Posted by
Simple Guy on Thursday, November 12, 2009 1:28:47 PM
I’m very sad today, and frustrated, and a bit confused. With last weekend’s passage of the House Health Care Reform Bill, I’m left wondering where the America I love is heading and what has happened to freedom. It seems as though we have entered an alternate land in some strange Twilight Zone episode—a land wholly different from the one that has helped shape the course of this world for over two centuries.
The past few weeks I have spent a great deal of time reading portions of the 1990-page House Bill and a summary of the Senate’s Baucus Bill that passed the Senate Finance Committee three weeks ago. I’ve seen enough to nearly make me ill. I have always been very opposed to the whole philosophy and concept of government-sponsored, and government-managed, health care, but I wanted to go beyond what others were writing about it and develop my own specific conclusions by analyzing the actual words that have been voted on. So, after many hours of reading, thinking, and yelling at my computer screen (and with an understanding that the final bill brought before both the House and Senate will most likely vary significantly from the bill passed this weekend), I would like to present 7 questions, plus one, that have been churning in my mind the past few days.
QUESTION 1 – Why is the federal government even getting involved in the health care business?
Here is what I believe is the root of this issue: America was founded by an amazing group of people who wanted to live in a place free from the entanglement of government in their lives. They recognized, through experience, the dangers of a governing body having too many fingers in the pie, even when it may seem like those fingers are giving things away. They seemed to recognize the truth of what Barry Goldwater would later state, that “the government that is big enough to give you all you want is big enough to take it all away.”
For this reason, they designed a governing document (the Constitution) that clearly defined very specific guidelines for the roles the federal government would play in daily life. With this document as our foundation, America has thrived for over 230 years. We need our government to fulfill those limited roles, but sadly, most of the health care reform being discussed today is contrary to the Constitution. In Article 1, Section 8 of the Constitution, Congress is authorized to do about 21 things, with the rest of life left up to individuals and to the states. But so much of what Congress does today, and taxes us for, is nowhere in that list. And without a doubt, managing and running a business like health care (the public option will very possibly be in the final bill) is nowhere on the radar of Constitutionally-mandated responsibilities. In other words, regulating this industry to the point of massive intrusion into personal and business affairs (see below) is bad enough; but it is beyond my comprehension to understand how it can be good for America to have our federal government become a health insurance provider.
It is an important function of government to protect citizens’ liberty, including their economic liberty and freedom. However, the more government infringes on our personal economics by imposing taxes to pay for programs that may represent good causes, but that could be so much better handled by the private sector, the more our personal liberty is eroded. David Hume observed that “It is seldom that liberty of any kind is lost all at once.” I fear that this massive intrusion into our lives known as health care reform is yet another slice of liberty being removed.
I am so tired of our president and his supporters in Congress acting and making laws as if the Constitution didn’t even exist. It is a sad day when America disregards (not amends, which is appropriate, but ignores, which is deplorable) the very principles that not only define our nation, but that have led to our greatness.
QUESTION 2 – Is health care really a right?
Do most Americans wish that more people had health care coverage? Absolutely. This debate isn’t about Conservatives not caring that many of their fellow citizens may not have adequate coverage—we care deeply about this. The debate is about what is the best way to arrive at the goal of greater coverage.
See, there’s a big problem with stating that health care is a right. Economist Walter Williams explains it this way: true “rights” in America—rights such as the freedom of speech and the right to bear arms—do not impose an obligation on someone else. For example, because of our First Amendment, I can say most anything I want in public without fear of imprisonment, but I can’t demand that someone buys me a microphone and rents an auditorium for me. In the truest sense, health care is not a right because it imposes on others the requirement to provide money to pay for it—it requires that the government reach into someone’s pocket to pay for another person’s care.
