Let me start with the disclaimer that, from an ideological standpoint, I am a social conservative, a fiscal conservative, and very pro-business. I believe that, in general, less government involvement is preferable to more government involvement, and I do not believe that government has an intrinsic right to my money. Although these statements may give the impression that I am a radical libertarian, that is not the case. It just seems that the various initiatives from the current administration and congress (financial regulation, energy proposals, healthcare reform, etc.) illuminate just how wide the philosophical divide has grown.
There are many areas in the current healthcare debate where, I believe, we can find common ground. I certainly agree that health costs need to be contained. Also, the linkage between health coverage and employment is unfortunate. Providing health insurance as an employment benefit became popular following World War II when employers were trying to attract a limited number of workers. Unfortunately, this avenue of health care coverage has become too entrenched within our system. I very much hope we can get to a point where affordable health insurance with no exclusions for pre-existing conditions becomes available to all who want coverage regardless of employment status. I recognize that the universal coverage clause will require a mandate that healthy young folks participate in order for the insurance companies to manage the risk and still offer reasonable premium rates.
With regard to the current healthcare proposals being offered by the White House and the House of Representatives, I take exception with the plan from both the macro perspective and the micro perspective. From the macro side, I am very concerned about any expansion of a national healthcare plan because of the terrible way in which Medicare has been implemented. Medicare is woefully underfunded. Current projections are that Medicare will be bankrupt within 10 years. The amount of unfunded liabilities being piled up is staggering. Add to that the fact that Medicare so underpays medical providers that non-Medicare patients end up paying more for services to essentially make up for the shortfall. Many physicians refuse Medicare patients because payments are so low. A recent Wall Street Journal editorial noted that expanding a Medicare-like system to those under 65 is like an old Marx Brothers routine: “The soup is terrible and the portions are too small.” Overall, the idea of a new massive government healthcare entitlement program is not something I’m comfortable with at all.
From the micro side, there are serious concerns about the specifics of the current proposals. First, there is the cost and the method of paying for the program. The President estimates that the $900 billion price tag will be accounted for by cost savings and added revenues. He specifically indicated that he will not support a plan that adds to the deficit. The cost savings is supposed to be $470 billion from Medicare in the form of waste, fraud, and abuse elimination. Many previous administrations and legislators have searched in vain for this pot of gold and it has yet to be discovered. I doubt if such savings will materialize in this iteration.
There have been several suggested revenue generating proposals ranging from taxing the rich, to taxing health insurance benefits, to a fee levied on insurance companies for their high-end policies. I have issues with all of these proposals. The House bill includes the tax on high-income taxpayers. Currently, the top 1% of AGI taxpayers account for 40% of the tax receipts, and the top 5% pay 60% of the tax burden. I object to the “let’s tax the rich and fund a new entitlement” mentality. Furthermore, history has shown that increasing the tax rate doesn't necessarily increase revenue. Rich people don’t become rich by being easily separated from their money. Also, I’ve never received a job from a poor person. Needless to say, I also object to being taxed on my health benefits, and I believe that any surcharge levied on insurance providers will simply be passed along to the subscribers.
Finally, there is a whole collection of items that cloud the debate even further. One item is the notion that “if you like your current healthcare coverage, you can keep it.” Although this refrain is heard over and over, there is a part of the House bill that brings this statement into question (which is a more polite way of saying ‘you lie’). As noted in an earlier Wall Street Journal editorial:
The House bill says that after a five-year grace period all Erisa insurance offerings will have to win government approval—both by the Department of Labor and a new “health choices commissioner” who will set federal standards for what is an acceptable health plan. This commissar—er, commissioner—can fine employers that don’t comply and even has “suspension of enrollment” powers for plans that he or she has vetoed, until “satisfied that the basis for such determination has been corrected and is not likely to recur.”
I could go on and on about the idea of rationing health care and other peripheral issues; however, there are enough core policy objections that I don’t need to speculate about the questionable elements.
Perhaps the Senate and the subsequent conference committee activities will result in a better plan. My fear is that the whole thing has become politicized to the point where some bill will get passed containing just enough of the White House elements so that victory will be claimed. Unfortunately, we’ll be left with yet another government program that will never achieve its original goals and will end up costing more than we ever imagined.
