Friday, June 26, 2009

The real crisis is Obamacare

President Obama has never met a crisis he didn't love; particularly the ones that involve spending trillions of dollars. What fun it is to propose programs that involve borrowing or taxing Americans to death.

On June 9, the Associated Press reported, "President Barack Obama on Tuesday proposed budget rules that would allow Congress to borrow tens of billions of dollars and put the nation deeper in debt to jump-start the administration's emerging health care overhaul."

Since the stealth heathcare "reform" that Bill and Hillary Clinton tried to foist on Americans during the 1993-94 Congress, this "crisis" has been off the radar screen of Americans who have the audacity to think they should decide whether and how much health insurance they want, and to expect healthcare that is not rationed on the basis of how old they are and other factors determined by some faceless government bureaucrat.

Liberals obsess over healthcare options because, of course, they want "fairness" no matter how much it will cost Americans in general and the economy in particular.

To that end, various "progressive" (liberal) groups have gotten together and have launched an $82 million campaign to support President Obama's healthcare program. The umbrella for this massive public brainwashing is called Health Care for America Now. Why is it that everything Obama wants has to be done "now"? Oh yes, I forgot. It's a "crisis." Health Care for America is directed by Richard Kirsch and has been joined by the AFL-CIO,, and Democracy for America, a group founded by former Democrat National Committee Chairman, Howard "the scream" Dean. The group is essentially a re-branded version of liberal lunatic groups.

An excellent analysis of Obamacare has been published by the Cato Institute in a May 21 Policy Analysis (No. 638) titled, appropriately, "Seven Bad Ideas for Health Care Reform." Authored by Michael Tanner, it points out some very ugly truths.

* At the time of rising unemployment, the government would raise the cost of hiring workers by requiring employers to provide health insurance to their workers or pay a fee (tax) to subsidize government coverage.

* Every American would be required to buy an insurance policy that meets certain government requirements.

* A government-run plan similar to Medicare would be set up in competition with private insurance.

* The government would undertake comparative-effectiveness research and cost-effectiveness research and use the results to impose practice guidelines on providers, initially in Medicare and Medicaid, but ultimately extending the rationing to private insurance plans.

* Private insurance would face a host of new regulations.

* Subsidies would be available to help middle-income people purchase insurance while expanding Medicare and Medicaid.

* Finally, the government would subsidize and manage the development of a national system of electronic medical records.

According to a June 8 Bloomberg News report, "President Barack Obama wants Congress to consider taxing the wealthy instead of workers to pay for a health-care overhaul." This is yet one more lie by the Obama administration in the run-up to impose the most vile form of government control over everyone's lives imaginable.

The American Medical Association, the nation's largest physician organization, has let it be known that it will oppose creation of a government-sponsored insurance plan.

The promise of the Declaration of Independence that everyone has a right to life, liberty and the pursuit of happiness will be rendered meaningless by Obamacare if your life depends on government policies regarding healthcare.

A June 1 Business Week commentary pointed out that "there are only three ways to pay for universal coverage: Raise taxes, cut payments to medical providers, or ration care." All three are the worst possible options imaginable.

"The Congressional Budget Office estimates that covering the uninsured could add anywhere from $1 trillion to $2 trillion to the federal budget over ten years," said the BW commentary. "On top of that, government economists expect Medicare to run out of money in 2017 if current spending trends continue."

Here's a handy tip regarding estimates by government economists. Multiply them by a factor of ten! As this healthcare horror awaits its run through Congress, think of it as a massive Medicare, the government program for seniors that cost 3.2 percent of the country's Gross Domestic Product in 2008 and which will become insolvent this year! Medicare faces $34 trillion in unfunded liabilities; the cost of services for which seniors are eligible in the future. According to the Medicare Trustees, the program will require a 134 percent increase in the payroll tax paid by every working American in order to remain solvent!

And this insane Democrat-controlled Congress wants to expand on Medicare while requiring everyone to purchase healthcare insurance, even if they don't want to. Then it will compete against existing private insurance companies without having to have the funds in place as they must to meet their obligations.

This isn't healthcare reform. It is the destruction of the best healthcare system in the world. It is the destruction of the nation's economy. It, along with the tax on energy use, must be stopped. We are being attacked by one "crisis" after another when the only one that matters is the restoration of the full faith and credit of the U.S. dollar. If the "health" of the U.S. dollar is not restored, nothing else will matter very much.


Rhetoric vs. reality in the health care debate

Half-truths about "rationing"

Last week, the Democratic leadership in the House of Representatives unveiled their discussion draft of a sweeping bill to reform America's health care system. The bill would create health insurance exchanges and a government insurance scheme, require insurers to sell insurance no matter a purchaser's health status, set minimum benefit standards, subsidize insurance purchases to families up to 400 percent of the federal poverty level ($43,000 for an individual or $88,000 for a family of four), mandate that all Americans carry health insurance, and impose price controls on what doctors and hospitals may charge. The Democratic leadership hasn't the faintest idea what its reform proposals will cost.

