1. Joseph R. Antos Wilson H. Taylor Scholar in Health Care and Retirement Policy American Enterprise Institute Health Reform: Déjà Vu All Over Again? Health Care Forecast Conference University of California, Irvine February 25, 2010

2. And speaking of vu… 2

3. Growing problem of obesity House 7/14 – TriComm – 1,018 pages 10/29 – HR 3962 – 1,990 pages 11/7 – Engrossed bill – 2,016 pages Senate 6/9 – HELP – 615 pages 10/19 – SFC – 1,502 pages 11/18 – Reid HR 3590 – 2,074 pages 12/24 – Engrossed bill – 2,409 pages 3

4. So many pages, so little time Perfectibility of regulation— if not of man Attempt to solve every conceivable problem Solution Problem Solution … But the bills are incomplete 4 Scores of new advisory and regulatory bodies Obama plan continues this strategy

5. Conflicting policy objectives Expand insurance coverage—cut the deficit Expand benefits—lower costs Allow everyone to keep what they have—change what insurance is required to do Promote choice—keep most people in ESI Lower premiums—eliminate underwriting Cut Medicare payments—maintain program benefits Promote economic growth—tax business 5

6. Building blocks of House, Senate bills Health insurance exchange Insurance regulation Mandates Subsidies Medicare cuts Tax increases Earmarks 6

7. Broad similarities Big money  Coverage: House $891 B, Senate $871 B  Medicare cuts: H $453 B, S $438 B  Taxes 1 : H $806 B, S $638 B Big regulation  Mandates – individual and employer  Guaranteed issue, no pre-ex, no rescissions, rating bands, minimum benefit package, medical loss ratio  Insurance exchanges  Tax credits, Medicaid expansion  “Nice” ideas: ACOs, medical home, bundled payment, prevention, CER, quality measures, fraud/abuse, FOBs, etc. 7 1 Excludes tax credits which reduce net revenue: H $25 B, S $140 B

8. Major disagreements Millionaire’s tax vs. Cadillac tax  H: 5.4% surcharge, income>$1 M (joint) –$460.5 B  S: 40% excise tax, coverage>$8,500/$23,000 –$148.9 B, supplemented by add’l 0.9% HI payroll tax on wages>$250,000 (joint) ($86.8 B), insurer fee ($59.6 B), Pharma fee ($22.2 B), others National vs. state-level insurance exchange Public option vs. none Permanent fix, SGR vs. none  H: $209 B—but hidden in separate bill Part D donut hole phase-out vs. one-time fill-in  H: Rx discount + duals rebate; S: Discount + $500 reduction 8

9. Other differences 2:1Age rating3:1 NoYoung invinciblesYes 2.5% of AGI in 2013Individual penalty$750 in 2016 Payroll tax 2-8%Employer penalty$3000/employee getting tax credit Greater for income<300% FPL Individual subsidyGreater for income 300- 400% FPL To 150% FPLMedicaid expansionTo 133% FPL NoMedicare commissionYes Non-health $43.1BTaxesTanning $2.7B 9

10. Why the stalemate? 10 The Republicans are our opposition. The Senate is our enemy. Rep. Anthony Weiner (D-N.Y.), January 27 after SOTU