What, exactly, is Senator Sanders’ health care plan, now just two weeks out from the first caucus of primary of the 2016 Presidential election? Well, there isn’t one. There are general themes, plenty of promises, and no specifics. There is, though, a plan that calls for universal healthcare with his name on it. That is Senate Bill 1782, the American Health Security Act of 2013. Senator Sanders proposed it in 2013. It did not have a single co-sponsor.
You should read it. I did.
There is hereby established in the United States a State-based American Health Security Program to be administered by the individual States in accordance with Federal standards specified in, or established under, this Act.
In order for a State to be eligible to receive payment under section 604, a State shall establish a State health security program in accordance with this Act.
That may sound familiar to some of you. But before we reach any conclusions, let’s jump ahead to section 604 to see what it is all about.
It turns out 604 is the specific payment to States section under the State funding section of the Bill. First, in 601, the Bill creates a “National Health Security Budget,” which specifies the total health care budget that will be spent in the nation between the federal government and the States. And it artificially sets growth in health care costs at either zero or the average annual percentage increase in the gross domestic product over the prior three years. That’s absurd, of course, for health care costs have been rising at far more than either of those numbers for quite a long time. But let’s not get caught up in that particular flight of fancy. Let’s look at States.
States are required, within the budgeted amounts, to pay 10% of costs under the Bill, and then there’s this:
(1) SPENDING EXCESS.—If a State exceeds its budget in a given year, the State shall continue to fund covered health services from its own revenues.
Yup, States can be on the hook for more than the 10% budgeted. Is this starting to sound familiar?
States would be required to enroll every legal resident in the health care program, including people they’ve never insured before. And they have to pay at least part of the costs. Yes, this does sound familiar:
There is no doubt that the Act dramatically increases state obligations under Medicaid.
The Medicaid provisions of the Affordable Care Act, in contrast, require States to expand their Medicaid programs by 2014 to cover all individuals under the age of 65 with incomes below 133 percent of the federal poverty line. The Act also establishes a new “[e]ssential health benefits” package, which States must provide to all new Medicaid recipients—a level sufficient to satisfy a recipient’s obligations under the individual mandate. The Affordable Care Act provides that the Federal Government will pay 100 percent of the costs of covering these newly eligible individuals through 2016. In the following years, the federal payment level gradually decreases, to a minimum of 90 percent.
NATIONAL FEDERATION OF INDEPENDENT BUSINESS v. SEBELIUS. Does anybody remember how that turned out? I do:
That system “rests on what might at first seem a counterintuitive insight, that ‘freedom is enhanced by the creation of two governments, not one.’ ” For this reason, “the Constitution has never been understood to confer upon Congress the ability to require the States to govern according to Congress’ instructions.” Otherwise the two-government system established by the Framers would give way to a system that vests power in one central government, and individual liberty would suffer.
That insight has led this Court to strike down federal legislation that commandeers a State’s legislative or administrative apparatus for federal purposes.
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Permitting the Federal Government to force the States to implement a federal program would threaten the political accountability key to our federal system.
But wait, you say, the federal government does that all the time. Not according to the Supreme Court:
The Medicaid expansion, however, accomplishes a shift in kind, not merely degree. Under the Affordable Care Act, Medicaid is transformed into a program to meet the health care needs of the entire nonelderly population with income below 133 percent of the poverty level.
Sanders’ plan, of course, is even broader. It is a program to meet the health care needs of the entire population, elderly or nonelderly, above or below 133% of the poverty line. So how did that work out?
What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding
That is what led to the system we have now — a patchwork of Medicaid programs that are only ACA compliant in States led by Democrats. The controlling precedent would kill Bill 1782 in its crib.
What else should we know about Bill 1782?
(1) IN GENERAL.—Notwithstanding any other provision of law, subject to paragraph (2)—
(A) no benefits shall be available under title XVIII of the Social Security Act for any item or service furnished after December 31, 2014;
(B) no individual is entitled to medical assistance under a State plan approved under title XIX of such Act for any item or service furnished after such date;
(C) no individual is entitled to medical assistance under an SCHIP plan under title XXI of such Act for any item or service furnished after such date; and
(D) no payment shall be made to a State under section 1903(a) or 2105(a) of such Act with respect to medical assistance or child health assistance for any item or service furnished after such date.
And:
(b) Federal Employees Health Benefits Program.—No benefits shall be made available under chapter 89 of title 5, United States Code, for any part of a coverage period occurring after December 31, 2014.
(c) TRICARE.—No benefits shall be made available under sections 1079 and 1086 of title 10, United States Code, for items or services furnished after December 31, 2014.
Medicare? DEAD!
Medicaid? DEAD!
SCHIP? DEAD!
Tricare? DEAD!
Yes, my friends, Sanders’ bill really does kill those programs. The sole exception? A person who was in the hospital under one of the programs at the time of the transition may continue to get the benefits until they are discharged.
Did you know the bill actually outlaws private insurance?
(c) No Duplicate Health Insurance.—Each State health security program shall prohibit the sale of health insurance in the State if payment under the insurance duplicates payment for any items or services for which payment may be made under such a program.
