A Health Care Reform Primer

An Introduction to Health Care Reform , Page 1 of 8

An Introduction to Health Care Reform Ian Hugh Patterson [email protected] 9/11/09

The health care reform debate happening right now is so contentious because it involves potentially massive changes in the role of government in our personal lives. Many Americans are simply unaware of what is happening and the decisions being made by their government right now. This document is meant to be a brief primer on the health care reform debate, as well as an argument for why ObamaCare is the wrong solution for a very real problem. So what’s the big problem with our health care system today? Pretty much everyone agrees that our current health care system needs reform. Many people cannot afford coverage. The cost of businesses providing insurance to their employees is increasing at a rate four times that of inflation, eating into profits and making many businesses go belly up.1 People with preexisting and chronic medical conditions have a hard time getting insurance because the system is built in such a way that companies cherry pick only the healthiest customers to keep their profits up. And lastly, even though we are #1 in the world for quality of medical care, we pay twice as much as any other nation for that care.2 That cost is making it hard for our businesses to compete internationally, and is bankrupting many families. Advocates of ObamaCare frequently say that 46 million people in America are uninsured, but the vast majority can afford health care but simply choose not to buy insurance, and almost a quarter of that number are illegal immigrants. The number of Americans who are truly in need, cannot get coverage, and have no alternatives, is around 11 million—only 4% of Americans.3 That number is still significant because it represents real suffering and tragic hardship—those 11 million people need our help— but 11 million is a far cry from the 46 million ObamaCare advocates claim. Our system is limping badly, but not on life support.

1

National Coalition on Health Care. (2009). “Health Insurance Costs.” http://www.nchc.org/facts/cost.shtml 2

Atlas, Scott, “10 Surprising Facts about American Health Care.” The National Center for Policy Analysis, March 24, 2009, http://www.ncpa.org/pub/ba649 3

Weeks, B. (2009). “Uninsured count needs explanation.” http://wichitaliberty.org/health-care/uninsured-count-needs-explanation/

An Introduction to Health Care Reform , Page 2 of 8

Choose your flavor of government: Big or small? There are two opposing approaches to solving these significant problems. The first is a free market solution that encourages change without reducing consumer choice or increasing government control over your health care.4 The Patient’s Choice Act of 2009, which takes this approach and has a lot of potential, was actually written and introduced before ObamaCare but is getting no press. This approach is a conservative, small government one. It is not in favor right now because liberal Democrats have a majority of votes in Congress and a Democratic president right now—they believe larger government is the only solution. Therefore, the second option is what has traction right now—Obama’s health care proposal, H.R. 3200. Obama supports a “single-payer” system of health care, which would eliminate all private health insurance providers in favor of a completely government run system that provides universal coverage for everyone. He doesn’t have enough public support for such a radical government power grab at this moment, however, so he instead is proposing that the government create a “public option” for health care which would compete against private insurers to “create competition.” (Public option means a government run health plan alternative to private insurance.) He has publicly stated that this “public option” is a stepping stone transition to eliminating private insurance entirely, but will take a decade or so to work.5 In other words, he is not at all interested in competition—a public option is a means to an end, the end being universal government control of your health care. Private companies simply cannot compete against the government, which has an unlimited ability to print its own money to stay running, even with bad service. Government bureaucracy: Innovating tomorrow’s problems today So why would a government take over of health care be bad? First, the government has a long track record of creating worse solutions than private companies: Medicaid is broke, Medicare is insolvent and a model of how to waste money, the Post Office is broke, Social Security is collapsing, Freddie Mac and Fannie Mae nearly bankrupted our entire economy last year through bad business practices, and thanks to Congress our national deficit is on track to double to around $14 trillion during Obama’s presidency. That’s not a good track record. Researching Medicare alone, a current government run health care plan, shows massive fraud, waste on a

4

CATO Institute, “What is the Free-Market Approach to Health Care Reform?” http://healthcare.cato.org/free-market-approach-health-care-reform 5

“I don’t think we’re going to be able to eliminate employer [health care] coverage immediately. There’s going to be some transition process. I can envision a decade out or 15 years out or 20 years out where we’ve got a much more portable system.” -President Obama at SEIU Health Care Forum, 2007

