In just 90 seconds this new health reform video highlights the upside-down priorities of Oregon’s Medicaid system. Lobbying groups have used the political process to push coverage for special-interest causes. This video is based on research Linda Gorman, Director of the Health Policy Center at the the Independence Institute. Read about politicized health care rationing in Oregon here.
In response to the question: “As Congress debates health care reform, tell us what — if anything — you think should be changed about the U.S. health care system?”
Having a health care “system” is itself the problem. It implies that politicians dictate your medical choices, at your expense, regardless of whether their “system” serves your individual needs and preferences.
Consumers are frustrated with the low-quality politicized school systems and the regularly-jammed highway systems. We are quite pleased with our iPods and laptops. But there is no government-run consumer electronics “system”; instead, there’s a relatively free market. A free market would do the same for medicine.
But politicians have imposed their will upon what should be individual medical decisions, resulting in an un-free market. The tax code punishes you for not buying insurance through your employer, so you’re stuck with your employer’s few options. This coddles insurance companies, who are accountable to your employers instead of you. Politicians manipulate the tax code so we buy excessive insurance coverage, which discourages both price competition and prudent medical spending.
Politicians forbid us from buying more affordable insurance available to residents of other states. They force us to buy expensive policies loaded with mandated benefits many customers don’t want. They force taxpayers to fund Medicaid and Medicare, which cause medical inflation, increase insurance premiums, and will bankrupt the country.
Politicians empower the FDA to enforce a default ban on all new drugs, which stifles innovation and deprives patients of life-saving medications.
Politicians should not dictate your medical and insurance decisions, you should. Only a free market empowers patients in this way, requires makes insurers and physicians to be accountable to them.
This was originally published in the Daily Camera (Boulder, CO) on July 18, 2009.
This video by the Independence Institute shows one downside we can expect from a nation-wide mandate that we all buy insurance — as politicians define it.
For more on why and how the “Massachusetts Model” would drive up costs and lead to political rationing of medical care, see here.
“The ‘public plan’ will be the only plan” says health care economist Scott Harrington of the proposed government-run health plan. Be suspicious: “public plan” supporters want it to be the only plan.
President Obama uses rhetoric of “choice” and “competition” to push the “public plan.” But he has declared his ideal to be single-payer health care, where — by definition — a government monopoly prohibits both choice and competition.
If “public plan” supporters honestly wanted choice and competition, why do they oppose policies that would make Medicaid and Medicare compete? For example, vouchers that Medicaid and Medicare recipients can use to buy commercial insurance. Or better yet, allow taxpayers to opt out of funding these programs by getting tax credits for donations to comparable charities.
A “public plan” would not even compete fairly with insurance companies. It would have access to tax dollars, and many other advantages. As Professor Harrington concludes, “equal competition between a government health-insurance plan and private plans would be impossible.”
If a government health “program were to be stripped of any special advantages it would cease to be a government program. It would be just another private insurer,” writes Michael Cannon of the Cato Institute.
If politicians truly want more competitive insurance markets, they should remove the tax code’s bias for employer-provided insurance, which shields insurers from competing directly for patients’ business. But politicians covet votes most. Since the biased tax code empowers unions, Democrats are not likely to touch it without giving unions special treatment.
This was published in the Boulder Daily Camera on July 4, 2009.
President Obama is either misinformed or lying about health care. He said the “free market has not worked perfectly.” There’s a market, but it’s not free. It’s infested with harmful political meddling. One example is government’s favoring employer-provided insurance, a poison to affordable medical care and insurance.
But unions and Congressional Democrats want to intensify the dose with a “pay or play” employer mandate. This would penalize employers for not buying medical insurance for their employees. This is not “reform;” it just entrenches flawed policies. It would violate rights, lower wages, and threaten jobs of minority single moms
Government’s favoring employer-sponsored insurance is the problem, not the solution. When your employer buys your insurance, it’s a non-taxable corporate expense. Employers save by “paying” you with insurance instead of higher wages.
This tax policy coddles insurance companies. They need only please your employer, not you. Most employers offer just one or two plans. Want more choices? If you prefer one of the many plans available at eHealthInsurance.com, you face a stiff tax penalty. Or try changing jobs. Insurers know you’re essentially stuck with your employer’s plan, so why should they please you?
