Thursday, July 16, 2009

Abstruse Health Reform Policy

President Obama is stumping for health care reform policy day after day in Public forums. Basically he is intending to let people know that continuing the business as is not workable any more and implying that American Public pressure their law makers to pass the bill. However, in all of these pronunciations, President generally refrains from telling what 'that policy' should look like. This is according to his political play book of letting Congress fill details. Does Public need this constant reminder by our President about the need of reforms? If politically President does not want to tell what he wants as an execution plan, what do we achieve by such campaign style efforts by our President?

It does not achieve anything apart from 'rushing' the bill. There are serious dangers in that. We all know Congress rushed the Stimulus Bill and it has effectively failed to address it's core purpose - decreasing unemployment. It does not matter how many times President try to say the Stimulus package was intended for results over two years, reality is people expected the bill to make difference and so far it is not making any difference. Not that such stimulus packages do not succeed. Apparently Chinese Stimulus package is working in recharging their growth engine. Granted their economy is more geared towards industrial sector and hence may be easy to stimulate. However, then what is the use of all these 'propelling heads' of Summers and Roomer if they can not figure out what could have ignited employment in USA? Congress was rushed, Public was edgy and hence the bad bill / stimulus package was passed.

Do we want one more such bad bill for Health Care Reform too? When CBO comes again and again to say that current Congressional bills do not solve the problem of cost, why is Administration 'rushing' to finish something which will for sure 'break the bank'? On top of it, if Sen. Backus is openly saying that not taxing employer health benefits above certain level is not helping him to contain the cost, why is Administration not open to this idea? Clearly President Obama is ideological here and being too political in rejecting his opponent's good idea. Just because it happened to be Sen. McCain's idea of taxing these benefits (and Candidate Obama opposed it on campaign trails), President Obama is refusing what is good for America in the long run. He is unduly partisan here in conceding demands of ill-advised Labor Unions. Most of the folks in America with employer funded health benefits will not be taxed since we are talking here 'gold plated' plans - plans which cost more than average Federal benefit level. So then why this refusal? It is difficult to understand what President Obama thinks here. In all his numerous public appearances he scrupulously avoids to explain his position on this issue.

There is a reason why we want health benefits above certain level to be taxed - because we want to generate necessary funds for increased health coverage within the health system itself. House idea of taxing rich people to finance reforms is a bad simply for the reason - as and when President Obama wants to balance the budget (the commitments for which are absent and President Obama is frustratingly silent about those); he will need all sorts of sources to pick up additional tax revenues. If we tax rich now to increased health care costs, how will we tax them more to finance Stimulus packages, Bank Bailouts and Wars in foreign countries without totally crippling American Economy? We expect American rulers to leave standard revenue sources of taxing higher incomes for funding general deficit which is enormous at this point with no sight of returning to earth.

In that regard, it is right for President Obama to insist that Congress must give up the power of setting Medicare reimbursement levels. Congress has demonstratively proven that it is incapable of being rational here and control the health cost. But apart from this right policy; there are so many aspects of health care policy that White House have got them wrong. Because Congress always avoids the problem of controlling costs, we need Obama Administration to be patient here rather than pushing the Congress over the edge to commit what Congress always does - spend more and spend irresponsibly.

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