevention services at CDC, agreed. He reportedly said that “we have very little bargaining power” when there is only one manufacturer.

At the time, vaccine cost was said to be a major reason why children in the United States were not adequately immunized. Even though most of the children who were not immunized were already eligible for free immunizations through already existing public programs, Clinton went ahead and created the VFC as a public option to compete with private providers of immunization services.

Rather than issue vouchers directly to patients, the designers of the VFC elected to put government squarely in the middle of the process. The government was to purchase vaccines from manufacturers. Physicians and clinics would apply to the government for vaccines, and it would distribute them as needed.

The federal government was ill-prepared to manage something as complex as vaccine distribution. A 1995 GAO report noted that the program suffered from poor record keeping, poor management, and an inability to detect fraud. While there was no evidence to show that the VFC had increased immunization rates, the GAO did note that it had managed to negotiate a contract for oral polio vaccine. But because the price the VFC demanded was so low, the manufacturer had limited the purchase to a number of doses that was less than the estimated country-wide needs.

The architects of the VFC program were so concerned about using government power to bludgeon manufacturers into low, low, vaccine prices that the original legislation even put price controls on the three vaccines for children that were in use when the legislation was enacted.

By 2002, VFC purchases amounted to 41 percent of the vaccine market. [For more on the vaccine market, see the 2009 NCPA Brief Analysis #655.] Unfortunately, the price caps were so low that no vender would bid on the contract and the tetanus vaccine was removed from the VFC program in 1998.

Had CDC been a business responsive to its customers, the lack of bids would likely have impelled it to revise its price offer. Instead, the government simply stopped providing tetanus boosters for VFC children. Between late 2000 and the spring of 2003, the US had vaccine shortages for 8 of the 11 preventable pediatric diseases before the Bush administration finally addressed the issue.

The focus on using government purchasing power to bludgeon manufacturers has eroded profit margins and destabilized long term vaccine supplies. Alex Tabarrok, writing in an October 14, 2004 post on the Marginal Revolution blog, noted that the federal government “uses its monopsony power and the law to require companies to sell at low prices. Firms have left the industry because they are squeezed on one end by regulation and on the other by low prices.”

After studying the shortages, the National Vaccine Advisory Committee made the following recommendations in a 2003 report:

1. Provide more funding for government created vaccine stockpiles.
2. Provide more funding for FDA regulators.
3. Create a communications program to make it clear that the federal government has the power to prioritize vaccine development and distribution.
4. Strengthen the Vaccine Injury Compensation Program.
5. Require vaccine manufacturers to provide advance notice when then intend to leave the market.
6. Provide the public with a website about current vaccine availability.
7. Initiate a national campaign to emphasize the “safety and efficacy and great benefit of recommended vaccines for the public good.”

As even government officials could see that none of those recommendations would do anything to increase the actual vaccine supply, the Committee also noted that someone should “convene a multi-disciplinary group to evaluate the nature of appropriate incentives for manufacturers,” and to “streamline and strengthen the regulatory processes and activities of the FDA.”

The call for more stockpile funding ignored the financial problems for vaccine manufacturers that had been created a 1999 Clinton administration SEC policy. As explained by the Wall Street Journal on October 21, 2005, the policy prevented vaccine manufacturers from recognizing vaccine revenue until the vaccine was actually delivered to physicians. So, no matter how much cash the government gave to vaccine manufacturers, they could not “include this money in their official sales until it [was] actually delivered to doctors when and if there [was] a disease outbreak.” This regulation was specifically cited by vaccine maker Aventis when it dropped out of the children’s vaccine stockpile in 2004.

As one would expect, manufacturers left the increasingly hostile vaccine manufacturing environment. In 2003, the Institute of Medicine reported that the number of vaccine producers licensed for the U.S. market had fallen from 26 in 1967 to 4 in 2002. Factors cited for the decline included more stringent regulation, concerns about tort liability, and “poor returns on investment” that were, informed observers contend, a result of regulatory fecklessness and the misuse of the VCP pricing power.

That American citizens should be fined or even put in federal prison for refusing to purchase government-approved health insurance is as un-American as any idea we can imagine. But such a mandate is the very heart of the bill written behind closed doors by House Speaker Nancy Pelosi and her privileged pals. If their bill is approved by the House tomorrow, we will be a big step closer to the day when everybody gets their health care insurance through the government or from an approved insurer offering policies that meet meticulously detailed specifications contained in thousands of pages of federal regulations.

Welcome to America, land of the formerly free, and home of citizens covered by a nationalized health care system crafted by the same government that can’t care for American Indians on their reservations or deliver swine flu shots on time.

Read the whole article: Health care by coercive government.

(via FIRM)

Should government force you to pay more for medical insurance so others can pay less?  Dr. Laura Rosenthal thinks so, calling it “compassion and kindness.” It’s more like charity at gunpoint.

In a recent Camera article, Rosenthal advocated making it “illegal for health insurance companies to discriminate on the basis of pre-existing conditions.” That is, insurers must sell policies to everyone at the same price.

These mandates have dire consequences, including more people without insurance. “Individual insurance markets deteriorated,” concludes a Milliman actuarial study. “Insurance companies chose to stop selling individual insurance,” “premium rates tended to increase, sometimes dramatically.”

