The Baucus death spiral

inDECATUR posts mostly about Decatur, but sometimes posts on matters which impact Decaturites.

By James C. Capretta for NRO

Democrats understand how dangerous the PriceWaterhourseCoopers study is to their effort to pass a health-care bill because it exposes a crucial and irrefutable flaw in the health-care plan approved this week by the Senate Finance Committee.

And what is that flaw? In short, the plan sponsored by Finance Committee Chairman Max Baucus would almost certainly lead to a death spiral in many private health insurance markets.

What Democrats should be doing is working with Republicans on a sensible plan to gradually introduce reforms that would inject more market discipline into the health sector, thus making coverage more affordable for everybody. If, however, they insist on trying to pass something like the Baucus plan instead, they should be informed of the consequences, whether they like them or not. As matters stand now, if the Baucus bill were to become law, in a couple of years Congress would be forced to take up the issue again to clean up the mess the bill will have created.

One of the major justifications for health care reform is the spiraling costs of health care. But the PWC study says costs will go up EVEN faster after the proposed reform: