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Last week, I pondered the political wisdom of the House Democratic leadership, which, until Saturday, had worked to preserve taxpayer-funded abortion in the House bill (H.R. 3962), despite the fact that dozens of pro-life Democrats were threatening to vote “no” on the bill, leading to its defeat.

Given the prospects of defeat, however, House Speaker Nancy Pelosi allowed a vote on the Stupak-Pitts amendment, which prohibits taxpayer-funded abortion. With 64 Democrats voting for the amendment and no Republicans voting against it, it passed. With abortion funding off the table, the bill went on to pass the House by a mere 5 votes on Saturday night. The matter of abortion funding was pivotal.

And the testimony of the U.S. Conference of Catholic Bishops (USCCB), which unambiguously opposes taxpayer-funding for abortion, was clearly decisive. Not surprisingly, the supporters of taxpayer-funded abortion are up in arms about it.

There are a couple of ironies in the way things turned out. First, the passage of the Stupak amendment allowed Louisiana Rep. Joseph Cao to cast the lone Republican vote for PelosiCare (though he did so only after it was clear the bill would pass anyway). Cao is in a district that went heavily for Obama in 2008, but he would have voted no if the bill had allowed taxpayer-funded abortion.

Second, the last minute passage of the Stupak-Pitts amendment focused media attention on the USCCB, which signed off on the amendment. This sign-off gave some reporters the impression that the USCCB was endorsing the bill itself. And that impression, in turn, may provide the legislative monstrosity a patina of respectability, just when it needed it.

Of course, the impression is mistaken. Although the USCCB has endorsed the goal of universality, it’s a misreading to see their support of the Stupak amendment as an endorsement of the entire House bill.

However the final legislation turns out, it will now be very hard for Congress and the president to sweep the matter of taxpayer-funded abortion under the table, or to succeed in offering fake fixes, as they tried to do, unsuccessfully, during this round. And the fact that Pelosi et al. had to swallow the bitter pill of a ban on tax-funded abortions demonstrates just how tenuous, and perhaps fleeting, support is for the bill, even in a Democrat-controlled Congress.

Nicholas Kristof, writing in the New York Times, provides a veritable assault of statistics designed to show the weakness of the U.S. healthcare system and the strengths of a single-payer approach. The United States has higher infant mortality than countries with universal healthcare, he says. American life expectancy is 37th in the world, tied with Kuwait and Chile. The U.S. health system ranks last in terms of “preventable deaths.” All of this is arguable, as we’ll see, but let’s assume for a moment that Kristof is correct.

Kristof then goes on to say:

There is one American health statistic that is strikingly above average: life expectancy for Americans who have already reached the age of 65. At that point, they can expect to live longer than the average in industrialized countries. That’s because Americans above age 65 actually have universal healthcare coverage: Medicare. Suddenly, a diverse population with pockets of poverty is no longer such a drawback.

Is America’s better life expectancy at 65 necessarily because retirees have universal coverage through Medicare? Or might it be—again assuming all of Kristof’s horrific health statistics are meaningful—that only the very healthiest Americans survive to 65 after running the gauntlet of our survival-of-the-fittest healthcare system? This is survivorship bias in its most literal sense. Kristof here makes an elementary error of logic.

Moreover, we do know, for instance, that infant mortality has a lot more to do with social factors such as low birth weight than it does with healthcare systems. We also know that life expectancies are affected by eating and smoking habits, violent crime, automobile deaths, and other factors besides healthcare. Robert Ohsfeldt and John Schneider adjusted life expectancy statistics to account for deaths relating to these kinds of factors, finding that, instead of the middling ranking Kristof reports, the United States has the highest life expectancy in the world. Likewise, economists June and Dave O’Neill of Baruch College, in a comparison of the U.S. and Canadian health systems, concluded that “that the efficacy of healthcare systems cannot be usefully evaluated by comparisons of infant mortality and life expectancy.”

The University of Pennsylvania’s Samuel Preston and Jessica Ho also looked at these issues, finding:

Life expectancy in the United States fares poorly in international comparisons, primarily because of high mortality rates above age 50. Its low ranking is often blamed on a poor performance by the healthcare system rather than on behavioral or social factors. This paper presents evidence on the relative performance of the U.S. healthcare system using death avoidance as the sole criterion. We find that, by standards of OECD countries, the U.S. does well in terms of screening for cancer, survival rates from cancer, survival rates after heart attacks and strokes, and medication of individuals with high levels of blood pressure or cholesterol. We consider in greater depth mortality from prostate cancer and breast cancer, diseases for which effective methods of identification and treatment have been developed and where behavioral factors do not play a dominant role. We show that the U.S. has had significantly faster declines in mortality from these two diseases than comparison countries. We conclude that the low longevity ranking of the United States is not likely to be a result of a poorly functioning healthcare system.

