Dent focus remains on health care in Salisbury meeting

November 25, 8:42 AMAllentown Fiscal Responsibility ExaminerKenneth Petrini

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With a few days off from Washington, Congressman Charlie Dent (PA-15) held a “Neighborhood Office Hours Town Hall Meeting” in Salisbury Township on Tuesday. The crowd was smaller than some of the summer meetings but the passions were just as strong against the pending health care bills. Citizen after citizen asked Dent why, if a majority of Americans are against the bill, it can’t be stopped. Dent was not hopeful but he also did not see Obamacare as a done deal.

Dent told the group that the event came together late since he had expected to be in session in D.C. “They’ve been keeping us in Washington D.C. quite a bit,” Dent said. He believes it is part of the Democratic strategy of keeping the representatives from hearing from the people. I joked with him in a private meeting Monday that I’d love to see the reactions that the Louisiana, Arkansas and Nebraska senators get when they return home after voting for the bill in the senate.

Dent was there to talk about the key issues of the day. These, he said, included health care, cap and trade (carbon tax), Afghanistan and the trials of non-military combatants (terrorists).

The Republican, three-term congressman, held up the Pelosi bill which now totals 2032 pages. He has read HR 3200, its predecessor, and his markings showed his progress through HR 3962. Of course, he was already forced to cast a no vote. The members of Congress were given 9 days from the time the bill was introduced until it came up for a vote. Reading 2000 pages of legislation in 9 days, comprehending them and understanding what they do is next to impossible.
Dent was asked why Congress was spending money like there was no tomorrow. “How can we entertain a trillion dollar health care bill,” he was asked.

“I’m extraordinarily concerned about the deficit,” Dent replied. The deficit will be 12% of GDP. To put that into context, the World War II war machine drove the deficit up to 20% of GDP but I only one year in recent memory, during the early 80’s recession, has it topped 6% of GDP. “That’s simply an unsustainable number,” Dent told the crowd.
He blames the deficit, in large part, on the stimulus bill. He called it “money borrowed and spent to create very few jobs.” He said the deficit was what made the health care issue so much more difficult.

“My fear is this legislation will have a negative impact on employment,” Dent warned. As he walked into the meeting, Dent was on the phone. He explained that it was a call from an employer who told Dent that if Pelosicare passes, he will have to lay off people due to the mandated health coverage for employees. In addition, that employer, like many employers may choose to take the 8% penalty for not having insurance versus paying 15% or 20% of payroll on insurance. That is the part of the bill that many, including Dent, fear will drive more and more into the public option, which could be a stealth universal single payer plan.

Dent asked “how does the math work?” He questioned how the government could provide care for 8% of payroll versus employers who often pay much more. While there might be some efficiency, there are few things we look at as being run well by the government.

As Dent pointed out, only one government entitlement program has ever performed better than budgeted and that was Medicare Part D. Why? I would submit, as Dent suggested, it is because the insurance companies and not the government, administer it!

With the government constrained as to costs, Dent says “you move to rationing, it is inevitable.”
Dent also explored some of the differences between the Senate and House bills. He suggested these differences could spell trouble if both houses pass bills and get to conference. More on that later.

 In addition to non-health revenue raisers, like the so called codification of the economic substance doctrine, the Senate pays for their program with a .5% increase in Medicare taxes on the “rich.” For the first time, the Medicare tax will be used to pay for something other than Medicare. The Senate also taxes “Cadillac health insurance plans,” those costing in excess of $8,000 for individual coverage. Without indexing, Dent fears it will become a “Chevrolet tax” in time. Heck, the way health care costs will skyrocket for those not in the public option, it may be a “Yugo tax.”

Dent was asked how this will work for people on Medicare. While the major cuts are in Medicare Advantage, Dent predicts that will not be the only part of Medicare impacted by a half trillion dollars of cuts over 10 years.

“There’s a lot of fraud in Medicare,” Dent said. “Medicare pays very efficiently. Unfortunately, they also pay fraudulent claims efficiently.” He said there may be as much as $60 billion of fraudulent or improper claims each year.
Dent was asked what discussions take place in Congress regarding incentives to provide medical services. The questioner referred to the medical oxygen business where the reimbursement rates are low and Medicare will only provide three years of coverage. “Do they debate how behaviors will change or simply talk about control?” Dent was asked.

Dent responded that “there are a lot of discussions about the lack of sustainability here.”

“The federal government does not have a very good track record of projecting entitlement costs long term,” Dent added.  “We are going to grossly understate the cost of this.”

Getting back to the question, Dent said “There’s not enough of what you might call payment reform.”

Medicare, Dent notes “helps distort the economics medical costs.” Paying 80 or 85 cents on the dollar of the true cost, Medicare shifts the remaining 15 or 20 cents to those with private insurance or no insurance. The same is seen in the way that those with coverage subsidize the uninsured in the emergency room where they cannot be turned away for inability to pay. A public option that pays at less than cost will exacerbate this problem. At some point, so many are on the public option that below cost pricing could not be sustained, in fact.

HR3200 would have paid at the Medicare rate and at Medicate plus 5% for doctors. That was still below cost. The Pelosi Bill, Dent says, provides for “a negotiated rate which I believe will be negotiated based on a Medicare schedule.”
Dent added “The costs will go up and not down as a result of this.”