An Introduction to Health Care Reform , Page 3 of 8

grand scale, and studies show it offers lower quality care than even the cheapest private insurance options.6 Universal health care is a failing experiment elsewhere Second, universal health care in Europe, Australia and Canada is already a proven failure. Studies show government run health care produces lower quality care, longer wait times, increased death rates from cancer and other diseases, less innovation, and a massive majority, 70% of people under these systems, say that it’s broken and needs fundamental change.7 Third, government control of your health care means less choice for you and a potential loss of privacy down the line. If the government takes over health care (progressively via a “public option” or immediately via “single-payer”) our experiences will probably parallel those in Canada, UK, and Germany. ABC’s 20/20 news program recently looked at Canada’s care levels and found patients waiting months for life saving procedures, which often drove them to come to America for care instead.8 In other words, if the government run plan is broken, you have no alternatives and no choice. As hard as it may be for us to believe, the government run health care system in the United Kingdom has begun installing cameras in people’s homes without their permission to monitor their parenting.9 Many patients there wait months for important care, government authorization to get a wheel chair, or access to critical diagnostic tools like MRIs and CT scans. More government control under programs similar to ObamaCare has resulted in lower quality care, violations of privacy, longer wait times, and increased death rates from treatable diseases.10 ObamaCare’s wide open door for privacy violations There is language in ObamaCare that is frighteningly broad, potentially allowing for these same kinds of huge violations of your privacy, right here in America.11 Such 6

Gottlieb, Scott, “What Medicaid Tells Us About Government Health Care,” The Wall Street Journal. January 9, 2009, http://online.wsj.com/article/SB123137487987962873.html.

Cathy Schoen et al., “Toward Higher-Performance Health Systems: Adults’ Health Care Experiences In Seven Countries, 2007,” Health Affairs, Web Exclusive, Vol. 26, No. 6, October 31, 2007, pages w717w734.  Available at http://content.healthaffairs.org/cgi/reprint/26/6/w717. 7

8

http://www.facebook.com/ext/share.php?sid=142514258293&h=_ddCD&u=nDKM9&ref=mf

9

Little, Alison. (2009). “Sin bins for worst families.” Daily Express. http://www.express.co.uk/posts/view/115736/Sin-bins-for-worst-families 10

Atlas, Scott, “10 Surprising Facts about American Health Care.” The National Center for Policy Analysis, March 24, 2009, http://www.ncpa.org/pub/ba649 11

Liberty Counsel’s Analysis of H.R. 3200. http://www.lc.org/index.cfm?PID=19319

An Introduction to Health Care Reform , Page 4 of 8

statements include one that authorizes government nurses to visit your home and determine what is necessary for “improving maternal or child health and pregnancy outcomes or increasing birth intervals between pregnancies.” 12 Such broad language does not protect your rights, it leaves the door wide open for abuse. That phrasing is so open to interpretation that it’s possible for the government to decide how many children you should have, and whether or not you should keep a pregnancy. It could even allow for compulsory abortions or forced population controls in the United States, as in China. If you think that sounds like scaremongering, you should know that Obama’s lead science advisor, John P. Holdren, literally wrote the book on forced sterilization and compulsory abortions as a means of population control.13 Not only that, but he also stated that he believes such measures are acceptable under the Constitution. If Obama appointed a scientist with such well known radical views, why should he hesitate to include such allowances in his reform bill? It’s not a mandate for such violations of your rights, but it is a massive loophole, of which there are many in the over 1000 convoluted pages of H.R. 3200.14 Abortion: Universal “basic care” for all Americans Fourth, universal abortion coverage is included in ObamaCare, despite Obama’s repeated statements that such claims are “fabrications.”15 Even the mainstream press says Obama is lying to Americans by claiming otherwise.16 If it passes, all private insurance companies will be required to provide abortions as “basic care.” 17 This is despite the fact that 69% of Americans don’t want the government paying for abortions or even for their insurance to provide it.18 ObamaCare would cause a 25% increase in abortions 12

H.R. 3200, Sec.