Others at the American Enterprise Institute and elsewhere are better qualified than I to assess all of Kristof’s claims on the quality of U.S. healthcare. But given the errors of logic and statistics so far, I wouldn’t take his column all that seriously.

Substance notwithstanding (to be sure, it’s awful), the updated healthcare reform bill being pushed by the House Democratic leadership contains inflammatory language that makes no pretense of objectivity or decorum. Here are two examples that appear early in the bill’s 1990 pages:

Section 101 calls for the immediate establishment of a federal high-risk pool to offer subsidized health insurance for uninsured people with pre-existing health conditions. It includes a subsection entitled (p. 20) “Protection Against Dumping Risks by Insurers.”  A dispassionate and decorous alternative would be: “Prevention Against Subsidized Rates Attracting Currently Insured People.”

Section 104 calls for immediate federal regulation of health insurance rate changes. It’s entitled (p. 31) “Sunshine on Price Gouging by Health Insurers.” A dispassionate and decorous alternative would be: “National Regulation of Health Insurers’ Rate Changes.”

If the issue of healthcare reform were not so serious, it would be difficult to take this stuff seriously. As it stands, the inclusion of such language in the House bill is, for lack of a better word, frightening.

In addition to Scott Gottlieb’s WSJ op-ed today on why there is a shortage of H1N1 vaccines, take a look at this video:

Earlier, I wondered about the fate of private “Healthcare Sharing Ministries” such as Samaritan Ministries International under healthcare reform. I have now learned that these organizations are treated differently in different ObamaCare proposals floating around Congress. At the moment, there’s an exception for them in the “conceptual language” of the Baucus plan passed by the Senate Finance Committee. Here’s how the Alliance of Health Care Sharing Ministries explains it:

The [Baucus] plan would require individuals to obtain health coverage or pay an annual penalty depending on their income level, though some exemptions are available. Businesses with 50 or more employees that do not offer coverage will be required to reimburse the government for tax credits given to employees purchasing their own insurance. At present there is language that recognizes healthcare sharing ministries as coverage under a individual and employer mandate.

That’s a glimmer of hope. However, neither the proposal in the Senate HELP committee nor the three House versions have such exemptions. And there’s no telling whether these sharing ministries will be exempted in any final bill sent to the president. I plan to follow the fate of these exemptions closely.

In some ways, how these organizations fare may be a litmus test indicating just how intrusive ObamaCare will be.

According to a September 2009 Census Bureau report “Income, Poverty, and Health Insurance Coverage in the United States: 2008,” there were 46.3 million uninsured Americans in 2008, up from 45.6 million in 2007.

The chart above shows the household income levels of those 46.3 million uninsured Americans (from Table 7 in the report). There are 9.7 million uninsured Americans living in households making $75,000 per year or more, and this represents more than one out of every five uninsured (21 percent of the total). There are 8 million Americans without health insurance in households making between $50,000 and $75,000, representing 17.3 percent of the uninsured. With those two groups combined, 38.3 percent of Americans without health insurance (17.7 million people) lived in households with $50,000 or more of household income in 2008.

With $50,000 or more in household income, wouldn’t many or most of those 17.7 million uninsured be without insurance voluntarily? That is, couldn’t most of those households afford health insurance?

Alternatively, with those income levels (especially the 9.7 million with household income above $75,000), couldn’t many of those households choose to forgo health insurance in favor of being “self-insured,” at least for routine health procedures? Given the widespread availability of more than a thousand convenient and affordable retail health clinics around the country at Wal-Mart, Target, CVS, and Walgreens, these households could easily be on the “pay-as-you-go” model of self-insurance for healthcare, at least for routine medical services.

And for protection again major medical expenses, various individual Blue Cross Blue Shield plans are currently available in the District of Columbia as one example (rates vary around the country), starting at only $60 per month for a 25-year-old, $74 per month for a 35-year-old, $102 per month for a 45-year-old, and $158 monthly for a 55-year-old. These quotes are for the most affordable, high-deductible plans, with dozens of other plans available with lower deductibles and more coverage at higher monthly premiums. But it’s an important point that affordable, basic health insurance is currently available in the United States at about the same cost as a monthly cell phone or cable TV plan.