Note, please, it doesn’t say “if payment under the insurance duplicates payment … which IS BEING MADE under such a program.” It says “which may be made.” So, if a State, under the ACA precedent, rejects the program, it would not even be legal for private insurers to sell health insurance there. (And if it were, with much smaller populations to reduce risk, costs would be even higher, and cherry-picking even worse than it was before the ACA.)
Remember “death panels”?
Subject to section 201(e), the Board may impose such limits relating to the costs and frequency of replacement of eyeglasses, contact lenses, hearing aids, and durable medical equipment to which individuals enrolled for benefits under this Act are entitled to have payment made under a State health security program as the Board deems appropriate.
DME is far more than glasses and hearing aids. DME includes life-saving devices for many people. There really is a federal government panel that decides if you get it.
In case anybody believes this would have a better chance of survival than the Medicaid provisions of the ACA, take a look at this:
Each State shall submit to the Board a plan for a State health security program for providing for health care services to the residents of the State in accordance with this Act.
They never had to do that before, did they? Nope. That would be what the folks in DC call “a new federal mandate.” This is also where some people find language that leads them to say, “but the Bill takes over for States that don’t join.” They’re wrong. This is where the Bill takes over for the one tiny part of it that is the PLAN for the State system:
In the case of a State that fails to submit a plan as required under this subsection, the American Health Security Standards Board Authority shall develop a plan for a State health security program in such State.
It doesn’t actually take over for the State system itself. In case you don’t believe me, look at this one detail under that paragraph:
The establishment of a State health security budget.
Yup, it’s still a State budget. The ACA decision would kill this thing. Still not sure? Check out this anti-federalist stunner:
If the Board finds that a State plan submitted under paragraph (1) does not meet the requirements for approval under this section or that a State health security program or specific portion of such program, the plan for which was previously approved, no longer meets such requirements, the Board shall provide notice to the State of such failure and that unless corrective action is taken within a period specified by the Board, the Board shall place the State health security program (or specific portions of such program) in receivership under the jurisdiction of the Board.
Yeah. This has the same chance of survival as a small ice cube in a large blast furnace.
So how is this paid for?
First, kill Medicare, Medicaid, SCHIP, and Tricare, and raid their funds:
Notwithstanding any other provision of law, there are hereby appropriated to the Trust Fund for each fiscal year (beginning with fiscal year 2015) the amounts that would otherwise have been appropriated to carry out the following programs:
(A) The Medicare program, under parts A, B, and D of title XVIII of the Social Security Act (other than amounts attributable to any premiums under such parts).
(B) The Medicaid program, under State plans approved under title XIX of such Act.
(C) The Federal employees health benefit program, under chapter 89 of title 5, United States Code.
(D) The TRICARE program (formerly known as the CHAMPUS program), under chapter 55 of title 10, United States Code.
(E) The maternal and child health program (under title V of the Social Security Act), vocational rehabilitation programs, programs for drug abuse and mental health services under the Public Health Service Act, programs providing general hospital or medical assistance, and any other Federal program identified by the Board, in consultation with the Secretary of the Treasury, to the extent the programs provide for payment for health services the payment of which may be made under this Act
Next, all employers, including those who are self-employed, have to pay a 6.7% payroll tax.
Second, there is a health care income tax of 2.2% of taxable income on everybody, with large increases in that percentage for those making more than $200K individually, or $250K filing jointly, plus an additional 5.4% payroll tax on income over $1M (but nothing related to the people with REAL wealth — those making their money through capital gains). Please note, there is no exception for people in States that reject the Bill, as they will no doubt be entitled to do under the ACA precedent. So if you live in Texas, or Florida, or Kentucky (soon), or many other States, you pay the tax but you don’t get the insurance. Actually, you don’t get any insurance. Good luck.
But wait, you might say, there IS a tax on capital gains, because there is a 0.02% tax on all security transactions. Hmmm, I thought that was going to be used to pay for college? I guess it’s in addition to the security tax to pay for college. There is an exception for stocks held in retirement accounts and for certain mutual funds — that’s good — but it’s not clear if there is an exception for mutual funds transaction held in retirement accounts. If not, that’s huge, because most 401Ks are filled with funds that have a tremendous number of transactions. That’s what the little people can afford, if they want to diversify. The truly wealthy can just buy Berkshire Hathaway and a thousand shares of GE.
Did you know that under this Bill employers can’t offer better coverage than the Bill offers? It’s true.
Sec. 522. (a) Subject to subsection (b), no employee benefit plan may provide benefits which duplicate payment for any items or services for which payment may be made under a State health security program established pursuant to section 101(b) of the American Health Security Act of 2013.
Subsection (b), by the way, is worker’s compensation insurance.
What does all this mean?
It means Sanders’ only plan to date really does end Medicare, Medicaid, TRICARE, and SCHIP, it really does impose taxes on everybody, it really does double-dip into the same funding he says will pay for his college plan, and it really will not survive a Supreme Court challenge from States that don’t want to play along.
I don’t think the ACA is perfect. I think it’s far from perfect. But it’s far better than this Bill, which was, inconceivably, written with full knowledge of what the Supreme Court did previously. It’s a fantasy written on air. So please stop telling us Senator Sanders has a valid plan for universal healthcare, and that it will cover everybody while saving us all hundreds or thousands of dollars.
Sanders needs to come out with a new plan NOW, before people start voting, or stop complaining that he’s being unfairly maligned by criticism of the only plan with his name on it.