Obama Health Reform May Threaten Economy

From Keith Hennessey, "Wrong Health Reform Will Hurt Economy":

The president is correct that health care reform is essential to a strong economy. He accurately identifies the underlying problem as extraordinary growth in health spending, leading to slower wage growth, too many uninsured and unsustainable government spending. He is correct that reform needs to “bend the cost curve” downward to stop families, employers and governments from chasing their own tails. Unfortunately, the legislation being developed in Congress moves in the opposite direction.

After the vice president admitted the administration had misread the economy, the president said administration officials, instead, had incomplete information — but yet they would not have done anything different in the too-slow stimulus. We need to prevent a recurrence of the stimulus mistake on health care.

At a time of rising unemployment and extraordinary short-term economic weakness, these bills would hurt the U.S. economy. The economic damage they would cause outweighs the benefit of reducing the number of uninsured.

The bills would bend the health spending cost curve upward. Amy Finkelstein’s research shows that the creation of Medicare increased long-term health spending growth, and this new entitlement would exacerbate that trend. The president references Dartmouth’s excellent research about regional spending differences, and yet legislation would reinforce these differences by subsidizing high-cost urban areas more than low-cost rural areas. Insurance mandates for guaranteed issue and community rating would raise premiums, as they have in New Jersey, and government-mandated benefits and cost-sharing would, over time, become more generous and expensive as politicians pander.

Higher premiums would mean lower wages. Employers would face a new mandate to provide government-defined insurance, losing the flexibility to structure compensation and health insurance based on labor market demand. Employers who fail to obey would face two Cabinet secretaries with the authority to impose arbitrary punitive taxation to “encourage” compliance.

Employees who want to keep the health insurance they have now would need to persuade their employer to run two systems. This clunky and costly bifurcated system would lock some employees into their current jobs and calcify our flexible labor force.

More at the link. Also, more from Keith Hennessey, "

Plus, "CBO Sees No Federal Cost Savings in Dem Health Plans," and "Bombshell: CBO Chief Tells Congress ObamaCare Will “Significantly Expand” Federal Spending."

And, from The Blog Prof, "House Health Care Bill Makes Private Insurance Illegal!!!" (featuring video and a link to Investor's Business Daily, "It's Not An Option").

More at Memeorandum.

And, from June, Dr. Peter S. Rosenbloom, "Obama Care: Robbing From Peter to Pay Paul."

Related: Michelle Malkin, "Obamacare in the House: Do the Blue Dogs Have Any Bite?"

Video Hat Tip: Conservatives for Patient Rights.