With Congress inching ever closer to taking over healthcare, I wonder what will happen to private, religious ministries that offer alternatives to ordinary health insurance? Frankly, I’d be surprised if members of the Senate Finance Committee even know such organizations exist. In any case, I seriously doubt they will qualify under the mandate to buy health insurance. That requirement alone might kill them.

One example of a private alternative to health insurance is the Samaritan Ministries International. The ministry doesn’t describe its work as insurance, which is probably wise, since that may help it avoid government meddling. But they also don’t call it insurance because the entire operation is understood as a way for fellow Christians to share with each other in time of need, rather than simply spreading risk around or pre-paying for routine health expenses. Sure, it fulfills many of the functions of health insurance, but it also encourages prayer, the role of the local church, interpersonal communication and accountability among members, initiative, and a charitable spirit. (Here are the details on how it works.)

Groups like Samaritan Ministries International should be part of the public discussion over healthcare “reform.” Apparently, ABC World News did do a story on the organization at the end of September, but they didn’t do it justice.

At the moment, I don’t know enough about the organization to recommend it one way or the other. I’m just citing it as one example of what religious and other private groups can do, of what they could do in thousands of unanticipated and competing ways, if we had a free market for healthcare—free from political posturing and false moralizing. Instead, I fear that a few years from now, the Big Nanny will be cradling all of us, nice and tight, and even these little sparks of private initiative will have been extinguished.

Charles Murray has a good and powerful point. The appeal of universal mandatory health insurance is to expand the risk pool to all, and getting young healthy people as part of that pool is essential, in part to help pay for the costs of creating universal coverage with some subsidies for lower income and lower-middle income people. As the Senate Finance Committee grappled with two dilemmas—meeting the Congressional Budget Office tests of fiscal neutrality, and making sure families earning $65,000 or less were not put into impossible situations (insurance premiums beyond their means, even with subsidies, but a huge penalty of several thousand dollars if they did not get insurance)—they tried to resolve them by covering only 94 percent of the population and by reducing the penalties sharply. I am not as convinced as Charles that young people, faced with buying insurance at the low rate available for young single people or paying several hundred dollars in a penalty if they don’t, will all refuse to buy insurance. But it is clear that some adjustments have to be made.

No sooner did the Senate Finance Committee pass the chairman’s initiative than the calculus began to make a credible bill representing the two Senate bills already passed. On the eve of passage, America’s Health Insurance Plans released a study by PriceWaterhouseCoopers finding that premium increases by 2019 will be $4,000 more for families. MIT economist Jon Gruber returned the serve for the White House with his own report. PWC has subsequently scaled back their assessment.

I’ve run the ARCOLA micro-simulation model to provide some estimates of what may happen under a re-emergent public option combined with low fee mandate fines. My results are similar to Gruber’s except I find annual increases could run as high as 10 percent or as low as 5 percent, depending on minimum benefit design and the use of high deductible health plans to hold costs down as a worse case scenario.

However, I remain less convinced the cost control mechanism in the bills will work because the track record of the administration, however early, is not great. The Senate’s Committee on Health, Education, Labor, and Pensions bill has 732 instances mentioning the Health and Human Services Secretary “will” or “shall coordinate,” etc. That is a lot of discretion for political appointees to execute and manage/coordinate/tame our nation’s health insurance programs.

Take the Centers for Medicare & Medicaid Services (CMS) administrator post. I would find it far more credible that the administration will bend the cost curve down if a CMS administrator had been appointed nearly 9 months post inauguration (a record), and if 70 percent of other CMS posts weren’t vacant (also a record). Assuming nearly $800 billion spent on Medicare and Medicaid for an annualized 2009, each day past the president’s inauguration, $2.2 billion has been spent (with 55%+ for Medicare alone) without a leader. The civil service running such an endeavor deserve gold stars. Yet, it is inconceivable that an enterprise that is larger than any Fortune 500 firm in terms of cost outlays, let alone the revenues of No. 1 Wal-Mart and No. 2 ExxonMobil combined, is running without a chief.

Tell you what, if there is administrator appointed by Thanksgiving, I’ll revise the ARCOLA simulations to take into account that there is someone around to at least touch the curve, let alone bend it.