Regardless, it does tell you that the CBO cost estimates aren’t to be taken as gospel truth. They have an assumption as to payment rates. Dent didn’t say what the assumption was. I don’t know what it is. However, as the rates remain to be negotiated one would guess it won’t end up lower than the assumption.

Many people wanted to know “where is this going?”

“The Senate is likely to pass some kind of a bill before Christmas, at least that is their intent,” Dent said. He then went into the “flash points” that could make an agreement between the House and Senate anything but a done deal.
In the way the program is paid for, Dent sees a difference in philosophy from the House and Senate. The Senate, as explained before looks to the FICA tax and taxes on high premium plans. The House looks to an income tax surtax of 5.4% on the rich and taxing of medical devices (which in itself drives up prices although the House believes doctors and hospitals will pay more for bedpans and exam tables and not pass on the cost).

Abortion is still a hot button in both houses as some will not vote for a plan that provides public funds for abortion and some will not vote for any plan that restricts funding.

The 800 pound gorilla here may remain the public option. The House Bill has one. The Senate Bill has one, although several of the Senators who voted to open debate on the bill have indicated support for a filibuster if the public option is not dropped.

Dent did not get into it, but it is very likely if the two houses make it to conference that they won’t ram through something. The fear remains that the Senate drops the public option to placate a few conservative members and then adds it back in conference.

Dent sees the Democrats as driven by the election calendar and the belief that Republicans took control of the House in 1994 because Bill and Hillary failed to pass a health care bill. That may grossly understate both the value of Newt’s Contract with America and the backlash that is likely if the bloated SEIU Pelosicare Bill passes. Still, that is what drives the Democrats to do something.

“The president has staked much of his presidency on getting this done,” Dent said. Failure to pass a bill will undermine the Obama presidency. The crowd seemed to think that wasn’t such a bad thing.

Still, Dent saw the legislative process as a failure in leadership by Obama. Rather than propose legislation, in the case of health care as with stimulus, Obama gave bare outlines and left it to Waxman and Pelosi to craft the bills that ran far afield of his statements. Ronald Reagan, Dent noted, when he wanted legislation, delivered the bill to Bob Dole to introduce. He provided leadership.

“If the president wants to govern the country from the center, going to Nancy Pelosi or Henry Waxman isn’t the way to do it,” Dent declared.

Dent was asked what will we do if nothing is passed? After all we do have people who can’t get insurance. This is where Dent was able to talk a bit about how a bipartisan effort could have been made.

The Democratic goal, he says, is universal coverage. I’d add the words single payer in there. The Republican goal is to lower costs to make coverage more available. I have criticized both—one for going too far and one not far enough.
Dent again spoke of how this should be attacked as a process in digestible pieces rather than in a single bite.

To address the problem of denial of coverage for pre-existing conditions, Dent would establish high risk pools at a state level (with federal subsidy) or a reinsurance network.

He’d address costs by looking at litigation reform and spending more in the operating room than the court room. The Pelosi Bill “has three pages on liability and frankly they would have been better if they had done nothing,” Dent said.
Dent would provide tax parity for those who buy their own insurance. Those people pay with after-tax dollars whereas employer insurance is effectively provided on a pre-tax basis. Even employee contributions to employer plans can be set up as pre-tax.

Dent also addressed the issue of self insurance. Large employers self insure. They define the policy coverage, without state mandates in many cases. They benefit from their experience and the nature of their workforce. Dent said that small employers should be allowed to pool together to do the same thing.

He is very concerned that the Pelosi Bill and its omnipotent health insurance overseer will disrupt even the self-insured.

Dent also called for competition across state lines. OK, we differ there since competition across state lines will only yield real savings if you allow, for example, a Wyoming insurance company to write a policy in New Jersey without regard to New Jersey’s mandated coverages. Insurance regulation has been seen as a matter of state law and I believe any federal attempts to override that run afoul of the 10th Amendment, which is the Holy Grail to true Republicans.

Next, one lady, who I hope was psychic since she called him Senator Dent asked “Is there any way this can be stopped?” Dent said he thinks Congress needs “to step back and look at this.” He warned that the bills “move the United States n the direction of a European welfare state” with higher taxes, slower economic growth and higher structural unemployment. This is at the same time as the leaders of France and Germany seem to be waking up to the “unsustainability” of their programs. Dent said that they understand “because they are closer to the cliff than we are.”

“We need an American solution,” Dent declared. He said we should not look to a Canadian or European answer.
In the end, as more and more people asked “Is there nothing we can do?” Dent reminded them that “elections have consequences” and Obama is doing exactly what he said he would do. He told people to keep the heat on the Democrats. “It’s not a done deal,” Dent noted. “I wish I could tell you what the final end game was.”

Note: The congressman also dealt with GITMO in his town hall and several issues in our discussion on Monday. I’ll deal with them in another column as health care was the major focus of the Salisbury event. As in the past, I welcome the opportunity to present the positions of Jake Towne and John Callahan as well. All they need to do is contact me. Jake does on a fairly regular basis. If the Callahan campaign cares about what is written here, I invite them to contact me as well.