This column by ACRU General Counsel Peter Ferrara was published November 18, 2013 on Forbes.com.
In a Wall Street Journal commentary on November 11, Alan Blinder purports to tell us why, despite a “botched rollout,” Obamacare is still worth it. “America cannot be a humane society if we leave 15% of our population uninsured,” he explains.
I agree that America cannot be a humane society unless we have some means to assure health care for all. But in context, his quoted statement above could not be more silly, and intellectually embarrassing.
Alan, is Princeton so intellectually corrupt these days that no one there has noticed that the effect of Obamacare so far has been to increase the number of uninsured by millions and millions of Americans?
CBO estimates that Obamacare would still leave 30 million Americans uninsured 10 years after implementation! Avik Roy of the Manhattan Institute estimates in a commentary published by Forbes that close to 100 million Americans will lose their health insurance under Obamacare. Roy explains that this is based on estimates published by the Obama Administration in the Federal Register in 2010.
Many more Americans than that heard President Obama promise the American people over and over that under Obamacare, “If you like your health insurance, you can keep it.” It is no answer to say that millions and millions of Americans now losing their health insurance does not violate the President’s promise, because the President thinks their insurance was no damn good. That amends Obama’s promise to “If I like your health plan, you can keep it.”
Edie Littlefield Sundby had a health insurance plan that spent $1.2 million on health care for her stage 4 gall bladder cancer. That plan included first rate doctors from her hometown of San Diego, to Stanford University’s Cancer Institute, and the M.D. Anderson Cancer Center in Houston, that kept her alive for 7 years. But that plan was cancelled under Obamacare, forcing her insurer United Healthcare out of California altogether. Was that plan no damn good?
Now Sundby and her health insurance consultants cannot find another plan in the highly touted California Obamacare Exchange that includes those same doctors, at any price. And down goes another Obamacare promise, “If you like your doctor, you can keep your doctor?”
What should be brutally obvious even to Princeton economics professors and “progressive” political activists is that Obamacare is not a way to achieve their goal of universal coverage. So down goes the central promise of Obamacare to the “progressive Left. Is the appropriate greeting to them today, “good morning, suckers?”
What Obamacare really does is massively increase government power and control over health care, sharply increasing government spending, taxes and regulation. Assuming that the Ivy League professors designing Obamacare knew what they were doing, that must have been what was really important to them after all. The real reason for that is they, along with the President, suffer the “progressive” fatal conceit that they know what is best for everyone. Or in Michelle Obama’s revealing words, how the world should be instead of how it is. So increasing government power and control is what is really important, so then they can remake the world as it should be, rather than as it is. Universal coverage is just the story they tell to the “useful idiots,” to provide the cover for what they are really after – more power.
Do you see now what I mean in calling President Obama’s rhetorical strategy “Calculated Deception?”
Of course, let us not forget that candidate Obama campaigned for years promising that Obamacare would reduce the cost of family health insurance by an average of $2,500 a year. But instead of going down, the cost of health insurance has shot up. More Calculated Deception? How could anyone think that mandating slews of additional benefits that health insurance would have to provide, in addition to requiring insurers to issue new coverage to everyone at standard rates no matter how sick and costly when they first applied, would do anything but raise the cost of health insurance sharply?
So we started with the individual mandate and the employer mandate, forcing both individuals and employers to buy the health insurance that the government says they must have (because after all, the “progressives” that run the government know best how the world should be“). Now as a solution to the problem of millions of Americans, like Edie Littlefield Sundby, losing the health care plan they like under Obamacare after all, Senator Mary Landrieu (D-LA) is promoting a bill gaining increasing favor in the Democrat controlled Senate to force the insurance companies to continue to sell those plans. And now circulating among Democrats in the states is a proposal to force all doctors to serve all patients under Medicaid, Medicare and Obamacare coverage, whether the doctors want to or not. After all, when you know better than anybody how the world should be, you should be entitled to rule, shouldn’t you? That is what the Communists thought, which they thought entitled them to impose compulsion on everybody, so the world would be as it should be.
None of this compulsion, increased costs, increased taxes, spending and regulation, is necessary to achieve the moral goal of assuring health care for all. Rather, that can be achieved instead through reduced taxes, spending, and regulation.
Here is the reform plan to repeal AND REPLACE Obamacare that the Republicans should have long ago drafted, introduced and passed through the House of Representatives. Expand the tax preference now provided to employer provided health insurance to everyone through a universal, refundable tax credit for the purchase of health insurance equal roughly to $2,500 per person, $8,000 per family. That would offer the same equal tax benefit to everyone.
The tax credit is not intended to pay for the entire cost of health insurance, just to help pay for it, just as the tax benefit for employer provided health insurance does not pay for the entire cost of that insurance, but just helps to pay for it. Employers would continue to be able to deduct the cost of health insurance, just as they deduct all other employee compensation. But employers who already provide health insurance today could choose between the current tax exclusion for their workers, or the new tax credits. (Those would be equivalent tax benefits to the worker either way). That would ease the transition to the new credits, and avoid the loss of any current coverage.
