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December 9 2009

New Senate Compromise Contains Old Policy Nonsense

Nicole Kurokawa Neily

The Senate has moved closer to a deal, with a group of 10 led by Sen. Harry Reid announcing a major compromise late Tuesday night. There are 3 major components of the compromise: a national "exchange" of sorts administered by the Office of Personnel Management, along the lines of the Federal Employee Health Benefits Program; a trigger for a public option, if the exchange doesn't provide enough options; and Medicare expansion for people aged 55 and up (currently, entry age is 65.)

Let's tear this compromise down, shall we?

The Cato Institute's Mike Tanner has a great blog post on why the FEHBP option is flawed - including that its costs are rising faster than average, that insurance companies are dropping out of the program, and that OPM is stressed already, meaning that management of the new program could overburden the agency. 

The public option isn't dead yet - it could still be "triggered" should the national exchange fail to provide adequate choice (this approach is favored by Sen. Olympia Snowe (R-ME), and is a nod to hard-line Democrats like Sen. Roland Burris (D-IL) who have demanded a public option.) In case you're interested, I wrote a few weeks ago why a trigger would be a bad idea. Bear in mind that the government will be defining how much more expanded coverage will need to be, and what "adequate choice" will be. Think insurers will get points for trying, and even marginally expanding coverage? Think again.

Expanding Medicare is another boondoggle, and not anything that should be seriously considered. It's fiscally insolvent, fraught with waste, fraud, and abuse, and reimburses providers below market rates, resulting in subpar and oftentimes insufficient care (hence, why so many seniors must opt into Medigap programs to actually cover their bills.) Sen. Tom Harkin (D-IA) proposed this plan before on a much larger scale - but regardless of how big it gets, the underlying principles are still the same. Medicare stinks, and should be completely overhauled - NOT expanded!

The compromise merely cobbles together some old ideas -- none of which are any good whatsoever. The Senate would be much better off dumping the bill entirely and starting from scratch.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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