1713, Pg. 768, Lines 3-5

13

Abrams, Joseph. (2009). “Obama’s science czar considered forced abortions and sterilization.” Fox News. http://www.foxnews.com/politics/2009/07/21/obamas-science-czar-considered-forced-abortionssterilization-population-growth/ 14

See “Liberty Counsel’s Analysis”

15

http://www.facebook.com/ext/share.php?sid=254591935525&h=pZDFv&u=HWUDT&ref=mf

16

Alanso-Zaldivar, Ricardo. (2009). “Abortion coverage allowed in health care legislation.” Associated Press.

http://www.huffingtonpost.com/2009/08/05/abortion-coverage-allowed_n_251605.html 17

President Obama’s speech at the Planned Parenthood Action Fund, July 17, 2007. http://www.youtube.com/watch?v=uUl99id2SvM 18

November 2008 Zogby poll

An Introduction to Health Care Reform , Page 5 of 8

Studies show that 25% of women who would have an abortion if it were paid for by the government instead decide to keep the baby 19. That means our nationwide abortion numbers are at least 25% lower because of the ban on tax funding of abortions. Abortion advocates’ own research showed that if government funded abortions became available, the abortion rate would go up by 28%! And that study was done by Guttmacher Institute, the research wing of Planned Parenthood itself. The bottom line is that by effectively bypassing the current funding bans, ObamaCare could result in a 28% higher abortion rate, which translates to an additional 300,000 babies aborted per year. Economic impacts: Tax hikes and lower wages all around Finally, the economic impacts of Obama’s plan could be devastating. The plan will be massively expensive—in the trillions range—and ultimately you, the tax payer, will be funding it. Forbes Magazine says the plan will be paid for by cuts in Medicare for seniors, alongside big tax hikes on businesses and the wealthy.20 These new taxes will effectively be passed on directly to middle-class workers in the form of lower wages. First, the wealthy—those earning $400k/year or more—would have their tax rate raised to 40%, taking money out of new businesses and investments. Then businesses who refuse to provide the government option to their employees would be taxed at 8% of their payroll, in addition to other “surcharges.”21 What do companies do when they earn less money? They lower wages and reduce work forces to survive. That means ObamaCare ultimately raises taxes on all Americans by way of reducing wages and increasing unemployment. So who is going to pay for this massive expansion in government power? You will, by having less money in your pocket every month. If businesses do decide to provide the government option, they will lose collective purchasing power for buying their own private insurance, meaning it’s only a matter of time before everyone getting insurance through their business will have to switch to the government plan, where they’ll have no choice of doctor or their coverage levels. Again, private insurers cannot possibly compete against the government on these terms, eventually resulting in a universal single-payer system with fewer choices for you. 19

http://www.rhrealitycheck.org/blog/2009/08/04/politics-distorts-facts-impact-abortion-coverage

20

ObamaCare: Who Gets Hit and How Hard, July 22, 2009. http://www.forbes.com/2009/07/22/health-care-reform-business-washington-tax.html 21

What Financing ObamaCare means to Your Business, August 4, 2009. http://oregontaxnews.com/2009/08/04/what-financing-ObamaCare-means-to-your-business/

An Introduction to Health Care Reform , Page 6 of 8

Practical alternatives to ObamaCare The choice is not between doing nothing or passing ObamaCare—there are alternatives to ObamaCare out there. The Patient’s Choice Act of 2009 (PCA) offers sound reforms, focusing on increasing patient choice, strengthening doctor-patient relationships, increasing competition through simple changes, and incentivizing insurance companies to lower the number of uninsured. It uses creative, small-government solutions to lower costs and put control of your insurance options squarely in your hands instead of those of a bureaucrat. Giving you control by putting money back in your pocket The best way to create competition, lower costs, and get more people insured, is to put educated consumers back in the driver’s seat with the power to choose and money in their hands. The PCA would do just that, by giving individuals a $2300 tax credit and $5700 to families that can be spent on health insurance and care. President Obama’s own economic advisor, Jason Furman, endorses this idea, saying it has “the potential to expand coverage and reduce inefficient spending at no net federal cost.”22 Combining this tax credit with the creation of a consumer-friendly, one-stop marketplace for health insurance shopping and authorizing insurance companies to compete across state lines could reawaken competition in the land of slumbering insurance giants, resulting in lower costs, greater patient choice, and fewer uninsured Americans. Guaranteeing access to care for those with preexisting conditions Even though these simple measures will significantly lower insurance costs for all Americans, helping many more to afford insurance, there will still be a large number of Americans who want health insurance yet cannot afford it or have preexisting conditions that get them turned down by insurance companies. Our health insurance system must work for everyone, every time, especially those in poverty and those suffering from chronic illness. The first step in helping Americans with current medical conditions is requiring that insurance companies play fair. Under our current system, insurance companies cherry pick only the healthiest patients because doing so keeps their costs down and profits up. The PCA would fix this imbalance in two ways. First, it would guarantee access to care for everyone by requiring that insurance companies offer coverage to any individual, regardless of age or health history. However, this requirement is only practical if insurance companies receive some incentive for taking potentially high-cost 22