Workers would be free to use the credit to purchase the health insurance they each choose, including Health Savings Accounts (HSAs). There would be no mandate forcing the worker to buy the health insurance the government chooses for them. But if a worker did not use the credit to buy any health insurance at all, that would effectively be a penalty for failing to get insurance, in terms of the opportunity cost of foregoing the $2,500 offered by the credit. If a worker does not use credit to buy health insurance, the credit amount is provided through a block grant to local indigent care facilities that provide health care to the poor and uninsured in the local area where the worker resides.
The insurance purchased by the worker with the credit would belong to the worker, not the employer, and so would be fully portable, following the worker to any job he may choose. Each worker would be free to decide to use the tax credit to purchase another health insurance plan other than the one provided by their employer, if they preferred, including Health Savings Accounts (HSAs). Once a health insurance plan is purchased, it would be assured of guaranteed renewability, as long as the premiums continued to be paid (and no one’s premiums could be increased higher than for those in the same initial risk class). That has already long been required by current law, indeed going back to the common law, because guaranteed renewability protecting against the costs of getting sick is what health insurance contracts promise to do.
Workers would also be free to choose to use the tax credit to opt into Medicaid if they desired. But anyone on Medicaid would be free to choose the tax credit to opt out of Medicaid if they desired as well. That would enormously benefit the poor, who can’t get timely, adequate care on Medicaid, because it pays so little to the doctors and hospitals that provide the care.
This alone would assure universal health care for all (which again Obamacare fails to do), because everyone would get the credit, and anyone could use it to opt into Medicaid, which is how most of the uninsured that do get health coverage under Obamacare get that coverage. This alone would also fully address the issue of pre-existing conditions for the uninsured, because anyone with such a condition that could not get market health insurance as a result could get fully covered under Medicaid. Libertarians note, if the government offered everyone a tax credit they could use to opt of Social Security, we would embrace it in a heartbeat, even if they could also use it to opt into Social Security. Note also the value of fully winning the argument over Obamacare.
The reform plan includes as well providing the federal financing for Medicaid to the states through fixed, finite block grants every year, just as was done so successfully for the old Aid to Families with Dependent Children (AFDC) program in the 1996 welfare reforms. The states would then be free to reform their respective Medicaid programs to best serve the poor in their state. The states would be urged to do that by providing vouchers to the poor that they could each use to buy the private health insurance of their choice, on top of the universal tax credit, including again Health Savings Accounts (HSAs). This would again enormously benefit the poor, because they would enjoy better access to health care with private health insurance than with Medicaid. States would also be free to use part of the Medicaid block grant funds for Uninsurable Risk Pools that would assure coverage to all the uninsured who could not buy health insurance because of pre-existing conditions. Those covered would be charged a premium based on ability to pay, to assure that the risk pool could serve a safety net function. Remaining costs would then be covered by the public funds provided to the pools.
Consumer choice and competition would help to reduce costs. Health Savings Accounts, which have proven to reduce costs through market incentives, would be available to all, which would further assure reduced cost growth. The reform plan would include the interstate sale of health insurance, to further increase cost reducing competition. Medical malpractice reform would also help to reduce costs. So the plan would provide effective cost control, unlike Obamacare, which only works to increase costs.
But the health plan would also assure universal health care for all, again unlike Obamacare, through multiple layers of safety nets. Everyone gets the universal tax credit, and everyone would be free to use it to buy into Medicaid in any event. High Risk Pools would further assure coverage to the uninsured in any event. For those who do not exercise the tax credit, the credit amount is provided to local indigent care facilities to provide health care for the poor and uninsured.
The end net result is universal health care for all, with no individual mandate, no employer mandate, a net $1 trillion tax cut, $2 trillion dollar spending cut, and vastly reduced regulatory costs and burdens (because of the repeal of Obamacare, and the Medicaid block grants, which CBO scores as saving nearly a trillion or more over 10 years). Workers would each be choosing their own health insurance. No one would be telling the Catholic Church or Liberty University that they must pay for insurance covering abortion, or contraceptives.
Republicans can be rightly faulted for failing to provide the leadership to draft, introduce and pass this freedom of choice, Patient Power plan, at least through the House, as it has been circulating among the conservative think tanks for 20 years. The public would rightly embrace this plan as vastly preferable to Obamacare, for all of the reasons discussed above. But today’s Republicans are no longer the party of ideas, as they were under Reagan, when they won control of government at all levels, but the party of scared rabbits.
Why would any progressive Democrat not join in supporting such a plan with these results? Because again unlike Obamacare, instead of increasing government power and control, it reduces government power and control. And for today’s power mad, neo-Marxist Democrats, increased government power and control is what it is all about.