Having health care is not a fundamental right—having the freedom to obtain health care coverage in a free market is a fundamental right. Few people want there to be millions of Americans without health care coverage, but who came up with the concept that the government should take care of our needs to this extent? The government can’t keep throwing money at the problems of citizens. Where would it stop? Do we really want to live in a country in which big Uncle Sam steps in repeatedly and gradually creates an environment in which more and more people have to lean on him and limp through life in dependence?
My goal is to see the free market left alone, unburdened by excessive taxes—encouraged to make a few adjustments to the existing system (some suggestions are listed later). In this environment, the cost of care will come down, making it possible for more and more Americans to purchase the coverage needed in a healthy economic environment, not in a dependent state of need.
QUESTION 3 – Are we truly in a crisis?
Once again, this issue isn’t about the fact that we want to make health care more affordable for more people—this is about how it is accomplished. We have, arguably, the greatest health care plans in the world. We keep hearing about the 47 (or so) million Americans who aren’t covered—why don’t we hear more about the millions and millions of Americans who are covered by great medical plans (I absolutely love my health care plan). We have a great health care industry in place in America—why scrap the whole thing, or throw such a wrench into it that it will inevitably drive up the costs for everyone? Yes, I know that President Obama says that his goal is to keep the costs down for everyone, but there is more and more evidence emerging that his plan will do just the opposite.
I realize that the argument can be raised that neither the Baucus Bill nor the House bill eliminates current health care plans. But, make no mistake about what appears to be the president’s ultimate wish. In 2003, he stated “I happen to be in favor of a single-payer, universal health care plan…” In April of this year, Democratic Representative Jan Schakowsky (IL) said “…a guy from the insurance company who then argued against the public health insurance option saying it wouldn’t let private insurance compete—a public option would put the private insurance industry out of business and lead to single-payer…My single-payer friends, he was right.” If you read the words of many of the Democratic leaders who are pushing for these new health care bills, it becomes clear that many of them wish to eventually move to a government-sponsored, single-payer system which will, essentially, scrap our current health insurance system that provides amazing care for millions and millions of Americans. If we start down that road now with a public option, I don’t doubt that the power and money it brings the federal government will just motivate the leaders in Washington to move more and more toward a universal, single-payer plan.
QUESTION 4 – Can the federal government do a good job managing this industry?
There’s no question that the federal government is needed for some things—defending our country with a strong military, protecting our borders, a few other functions—because it accomplishes these things in a way no other entity can. However, there is also little question that the efficient spending of money is not one of the things the federal government does well. In fact, examples of their mismanagement and waste are legendary. Consider these stories among thousands that could be told:
In the 2003 Financial Report to the United States Government, issued by the Department of the Treasury, there is a section that notes that “unreconciled transactions” totaled $24.5 billion. Unreconciled transactions are funds that can’t be accounted for. In other words, the government knows that $24.5 billion was spent somewhere in 2003, but auditors cannot account for it.
In 2002, the inspector general of the U.S. Department of Health and Human Services testified before a Senate subcommittee that Medicare had paid $8.68 per liter of saline solution while the VA health care program had paid only $1.02 for the same product.The study revealed that it was typical for Medicare to pay excessive prices for many medical supplies.
The Social Security system is on its way to bankruptcy. Story after story emerged about the mismanagement of federal funds provided to victims of Hurricane Katrina. Medicare is in deep trouble. And on and on the examples go.
This is the same government that would like to convince us they can effectively manage one of the largest industries in the country. It amazes me that so many Americans are willing to hand over a large portion of their hard-earned dollars (and don’t be fooled into thinking that it will only be the rich who will pay for this) to an entity that has an indisputable track record of waste and mismanagement. Would anyone trust their retirement account in a financial firm with this kind of reputation? But so many are willing to trust Washington with billions of dollars—why?
