Bureaucracy drives up health care plan’s costs

The health care reform plan proposed by House Democrats would create at least a dozen new federal programs, boards and task forces, contributing to the proposal’s hefty price tag that has drawn criticism from Congress’ official scorekeeper.

Democrats say the bureaucratic infrastructure is necessary to administer the expansion of health care benefits to the tens of millions of uninsured Americans while creating more competition for private insurers to drive down out-of-control costs.

The health care reform bill, which is expected to cost roughly $1 trillion over 10 years, would create a public health insurance plan and a health insurance “exchange,” a clearinghouse where consumers will be able to shop for public or private coverage. The programs will require a massive undertaking by the federal government that analysts say likely will take years to fully implement.

“All of the new authority that could potentially come of the legislation have very detailed specifications to work through and they will also continue to have significant political overlay,” said Elizabeth A. McGlynn, associate director of Rand Health in Rand Corp., a nonprofit think tank. “Think of it a little bit like the [presidential] transition. Look at the challenges to just these boards that will probably have appointees.”

At least three boards will be set up to advise the health and human services secretary on policy. The Health Benefits Advisory Committee, for instance, will recommend the basic requirements of insurance plans. All Americans would be required to carry at least basic coverage under the bill, with exceptions for the poor.

The debate over the Democratic health care proposals headlined Sunday’s political television shows. Sen. Kent Conrad, North Dakota Democrat, said no bill would go through his chamber without Republican support, even though the minority party’s resistance appears to be stiffening.

“There are not the votes for Democrats to do this just on our side of the aisle,” he said on ABC’s “This Week.”

Much of the concern on Capitol Hill, both among Senate Democrats and Blue Dog Democrats in the House, centers on the proposals’ cost. In its preliminary review of the House’s version, the Congressional Budget Office said the bill would raise the federal deficit by $239 billion over 10 years. The figure has been disputed by Democrats, who say the CBO can’t fully judge the bill’s cost-cutting measures.

But the office’s top official made headlines when he said neither the House nor Senate bills addressed the costs of health care, the primary reason President Obama has taken on the politically dangerous endeavor.

“We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount,” said CBO Director Douglas W. Elmendorf, when asked about the health care reform legislation in the House and in a Senate panel. “On the contrary, the legislation significantly expands the federal responsibility for health care costs.”

The scope of the bill has provided small-government Republicans with ammunition and raised concern about its fiscal soundness among conservative Democrats, primarily in the House Blue Dog Coalition, which is locked in a battle with party leaders over its cost. Republicans say the plan will increase the size of government and threaten doctor-patient relationships.

Republicans on the Joint Economic Committee compiled a flow chart with arrows and multiple colors that they say represents the complicated bureaucracy that would result from the House bill. It has been picked up by several other party members.

“It’s confirmed fears by people of the massive government bureaucracy that will come between them and their doctor,” said Rep. Kevin Brady, Texas Republican and the joint panel’s ranking member.

They wanted to send the chart to constituents, a process involving taxpayer money that requires approval by a bipartisan committee. Democrats blocked it, saying the information is inaccurate.

“Using gimmicks that are two decades old and phony rhetoric spoon-fed to them by an insurance industry benefiting from the status quo won’t do anything to fix the broken system we currently have,” said Doug Thornell, a spokesman for Rep. Chris Van Hollen, Maryland Democrat and assistant to the speaker of the House.

Story Continues →