Senator's Column by Mike Johanns

Unintended And Unwanted Consequences Of Health Care Reform

July 13, 2009

Dear Nebraskans,

For six weeks, I've been writing to you about the challenges we face in our search for the right solutions to health care reform. I have sifted through the fluff and Washington rhetoric and hosted very productive tele-town halls and round tables to get Nebraskans' perspective on the issue. To wrap up this series, I'd like to stress the need for thorough deliberation in order to minimize the detrimental and unintended consequences I see hidden in the Senate bill.

Recent reports have claimed that the current Senate legislation would insure 97 percent of Americans. The reports also project a lower than expected cost of $611 billion over ten years.

Here the old adage applies: if it looks too good to be true, it probably is. When you read the fine print, the $611 billion only covers the cost for six years, as it will take four years for the programs to get up and running. The ten year cost is closer to $1.5 trillion. These numbers also leave out one very important aspect: Medicaid. In order to cover 97 percent of Americans, Medicaid would have to expand to cover up to 150 percent of the federal poverty level. The costs to cover this expansion are estimated to be more than $500 billion, and have not yet been factored into the bill. Therefore, the grand total for this legislation would be more than $2 trillion.

And it gets worse. Under the Senate plan, the federal government would only cover the cost of expanding Medicaid for five years before passing it onto state governments. For Nebraska, it would stress the state budget even more by adding $73 million annually. In other words, state taxpayers will shoulder the burden with both their state and federal taxes.

I spoke on the Senate floor last week to highlight another glaring unintended consequence. The bill would require companies with more than 25 employees to provide health insurance or else pay a $750 annual fine for each uncovered employee. Last year, the average annual amount spent by a company on health insurance for an employee was $3,983. So paying the bill's "fine" and pushing employees onto the government plan would amount to a savings of $3,233 per employee. That's not a fine, that's a bargain. One study estimates as many as 119 million Americans could be forced onto the government program by their employers. We must rethink this so that a government fine does not equate to an obviously smart business decision that leaves Americans with only one option: insurance run by the government, with bureaucrats making treatment decisions.

Lastly, a provision was recently added to the Senate bill that would require health insurance companies to contract with entities that perform abortions. This could literally mean a U.S. government mandate to insure abortions. I will strongly oppose this attempt at social engineering.