Let me pose a fundamental question to those who wish to move to a more government-run system: when is it ever a good thing to remove competition from the market? We currently have hundreds of health insurance companies in America, all competing against each other for our business. This is the basis for a capitalistic society. If the government removes or limits that competition, do we really think costs will go down? A competitive market is one big reason why I can buy a digital watch today for $5 when they used to cost so much more. It’s why I could buy a great laptop computer last month for under $900 dollars. Competition helps keep prices down and quality and innovation on the cutting edge. How much incentive will be removed for medical research to continue to improve medicines, techniques, and devices when the federal government begins fixing prices and removing competition? If the government eventually runs this business, as many are pushing for, it seems that much of the funding for medical research and development will be from increases in taxes—this isn’t the model for keeping America on the cutting edge of medical technology. I am frustrated and amazed that so many are willing to deny so many fundamental truths, basic financial principles, and freedom itself, all for the convenience of simply letting the government take care of it.
Or, if the final solution from government is to simply add one more competitor into the mix (the federal government itself), let me address what President Obama said recently. "Just conceptually, the notion that all these insurance companies who say they're giving consumers the best possible deal, if they can't compete against a public plan as one option, with consumers making the decision what's the best deal, that defies logic.” On the surface this seems to make some logical sense. But once again, the federal government has no business (according to the Constitution and based on their history of inefficient management) being an insurance provider. Also, if they enter this business, what kind of competition would they really bring to the table when much of their plan would be funded by tax increases and fines? It’s just a bad financial model to implement. (One little side note: have you noticed how much time the President spends criticizing businesses like the insurance companies and the auto manufacturers? It leads me to question the respect he has for the very people who provide the jobs that keep our economy going and keep our citizens employed. It often seems as though he believes the federal government is a better business than the thousands of private businesses that make up our economy. I wish he would spend more time praising and building up, rather than cutting down, the very businesses that contribute to America’s financial success.)
QUESTION 5 – Can it in any way be a good thing for government to intrude this deeply into the lives of individuals?
The new House bill requires individuals to obtain health insurance or pay a fine (tax) to the government(Page 296 of the released House bill states: “If an individual fails to obtain qualifying coverage, he must pay an income surtax equal to the lesser of 2.5 percent of modified adjusted gross income (MAGI) or the average premium.”). Also, if a person fails to pay this tax, he or she could be subject to the penalties stated in the U.S. tax code, which include heavy fines and even possible imprisonment. I don’t understand how this one fact alone doesn’t send chills down the spine of every American who loves freedom. The gall and arrogance of this administration and Congress who think they have the right to govern our lives this deeply. America, please wake up to see the road this reform bill is paving—a road that leads to a slow erosion of freedom and a gradual takeover of more and more of our private lives.
President Obama has repeatedly stated that no one would be required to give up their current insurance. Technically, this is true according to the new House bill, but in reality, this statement is a distortion of reality. The new bill imposes such strict regulations on private insurance companies (see pages 91-95 of the bill) that it seems clear one of this administration’s goals in this is to see private insurance companies fade away so the federal government can step in. For instance, a private company cannot enroll anyone new in their plan after the first day of the first year of the passage of this bill, nor can they change their terms or benefits after the first day. In other words, you’re free to keep your current insurance now, but if your insurance company decides to make changes in its policy, or if you change jobs and wish to get new insurance, you will be required to obtain either public-option insurance or insurance covered under the new State Exchanges. How can this in any way be good for a market-driven, capitalistic society like ours?
I have a big moral problem with the government getting entrenched in this very personal area of individuals’ lives. The government has quite a track record of passing laws in an attempt to regulate what they perceive as a problem. Is smoking a problem? Let’s pass a law to ban it from private businesses (and let’s tax it more to provide a little more incentive for people to stop the habit). Is global warming about to doom the earth? Let’s pass a bunch of laws to mandate what private auto manufacturers can produce in their factories. Is it a big leap to project that if the government adopts a huge vested interest in health insurance, then fattening foods will soon be a “problem” to tax or regulate? Long-term care for the elderly could become unproductive and inefficient and therefore regulated by a group of bureaucrats more concerned about the bottom line than about the value the elderly bring to our society. My great concern is that if the government gets more and more into the business of providing health care, they’re going to get more and more into our personal lives—and isn’t this what the founders of this amazing republic feared greatly and sacrificed their lives to prevent? Isn’t the avoidance of that scenario a huge part of what defines America? Could it be that this administration is set on redefining America? If so, I wish for them the greatest failure imaginable in this arena.