Arcola estimates here:

Small Group Insurance

The private small group insurance market will have an increase in premiums in the second through fourth years given the likely competition in prices it will face from the public option plan. Assuming expenditures of 5 percent of Medicare payment rates lower the actuarial cost of the public option plan compared to private insurance competitors, most small group coverage will likely have 8 percent increases year over year through 2015. If the small group insurers switch predominantly to a high deductible insurance plan design, the cost increases could be 5 percent or less depending on that design’s market penetration.

Large Group Insurance

As found in ARCOLA simulations, the public option will crowd out some of the large group market if left without any restrictions. Assuming the level of take-up occurring in the public option is no more than 6 million covered lives in an approximately 120 million person market, insurance premiums will likely increase by 8 percent to 10 percent in years two through four (2014 to 2016) until the market stabilizes. Again, if employers switch to high deductible health plans as the dominant form of coverage, they will compete head to head with public plan premium increases and could reduce take-up in the public plan. Much will depend on how regulated the high deductible plans will be and what will be the minimum benefit set through new regulation following health reform.

Individual Insurance

This market will be the most volatile as it will be in direct competition with the public plan. If the private insurers move to mostly a high deductible health plan designed to compete with the public plan and are allowed to do so in the exchanges, they will be competitive with the public plan and have increases of 5 percent per year or less. If high deductible plans have additional requirements they will be less competitive and will become more like traditional coverage with lower cost sharing. Consequently, they will have premium increases of about 6 percent to 8 percent.

As we move one step closer to a healthcare bill introduced on the Senate floor, the American people should remind President Obama of the promises he made. Already, President Obama has contradicted a number of assurances he gave to the American people:

1. President Obama promised not to raise taxes on the middle class.

Contradiction: The middle class will be hit with $2 billion in “penalties.” The Congressional Budget Office (CBO) estimates that there will $2.8 billion in penalties for those who do not purchase healthcare, $2 billion of which will be paid by taxpayers earning less than $120,000 for a family of four.

2. President Obama promised not to add one penny to the deficit.

Contradiction: The House version of the healthcare bill will add an estimated $239 billion over the next ten years.

3. President Obama promised that if we liked our current healthcare plan, then we will be able to keep it.

Contradiction: The healthcare plan will cut Medicare Advantage benefits by half.

4. President Obama promised that if you like your current doctor or hospital, you will be able to keep them.

Contradiction: The healthcare plan will force doctors and hospitals to increase patient volumes to make up for Medicare cuts, and thus reduce patient access.

5. President Obama promised that no government bureaucrat will stand between patients and doctors.

Contradiction: Senator Baucus’s version of the healthcare plan would create an “Independent Medicare Commission” that would be able to deny benefits to the elderly or disabled based on a calculation of costs versus benefits.

6. President Obama promised to “slow the growth of healthcare costs for our families.”

Contradiction: The Senate version of the healthcare bill will tax medical technology companies and drug makers that will increase the cost of everyday healthcare devices such as pacemakers, eyeglasses, hearing aids, and powered wheelchairs.

Read more promises and contradictions in my Human Events newsletter here. The American people should remind President Obama of his promises, and ask him if he will veto a healthcare bill with so many contradictions.

We’ve heard a lot from Catholic activists and bishops on healthcare reform, but we haven’t heard much from those with the practical knowledge to weigh in on the subject informatively, such as Catholic physicians. In its current issue, The National Catholic Register has a good article interviewing physicians affiliated with an organization called the Catholic Medical Association. Raymond Arroyo interviewed the executive director and president of the organization last Friday on EWTN (the Catholic TV station).

They make it clear that abortion is not the only issue that Catholics should focus on when considering ObamaCare. In fact, they suggest that abortion may be used to distract Catholics. They speculate that legislators may do something to make it appear that tax money won’t pay for abortions, perhaps at the last minute, in order to get sign-off from Catholics and others who would otherwise have misgivings.

Also important in the debate, they argue, is the principle of subsidiarity. (The concept is often identified with Catholic Social Teaching, but is also present in Protestantism.) It’s a big word for a simple idea. It has two parts: (1) the institution closest to a problem has primary responsibility for the problem, and (2) only when that institution with the closest jurisdiction breaks down should institutions in a larger jurisdiction assume responsibility. So I have a more basic responsibility to feed myself and my children than does the city, the state, the federal government, or the UN. When the state violates that proper order and arrogates responsibility to itself, preemptively, it does violence to an important web of social relations. The entire interview is worth watching. (It starts about 12 minutes into the one hour episode.)

My own view is that a federal government takeover of our healthcare is about as big a violation of the principle of subsidiarity as you can get. The president and his congressional allies are presenting the last-resort option as if it were the only option.