Monday, November 17, 2008

The Obama plan will kill choice

The Washington Post has a lengthy front-page story today on Barack Obama’s health care plan, which the newspaper admits contains “profound — and controversial — changes.” The Post tries to compare the Obama plan to Massachusetts’ 2006 health care legislation, asserting the only difference between the two is the individual mandate in the Massachusetts plan. This is indeed a big difference between the two plans, but it is nowhere near the most important. For all of its other problems, the Massachusetts plan did not create a new government-run health care plan that would compete side by side with private insurance plan. Obama’s plan does.

Why is this important? Because not only would the federal government be an active competitor in the health care market, but it would also set the rules for competition. Heritage’s Center for Health Policy Studies Director Robert Moffit explains what would happen next:
The likely incentives for government officials would be to set rules to advantage the government’s own health plan and to disadvantage the private health plans, including setting the government’s health plan premiums artificially low, reducing or eliminating cost-sharing requirements, or more heavily subsidizing certain benefits to make the government health plan more attractive than the private health plans. These plans would operate without incurring any of the normal financial risks that private health plans must bear.

One could easily imagine a massive crowd out of private coverage, as employers dropped private coverage and paid the requisite tax. Likewise, lobbyists for businesses or private insurance industry executives may see the government health program as a convenient “dumping ground” for high-risk individuals or families, which would reduce business and insurance industry costs but would amount to massive adverse selection against the taxpayers. … In such a political environment, the value of personal choice and anything at all resembling free market competition would mostly likely be rendered meaningless.

Obama’s preference for socialized medicine is no secret. He openly admitted earlier this year, “If I were designing a system from scratch, I would probably go ahead with a single-payer system.” The question for Obama and the left is not whether socialized medicine is desirable. They want socialized medicine. The problem Obama is trying to solve is how best to trick the American people into a policy they do not want. Obama’s health plan is the answer to that problem. Just ask New York Times columnist Paul Krugman: “The Demoplans offer choice — so that people won’t feel that they’re being forced into a government plan. Over time, I suspect, many people will choose the government plan or plans — but they’ll have the option of staying with those wonderful people from the private insurance industry.”

Krugman is undoubtedly right. But not for the reason he states. The government plan will not win because people love socialized medicine (as Krugman recently learned), but because Congress will strangle the private market to death so the American people have no choice. These are the policy options the American people are about to face. It’s high time papers like The Washington Post begin accurately reporting on them.


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