Finally, even though the Stupak amendment prohibits public health care money from being use to fund abortions, there is much talk that this language will not find its way into the final bill proposed. If this is the case, what an assault it would be on the consciences of millions of pro-life Americans.
QUESTION 6 – Will only the rich see their taxes increased?
Let’s look at some numbers and estimates, particularly based on the Baucus Health Plan that passed the Senate Finance Committee. Of course, any numbers discussed now are merely projections since there is no final bill yet. I also realize that numbers can often be manipulated to prove many different points, but if the figures discussed below are even close to what would eventually be reality in a final bill, far more than the rich will have to be taxed to cover the costs.
The Congressional Budget Office estimates that the Baucus Bill would reportedly cost the federal government about $900 billion over the next 10 years. The number keeps growing. The latest estimate for the House bill sits at about $1.2 trillion. According to Douglas Holtz-Eakin, former director of the CBO, “The bill would impose nearly $400 billion in new taxes and fees. A large portion of that burden will be shouldered by those making $200,000 or less.”
The $900 billion or $1.2 trillion will be financed in large part by new taxes and fees such as:
An excise tax on insurance companies’ high-cost, “Cadillac” health care plans that many Americans (not just the wealthy) already carry. Simple economic sense says that these taxes will be passed on to the insured in the form of higher premiums and/or higher health care costs.
An annual fee (about $4 billion according to the Baucus Bill) on companies that make medical devices (including devices such as powered wheelchairs, hearing aids, and prosthetics). Also, a $2.3 billion fee on pharmaceutical manufacturers. Again, these aren’t just fees imposed on the big businesses of the world—these are fees that will be passed down to all consumers: lower class, middle class, upper class.
Currently, medical expenses that exceed 7.5 percent of adjusted gross income are tax deductible. The Baucus proposal would raise this threshold to 10 percent. Is this not essentially an increase in taxes on Americans of all income levels, not just the rich?
Additional limits and restrictions will be placed Health Savings Accounts, including removing the ability to purchase non-prescription drugs with this money and reducing the amount of tax-free money that can be put in the accounts.
The House bill includes a surtax of 5.4% on those making $500,000 or more. That’s a huge tax increase to fund this program. And lest we fall for the class warfare mentality that says “people who make that much can afford it,” please remember that the wealthy in this country are the ones who start businesses and create jobs for the lower and middle class. They are also many of the ones who provide much of the funding for great programs that help the needy. This country will crumble economically if big business keeps getting punished for success. When high taxes and fees are imposed on them, it affects all of us in the form of lost jobs, higher fees (that have to be paid by the very people the supporters of these tax increases claim they want to help), less innovation, and much more. I have to ask the question again: do we really think the federal government will spend Americans’ money more effectively than the American people themselves? I so wish this administration would think long and hard about the words William Boetcker said back in 1942 (sometimes attributed to Abraham Lincoln):
“You cannot help the poor by destroying the rich.
You cannot strengthen the weak by weakening the strong…
You cannot lift the wage earner up by pulling the wage payer down…
You cannot help people permanently by doing for them what they could and should do for themselves.”
Do you notice a trend in the taxes and fees listed above? There seems to be a strong tendency with many in Congress to make decisions that lead to stifling innovation and success. “Have you been successful and make a good amount of money? Let’s increase your taxes so we can ‘spread the wealth around’ to those who haven’t gotten to where you are.” “Are you a big business that creates innovative drugs that help cure people? Let’s impose a big fee on you and chip away at your incentive to research and develop new and better medicines.” “Have you worked hard to be quite self-sufficient and able to get your own insurance? Let’s add a fee to that success—you don’t really need all that money anyway.” Those aren’t the words we hear, but that’s the message sent by their actions.