Tax-discounted insurance has turned insurance into prepaid health care. If car insurance worked this way, it would cover predictable expenses like oil changes and replacement tires. You wouldn’t price compare or consider whether services were really necessary. Rather, you’d ask if “it’s covered.” Costs would soar. This has happened with medical care.
The tax bias for employer-sponsored insurance punishes those who incur medical conditions and then lose their job. A pre-existing condition can make them uninsurable.
This can create “job lock,” which stifles entrepreneurship. As Business Week describes: “fear of losing coverage keeps people at jobs .. . so many workers will keep hanging on to jobs they hate. … One single mom in New York, for example, is sticking with her graphic design job solely to retain the health coverage for herself and her son. … Her wish? To start a business doing bath and body products. ‘I feel stuck,’ she says.”
An employer mandate would further stifle entrepreneurs and destroy jobs. It would require a growing business to provide insurance when hiring its 10th or 20th employee. Since the additional employee would impose a huge cost, it might not hire anyone.
In response to an employer mandate, employers would shift this cost to employees by lowering wages. It’s worse for those with near-minimum wage jobs. These workers are “at substantial risk of unemployment if their employers were required to offer insurance,” write economists Katherine Baicker and Helen Levy. Employees “most harmed by mandated employer-paid healthcare are…more likely to be a minority, a single parent, and unmarried.” The employer mandate surely wouldn’t threaten union jobs, as unions support it.
An employer mandate would also violate our rights. Employers create jobs, and hence have the right to hire on terms mutually acceptable to both employer and employee. Politicians should not interfere with this private matter between consenting adults.
Tax-favored employer-sponsored insurance has created enough problems. Mandating it makes them worse. Politicians should not dictate whether you buy insurance directly from an insurer, through a membership group (like AAA), or through your employer. Legislators should both eliminate the tax exemption and decrease tax rates commensurately.
Second-best would be to make all medical insurance and expenses tax-exempt. This would remove tax bias toward excessive insurance coverage. Health Savings Accounts are a step in this direction, but they should be eligible to everyone, regardless of their insurance plan. Such “Large HSAs” would allow consumers to buy medical care and insurance with tax-free earnings.
Removing the tax code’s bias for employer-sponsored insurance can alleviate problems with job lock and pre-existing conditions. While some employers would offer insurance to attract employees, more people would buy policies directly from insurers when still healthy. Customers could choose — as many already do — a guaranteed-renewable policy, so the insurer cannot terminate coverage or raise premiums because you get sick.
The rigorous competition of a free insurance market could yield innovative products that protect against pre-existing conditions. For example, “health-status insurance” would pay for increases in your insurance premiums should your health status change, and you’d retain the freedom to buy a policy from insurers competing for your business. To learn more, look up “‘Health Status Insurance’ Provides Real Alternative to Universal Care.”
Mandating employer-sponsored insurance is wrong. It’s not a cure, but more of the disease: government’s bias for employer-provided insurance. This just benefits unions and politicians at our expense.
This was published in the Boulder Daily Camera on June 28 2009.
Remember this about politically-controlled health care: “coverage” does not guarantee care. Not just in Canada and England, but in Massachusetts, where everyone must buy insurance — as politicians define it.
Last week the New York Times reported that while more Massachusetts residents gained coverage in the past year, “one in five adults has been told … that a doctor or clinic was not accepting new patients or would not see patients with their type of insurance.” Rejection rates for people with government insurance were twice the rate as those with commercial insurance.
Nor has mandatory insurance helped strained ERs. The Times reported “little change in the use of emergency rooms for non-emergency treatment.”
As with Medicaid and Medicare, Massachusetts faces escalating costs and political rationing of treatment. The Times reported that the plan will “not be sustainable” without “significant steps to arrest the growth of health spending.” A chief administrator spoke of “limiting resources for people doing really good stuff.” The lesson: empowering government to run health care empowers it to deny you care.
