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Wednesday, October 14, 2009

Small Biz Health Care Daily: Health Care Mess from Senate Finance

In a partisan 14-9 vote, with only one Republican (Senator Olympia Snowe of Maine) joining 13 Democrats, the Senate Finance Committee on Tuesday approved a health care package.

Some media accounts are billing this as a “centrist” or even “conservative” measure. That only illustrates how far off the rails both the media and this debate have careened. If one takes an objective look, there is no way getting around the reality that this is a big government, very liberal package. It just happens to be that the Senate Health committee and various House committees have put forth legislation that’s even more liberal and calls for even bigger government. That does not make the Senate Finance package, however, centrist or conservative.

Just consider a few points:

• The bottom line is that this would be a massive expansion of government, whether one accepts the guess-timate of a ten-year cost of $829 billion, or if one understands that such projections almost always underestimate the true costs of vastly expanded government. The costs for taxpayers are huge at the outset, and will only grow more burdensome with time.

• A tax on certain employer provided health plans would increase dollar costs for consumers and businesses; rein in health plan coverage; and/or reduce choices in the marketplace.

• Increased taxes on medical device and prescription drug firms quite simply means fewer resources being available for research and development.

• An individual mandate for insurance coverage obviously would hit the pocketbooks of individuals and families.

• A tax on employers for any workers receiving health care subsidies would both raise labor costs and reduce jobs available for certain workers, especially lower income earners.

• A guaranteed issue mandate would increase insurance costs for all.

If the Senate Finance Committee’s objective is to raise health care costs, then they have passed the correct legislation. If they had something else in mind – perhaps making health care more accessible and affordable – then this does the exact opposite.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council

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