A large number of Americans who are not offered health insurance at work would be eligible for government subsidies to help cover the cost of obtaining insurance. This may sound good on the surface, but the only way the government can afford this is to impose new taxes and fees on Americans. One of those “someone’s” is employers—businesses with more than 50 employees that do not offer employer-sponsored insurance will be assessed a fee for each employee who receives a government subsidy. Once again, where will the employer get the money to pay for this fee? From his or her workers, most likely in the form of lowering wages or laying off workers.
There’s another interesting possible negative side effect of this fee imposed on employers: since an employee’s eligibility for receiving government help with his or her insurance is based on the employee’s family income and size, there is a built-in incentive for employers to hire workers from smaller families with a higher family income. Seems to me like this could have a very negative effect on the hiring of lower class individuals, workers with children, and those who need work the most. Also, do we employees really want to have our privacy invaded to the point of being required to disclose our family income to our employer? Finally, with the bill’s requirement that individuals, health insurers, employers, and government health agencies report detailed health insurance information to the IRS, how much will this cost taxpayers for the added administrative costs. All of these issues expose this entire reform idea as yet another example of the many inherent problems of government getting involved where they have no business.
Independent financial consultant PriceWaterhouseCoopers released a report in October in which it analyzed many of the elements of the Senate Finance Committee’s health care reform bill (many of these elements are also in the House bill). In its findings, they analyzed such items as the new taxes imposed by reform and the cost-shifting that would occur as a result of Medicare cuts. The study estimates that, if a health care reform bill similar to the Baucus Bill is passed, the cost of obtaining private health insurance could increase by as much as 32% more (for all income levels—not just the wealthy) between 2009 and 2019 than a normal increase in the absence of any reform bill. If these numbers are anywhere close to being accurate, so much for the administration’s plan to lower health care costs for everyone.I just can’t help but wonder if this whole issue, from the government’s perspective, isn’t so much about helping those without insurance as it is about gaining more and more power in Washington. Just a thought.
QUESTION 7 – Why does the federal government think they have the right to regulate the decisions of a private business with regard to costs and coverage?
The House bill contains provisions that prohibit insurance companies from having a lifetime limit on benefits paid and would bar them from denying coverage based on pre-existing conditions. Though I admit this is a difficult issue for me to sort through, I lean toward believing that these are decisions that should be left up to private business, not government mandate. For those who like to cast stones at big businesses like insurance providers, please consider how you would feel if the government stepped into your line of work and demanded that you make economic, business decisions based, not on what you believed was best for your company, but on what a group of bureaucrats in Washington determined was best.
Similarly, both the House bill and the Baucus bill include a government requirement that employers provide health insurance coverage for their employees (“Employers with 200 or more employees must automatically enroll their employees…”). The House bill also requires many employers to pay a big portion of the premium. A fine is imposed on employers who do not comply (“An employer with more than 50 employees but one that doesn’t offer coverage would be assessed a fee for each employee who receives a premium tax credit.”). What right, under the Constitution or common sense, does the federal government have to intrude into the lives of business owners to that level?
The House bill also requires chain restaurants to post, on their menus adjacent to each food listed, the number of calories of each item. There is also a requirement to post a “succinct statement concerning suggested daily caloric intake…” What? Yes, it’s nice to know this information, and I appreciate restaurants that choose, on their own, to inform their customers. But what right does the government have to demand this of a privately-owned business? And what about the cost to these restaurants of producing new menus? It’s highly likely the restaurant’s patrons will cover this cost.
There are numerous hospital procedures and decisions that will now be under the direct control and influence of the Secretary of Health and Human Services. Again, how can it be wise to leave important medical decisions regarding a private hospital’s effectiveness to administer health care in the hands of those assigned to be in charge in Washington?
