Daschle’s Cold Medicine: 10 Pitfalls In Health Reform

Paul Bedard of U.S. News and World Report previews Former Senate Majority Leader Tom Daschle’s new book, Getting It Done: How Obama and Congress Finally Broke the Stalemate to Make Way for Health Care Reform. The book is due out October 12th, and if this excerpt about 10 Healthcare Reform Pitfalls is any indication, we’re in for a good dose of honesty about the future politics of reform:

1. Higher premiums. While he says that “there is little risk” that everyone’s health insurance premium will go up, “it is unrealistic to expect that none of us will see any increases.”

2. Preexisting condition gap. 2010 will see that children with preexisting conditions can’t be rejected by health insurance companies, but adults won’t get that benefit for another four years.

3. Shrinking Medicare payments to doctors. 2011 will see payments to Medicare Advantage plans frozen and payments to providers will increase at a slower rate as it becomes official policy to expect healthcare providers to become more efficient.


4. Increased senior premiums. In 2011 more high-income seniors will start paying higher premiums. They will also get less of a subsidy for prescription drug coverage.

5. Cuts in Medicare Advantage. In 2012, Obama’s reelection campaign year, Daschle says that “there will be some significant healthcare events this year that are not politically safe.” Such as: Payments to Medicare Advantage plans will now be cut, not just frozen.

6. Mediare-cutting panel. Also in 2012, Obama will have to appoint a board charged with “tightening Medicare spending even more.” Daschle concedes that “in an election year, the appointment of the board is sure to lead to a new round of overheated charges about what the board might to do seniors’ care.”

7. Medicare tax boost. Come 2013, Daschle reports that individuals earning more than $200,000 a year and couples earning $250,000 a year or more will see a boost in Medicare taxes, ironically called the “HI tax,” short for hospital insurance tax. s.

8. Change in healthcare deduction. Also in 2013, the healthcare spending deduction will change. Where you can now deduct anything spent over 7.5 percent of your income, the new base will be 10 percent of annual income. Seniors get an extension on the 7.5 percent rate until 2017.

9. Employer tax. If employers have more than 50 full-time workers and do not provide coverage, they will be fined $2,000 for each employee. If they provide “expensive” coverage, they’ll also pay a fine.

10. Individual penalty. In 2016, with most of the reforms, in place, individuals who don’t have health insurance will be fined $695 a year, or 2.5 percent of annual income, whichever is greater.

Talk about spilling cold water on the much touted Democratic belief that Americans will fully embrace health care reform once it becomes law. Daschle’s perspective offers a more realistic take on the long road to not just selling reform to the public, but also dealing with many of the challenges that it brings for different constituents. Universal coverage won’t be painless and the cost containment provisions — excise tax, medicare panel — will generate tougher headlines than anything we’re seeing today. The question for lawmakers will be: do we stick with these policies or abandon them for short-term political gain. The history on this is mixed — with Congress, patching one cut, but offsetting it with others — but it’s also worth arguing that many of these cuts (particularly the Medicare adjustments that will come from the board) are actually politically advantageous since they do not directly target benefits.