“Furman, Jason, “Health Reform Through Tax Reform: A Primer,” Health Affairs, May/June 2008, http://content.healthaffairs.org/cgi/content/abstract/27/3/622

An Introduction to Health Care Reform , Page 7 of 8

patients. Therefore the PCA’s second key to guaranteed care is to establish an independent board that would reward companies taking patients with preexisting conditions and penalize those avoiding them—a concept that is already successful in Switzerland and Holland.23 This step would guarantee access to care for everyone and even incentivize insurance companies to compete for these patients because doing so would give them a competitive advantage. Providing care for the very poor To help the very poor, the existing Medicaid program can be renovated and simplified to guarantee their access to care. Medicaid already provides health care to many very lowincome Americans, as well as those with disabilities. In fact, many of the people who currently qualify for Medicaid have not enrolled, simply because the process of enrolling is so complicated. A more patient-friendly and efficient Medicaid system that provides direct financial aid to those in severe need, along with practical guidance in purchasing the right insurance plan, would guarantee that those in severe need receive quality care. Establishing an auto-enrollment system for these individuals could ensure that no one qualified for assistance is left out, resulting in near universal levels of coverage.24 Conclusions Clearly there are very viable ways to reform our present system that do not involve the potentially disastrous big government approach of ObamaCare. The Patients Choice Act would enact simple yet powerful market reforms that would ensure that every American has access to affordable and effective health care. On the other hand, ObamaCare’s approach would effectively raise taxes on all Americans by lowering wages, eliminating healthy competition, and initiating a government takeover proven to result in far worse medical care than we have right now. If you’re interested in learning more about the Patient’s Choice Act of 2009, you can find a brief summary of its proposals here: http://www.house.gov/ryan/PCA/PCAsummary15p.pdf

23

Leu, Robert, et al., “The Swiss and Dutch Health Insurance Systems: Universal Coverage and Regulated Competitive Insurance Markets,” The Commonwealth Fund, January 16, 2009. http://www.commonwealthfund.org/Content/Publications/Fund-Reports/2009/Jan/The-Swiss-and-DutchHealth-Insurance-Systems-Universal-Coverage-and-Regulated-Competitive-Insurance.aspx 24 Jeffrey Liebman and Richard Zeckhauser, “Simple Humans, Complex Insurance, Subtle Subsidies,” National Bureau of

Economic Research working paper, September 2008, http://www.nber.org/papers/w14330.

An Introduction to Health Care Reform , Page 8 of 8

What can I do to make a difference? Voice your opinion! The groundswell of opposition to ObamaCare over the past months has been impressive and continues to grow. Most politicians only care about getting reelected, but they will listen if massive numbers of their constituents say they do not want ObamaCare and will not vote for any politician who supports it. Go online and find out who your representatives are in Congress. Call their office to voice your opinion and be sure to tell them this is an issue that will determine whether you vote for them in future elections. Send emails or fax letters as well, although phone calls are probably most effective. Finally, consider talking to your friends about this important issue. It is difficult to sort through the media spin on this topic, which is why I have tried to carefully cite sources for my arguments in this primer. Keep your discussions on this topic factual, respectful, and honoring—this is a very emotionally charged issue for some people. Let the facts speak for themselves and encourage people to do their own independent research. By making our voice heard and bringing the facts to bear, we can bring about a set of real reforms that will help millions of people and serve Americans well for generations to come.