Yes, insurance companies are frustrating. But don’t blame “the free market;” it’s not free. Consider the tax code, which shackles us to our employer’s plans by discounting employer-provided insurance. This pro-insurer bias limits competition and makes insurers accountable to employers, not patients. It amplifies the threat of pre-existing conditions. It disfigures real insurance into prepaid health care, which encourages over-consumption of treatment that increases costs.
For better health care, demand more freedom, not more political controls.
This was published in the June 6 2009 Boulder Daily Camera.
The Daily Camera published my thoughts on Colorado HB 1293:
Prepare For More Expensive Medical Insurance: the Senate Finance Committee has approved Colorado House Bill 1293. The Denver Post claims that this bill would reduce your insurance premiums. Not so. They will increase.
The Post claims HB 1293 would “increase the number of those covered by government insurance and thereby reduce cost-shifting” from the uninsured and under-insured. Sure, this cost-shifting increases premiums costs. But the cost-shift from those with government insurance far exceeds that from the uninsured.
In Colorado, the cost-shift from the uninsured increases annual premiums by $85 per insured Colorado resident. For the data behind this, search on-line for “uninsured cost-shift scam.” Compare this to Medicare and Medicaid: Bloomberg recently reported that “Medicare and Medicaid increase the annual cost of covering a family of four by $1,788.” As if the taxes we must pay to fund Medicare and Medicaid weren’t enough.
If politicians want more affordable insurance they should repeal prohibitions that make it so expensive. For example, HB 1256 would allow Coloradans to buy insurance available in other states. In four states average annual premiums for individual plans cost $500 less than in Colorado. For family plans the potential savings increases to $1,000 in five states, according to America’s Health Insurance Plans.
Government-controlled health care in the U.S. is a disease masquerading as its own cure.
The Denver Business Journal published the following letter of mine in its March 6 edition:
Colorado House Bill 1256 would bring affordable insurance to thousands of Coloradans by allowing them to buy less expensive policies available in other states (Health Care, Feb. 19). Consider the average annual premium costs for non-group policies. According to America’s Health Insurance Plans, in four states the costs are $500 less than in Colorado. The savings is more for family plans: In five states costs are $1000 less than in Colorado.
Opponents of a similar bill proposed last year claimed healthy consumers who bought out-of-state policies would increase premiums for others. True or not, this reveals the effect of Colorado’s insurance mandates and price controls: they bundle medical insurance with politically-mandated charity. Never mind that these controls increase premium costs and the number of uninsured.
But we have the right to buy insurance and give to charity as we see fit, without political mandates and prohibitions. Politicians should not forbid Coloradans from buying more affordable insurance available in other states. Colorado House Bill 1256 recognizes this.
Politicians cannot guarantee healthcare, but by trying they can create an unaccountable and toxic insurance monopoly. So beware of Colorado House Bill 1273, which will be heard by the House Business Affairs and Labor Committee on March 18. The Rocky Mountain News described this so-called “Colorado Guaranteed Healthcare Act” as a “Canadian-style, single-payer” bill. A recent <a href="http://www.healthcareforallcolorado.org/candidates_2008/answers.php”>survey finds that nearly one in four state House members advocate single-payer healthcare. Their support of such politically-controlled medicine is appalling.
The Denver Post published my letter on Thursday:
New insurance law wastes taxpayer dollars
Re: “The governor’s first two years; Two views of his energy level,” Jan. 4 Denver & The West story.
The Post reports that Gov. Bill Ritter “signed a law that … could result in as many as 50,000 more children being enrolled in state health- care programs.” Actually, most of the newly enrolled children already have insurance, and the program fosters government dependency.
The new law wastes tax dollars. Its net effect is to insure four kids for the price of insuring 10. How’s that? More than half of newly eligible children already have private health insurance, according to the Congressional Budget Office. The National Bureau of Economic Research estimates that “for every 100 children who are enrolled in public insurance, 60 children lose private insurance.”
Worse yet, programs like SCHIP discourage parents from advancing their careers and earning higher wages because they might forfeit their government benefits. Parents are thus caught in a “low-wage trap.”
Ritter shouldn’t force taxpayers to fund such a program while truly worthwhile charities could do better with voluntary donations.