The Baucus Bill includes a requirement that, beginning in 2010, health plans would be required to report the proportion of premium dollars spent on non-medical care. Lest we think this is a healthy practice of the federal government to keep business from misusing the consumer’s money, please consider where this micro-managing could lead. We would be wise to think this through to its logical conclusion—when the door to government intrusion into private affairs is opened a little, what’s to stop it from swinging wide open to invite them into every business’ books to mandate and regulate how every company spends its money. Just ask Chrysler if they like Uncle Sam manipulating their business decisions.
FINAL QUESTION – Then just how can we improve our health care system?
Whatever the answer to this question, I believe we need to start with the understanding that freedom and the free market are foundational to any solutions that may be proposed. We absolutely do not need reform that so blatantly runs contrary to the fact that freedom of the individual, and the free market, have defined the success of the American economic system for years. The reform measures that have been proposed by the Democrats flirt dangerously close to moving America to a socialistic health care system—a system that has been, for the most part, a failure in so many places it has been tried around the world. For example, rationing of health care and incredible delays in being referred to specialists are the norm in Canada (I give some specific examples of this in Chapter 8 of my book at www.just2simpleguys.com). Why would we want to even consider the idea of a government-run plan?
So, I’d like to answer this valuable question with a few ideas borrowed from the experts out there. Rather than an entire overhaul of the system we have in place in America today, how about we adjust that system in ways like the following?
Change the federal tax law to allow for greater portability of health insurance when workers change jobs. This will, along with other benefits, allow employees to keep their current insurance when they change jobs.
Expand the availability and benefits of Health Savings Accounts. These accounts allow employees to set aside, tax-free, money into a savings account. This money can only be used for qualified medical expenses and any money that is not used can be utilized at a certain age as retirement income. These accounts provide many valuable benefits that help keep overall costs of health care lower by injecting market principles into the mix.
In conjunction with Health Savings Accounts, encourage the restoring of “price tags” for medical care. By requiring providers to inform patients of the cost of their care, the market and competition would be much more maximized and would invariably bring costs down.
Though I am not a big fan of imposing great regulations on industries, I do believe that true health care reform will involve some measure of tort reform that includes placing limits on lawsuit payments for “pain and suffering.”
For any regulations that may be valuable in the health care and insurance fields, transfer regulatory powers from the federal government to the states and allow them to devise innovative solutions to the problems.
Reform Medicaid by implementing such practices as moving some recipients into private health insurance plans that are funded by tax credits, HSA’s, and possibly some assistance for premiums (monitored at the state level so there is less of a chance of it being taken advantage of).
It seems clear and sensible that the ultimate health care reform will involve a long-term approach that, as described in the paragraphs above, encompasses the philosophical concept that the more the government stays away from our wallets (instead of increasing taxes to “spread the wealth around”), the more money will be available for great Americans to help those in need. In addition to the economic sense it makes for government to limit its influence on businesses, I am convinced that millions of the well-off in this country truly want to help the needy and if their hard-earned money is left alone, many of them will use that money to help in the health care arena. This is borne out in such organizations as Medi-Share (www.medi-share.org), an online community of people that have contributed to a pool of money that is used to provide assistance for those with medical needs. Visit their website to see an example of the great things that can happen when government limits its role and leaves Americans to do what they do so well—produce, grow the economy, and help those in need.
FINAL QUESTION 2 – What can we do about all of this?
Call your Congressional Representative and Senators to express your opinion on this issue. With re-elections coming soon for many of them, they are listening to our opinions. Call the Capitol switchboard number (202-224-3121), ask for your representative or senator, and briefly express your opinion on the Health Care Reform bill. It will make a difference.
One final note: Many of the Conservative concepts addressed in this analysis are described in more detail in my book, “Just 2 Simple Guys—Rediscovering Common Sense in America.” Please visit my website at www.just2simpleguys.com for more information. Thank you.