The draft bill also would establish a public-private Health Benefits Advisory Committee to recommend covered benefits and an essential benefits package. This is the only section of the bill that mentions the word "rationing." It declares that "the Committee shall take into account innovation in health care and ensure that essential benefits coverage does not lead to rationing of health care." Of course, it would be helpful to know what the bill means by "rationing."

Earlier in the week, New York Times economic columnist David Leonhardt set out to explain what rationing is. First, let's acknowledge that Leonhardt does identify many dysfunctional aspects of our current health care system, including how we reimburse primary care physicians and specialists.

But in the article, Leonhardt claims that "health care rationing rhetoric overlooks reality." Leonhardt asserts that health care is already being "rationed." Since this is so, those who warn against proposed government health care rationing, according to Leonhardt, are either confused or liars. Such people, Leonhardt explains, are deploying "a clever set of buzzwords that tries to hide the fact that societies must make choices." The phrase "societies must make choices" is the first hint of how confused Leonhardt is about the concept of rationing. Rationing is all about who gets to make those choices.

Leonhardt goes on to cite what he thinks are three supposedly telling examples of rationing. "We ration spots in good public high schools. We ration lakefront homes. We ration the best cuts of steak and wild-caught salmon," he writes. Which one of those examples doesn't fit? Figuring this out is another key to Leonhardt's misunderstanding of the debate over health care rationing.

Next up he cites the dictum of one of capitalism's great defenders, economist Milton Friedman: "There is no such thing as a free lunch." True. But Leonhardt follows up this insight by writing: "The choice isn't between rationing and not rationing. It's between rationing well and rationing badly." Does Leonhardt think that lakefront homes are rationed badly? Steaks? Or for that matter clothing, restaurant meals, shoes, cars, computers, or airline tickets?

Moving beyond lakefront homes and steaks, Leonhardt eventually gives readers three examples of current health care "rationing." The first example is that employers are forced to decide between paying higher wages or providing higher health care benefits to their employees. He notes that the tradeoff between wages and benefits is often "invisible" to employees and thus it appears to them that their compensation is not increasing much.

Of course, the way to avoid this kind of "rationing" would be to just pay the employees all their money and let them buy their own health insurance. Thus health insurance would become "rationed" just the same way that we ration cars and cellular telephones. Allowing consumer choices in health insurance and health care will also help drive down prices and increase the range of health insurance products in just the same way consumer choice operates in other areas of our economy.

The current provision of medical care to the uninsured is Leonhardt's second example of rationing. This example is closer to the mark since health care for the uninsured is already mandated and/or paid for (Medicaid and SCHIP) by federal and state governments. He notes the poor quality of care that such people receive without musing for a moment that such poor government-funded care might be a harbinger for what "universal" health care would become.

Leonhardt's third alleged example of current health care rationing is the "failure to provide certain types of care, even to people with health insurance." The fact that certain health insurance policies chosen by individuals and/or their employers don't cover certain treatments is no more "rationing" than it is when people choose not to eat a USDA prime steak or pay tuition for a private college education.

On the other hand, Leonhardt is right to say that our dysfunctional health care system misses opportunities to offer good treatments to people in need. The current system misses those opportunities, in part, because there is so little competition and thus very little incentive for health care providers to supply information to consumers. Consumers can competently choose between complicated computer technologies and evaluate automobile performance because competitors are motivated to supply consumers with relevant information. The same kind of competitive dynamic could work with the provision of health care and health insurance.

So if Leonhardt gets it so wrong, what is rationing? Leonhardt is correct when he writes, "In truth, rationing is an inescapable part of economic life. It is the process of allocating scarce resources." The crucial question that Leonhardt misses is that "rationing" depends on who is allocating the scarce resources. It's not rationing if an individual decides to spend his money on a 16-ounce steak—but it is rationing if he can only purchase a USDA prime rib eye when he has a coupon issued from a government agency. In other words, true rationing occurs when individuals are forbidden from spending their money on products or services they want to buy.

Imperfect as private health insurance markets are, if a customer doesn't like the decisions made by Blue Cross Blue Shield, Kaiser Permanente, or Golden Rule insurance bureaucrats, he can look elsewhere for his health insurance coverage. But if the government health care scheme becomes a monopoly, when the bureaucrats at the new Health Benefits Advisory Committee decide that a treatment should be withheld, that treatment will be withheld. That's rationing.

"Americans should get the first chance to limit their own health spending," Rep. Jim Cooper (D-Tenn.) observed recently. "Once they learn the true cost of what they are buying, share a larger portion of the cost, and can judge the benefits—if any—of treatment options, then they will choose more wisely than the government." He's right. Congress should think about "rationing" health insurance and health care the old-fashioned way—through the market.


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