This legislation encourages insurers to design products that sick people don’t want, as insurers lose money by insuring the sick because it’s illegal to charge higher premiums.  Such policies lack features higher-risk customers want, like comprehensive coverage and minimal bureaucratic obstacles to doctor-recommended treatments.

These political controls cause a “death spiral”: premiums increase, so the healthiest stop buying insurance, the remaining risk pool is less healthy, and premiums rise again. Repeat. To prevent this, politicians want mandatory insurance, which Massachusetts imposed in 2006. Since then Massachusetts insurance premium costs have skyrocketed, affordable policies become illegal, and patients have poor access to care.

Preexisting conditions are a problem because the tax code favors non-portable employer-based insurance. This prevents people from buying guaranteed renewable policies before contracting a chronic condition. A free-market in insurance would also offer innovative products such as health status insurance, which would pay for premium increases should you get sick.

Thanks to Ari Armstrong for pushing me to use a strong lead.

Back in September, House Speaker Nancy Pelosi told reporters she was “absolutely” committed to having the final language of any health care bill posted on the Internet for 72 hours before a vote on the House floor.

Well, the bill isn’t finished, with major issues such as taxpayer funding of abortions and rules governing amendments still unresolved. Nonetheless, the Speaker is rushing towards a Saturday vote on the bill.

Read the whole article: Transparency Mañana - Nancy Pelosi backs off her commitment to a 72-hour online viewing period for her health-care bill.

Here’s a video from Patients First dramatizing health care’s closed-door meetings.

Expect less, pay more. It’s not the slogan for some “Bizarro World” Target store in a comic book; it’s an accurate slogan for congressional Democrats’ health care “reform” proposals. They include a new government-run insurance plan, mandatory insurance, new political controls on insurance, and new taxes.

Government-run health plan

You should expect less choice with a new government-run health plan, known as the “public option.” As economics professor Scott Harrington has noted, the public option would be the only option. It would unfairly compete with non-government insurers, which must comply with burdensome political controls that increase premiums. Millions of people would be herded to the government plan who did not choose it as an “option.”

It’s fitting that some House Democrats want to call the government program “Medicare Part E,” where “E” is for “everyone.” Before Medicare, retirees bought voluntary insurance in increasing numbers. Medicare killed this trend and soon monopolized the market.

Read the entire article: Bizarro Health Care ‘Reform’: Expect Less, Pay More.

Thanks to Michael Tanner of the Cato Institute for inspiring the theme for this article.  In his interview for the Fall 2009 issue of Cato’s Letter, he said:

In the end, the American people need to understand that under the reform plans currently making their way through Congress, they will pay more, both in terms of higher taxes and in high premiums, and receive poorer quality health in return.

I should also thank Cato for mailing it to me. Anyone (in the U.S., I assume) can receive Cato’s Letter quarterly for free.

1. Massachusetts’ system of mandatory insurance drives up costs and violate individual rights
2. “Coverage” is not the same as actual medical care
3. The Massachusetts plan will end in rationing.

For example, the bill requires employers to pay at least 72.5 percent of insurance premiums for an individual and 65 percent for families. Data from a 2009 Kaiser Family Foundation survey suggest that at least 30 percent of firms with fewer than 200 employees that now offer insurance would fail the test for family coverage, and about 20 percent would fail for individual coverage.

In other words, small businesses would have to pay more for health insurance than they do now — as well as comply with hefty new record-keeping requirements and audits by federal agents.

The Congressional Budget Office estimates that businesses will be hit with tax penalties totaling $135 billion over six years for noncompliance with the mandate. These would surely fall disproportionately on small businesses.

Read the whole article in the New York Post: Biggest loser of ‘reform’: small biz.

As millions of Americans head to the polls today, it’s worthwhile to reflect on what our representatives in Washington are planning for the future of our health care - a complete government takeover over your choice and quality of care. Despite Americans’ vocal opposition to such plans and polls indicating a majority of the public opposes the President’s proposed reforms, Congress is marching full speed ahead.

The latest House bill is a shining illustration of their goal to have Washington take over our health care. As Americans have a chance to read the bill, the gory details become ever scarier - nearly $600 billion in new taxes, $34 billion in unfunded mandates dumped on states and an underhanded proposal that creates three avenues in which a robust government-run insurance plan could be enacted. The level of bureaucracy is staggering! One particularly outrageous provision mandates that vending machines display nutrition labels for all products before purchases! Altogether, the bill creates 111 new bureaucracies and comes with a price tag of over $1.2 trillion.

With unemployment at nearly 10%, Americans cannot afford this bill and overwhelmingly reject the notion that government should be in charge of their health care decisions. Unfortunately, the public’s request to slow things down to make sure reform is done right, not fast is being completely ignored.

Clearly, as more people read this bill and understand the harsh consequences on their health care choices, criticism grows and internal pressure to pass this bill quickly increases. Accordingly, Speaker Pelosi has planned a vote later this week to ram this through the House before more of the bill is dissected. So we need your help this Thursday, November 5 on our House Call Day to let your Congressman know that placing a bureaucrat between you and your doctor is not an option. Join millions of your fellow Americans in telling Congress to keep their Hands Off Your Health Care!

So on this election day when millions of Americans are able to give power to their voice, remember that politicians in Washington are doing their best to take away your control over what doctor and insurance options you will have. It’s more important than ever that your Senator and Congressman hear from you.