Obamacare Will Be Costly, Ineffective


As politicians fiercely debate the passing of a bill that would constitute the greatest overhaul of the healthcare system in the history of our nation, it’s easy to get confused by the rhetoric of political speeches and not fully understand the reality of a government-run healthcare system. Before we can understand exactly what the Obama administration is proposing, we have to understand what the government of late has become. Practically speaking, government is simply a group of individuals whom we elect to tell us what to do. It exists to serve the common good of society which the private sector cannot address. Government in the United States was meant to be limited enough to allow for individual liberty and free enterprise to flourish. Yet in recent years, we’ve seen government expand to monumental proportions, to the point where it is now directly involved in our daily lives. While government is necessary to regulate the free market, it should not dictate or attempt to control industries. Unfortunately, Obama’s healthcare plan attempts to do just that.

‘Socialized medicine’ is a term that has been thrown around a lot lately, but it is another one of those terms that too many use and too few understand. Smothered by Obama’s promises of quality healthcare for everybody, the rhetoric of socialized medicine sounds much better than its ugly reality. Instead of competition in the free market determining best quality healthcare for each individual patient, that responsibility would be placed entirely in the hands of the government. In order to account for everybody, the government would have to provide mediocre healthcare that would pale in comparison to the quality received under the free market. President Obama recently nominated Sherry Glied to the post of chief policy advisor to the President regarding implementation of health reform. Dr. Glied has previously stated that government-directed efforts to reduce costs will be ineffective, and that a government-run system will lead to under-funding and a two-tiered health system. Patients would have to wait in long lines which, Dr. Glied admitted, “will in some cases lead to worse healthcare for patients”. One of Obama’s recent proposals has been to allow a board of federal officials to make “recommendations on cost reductions” that would have the force of law. Do we really want a board of unelected bureaucrats making health decisions for American patients based on what they think will cost least “on average”? Federal boards are going to decide what is and isn’t good for you and me, driving a wedge between doctors and their patients. And let’s not forget the amount of taxpayer money needed to support the system. The idea that public healthcare is a cost-cutter is laughable. Costs are going to explode. Estimates range from 1.5 to 2 trillion dollars at the very least. Regardless, the government will still have to ration its services among the population, causing a critical shortage in the supply of available healthcare.

Obama has tried to smooth over the reality of the plan by stating that citizens have the right to keep their old insurance. Yet as the newly inserted claw of government slowly tightens its grip around the healthcare industry, private business will be phased out. Before long government will be the sole provider of healthcare and without competition to improve customer care, the prices will stay high and the quality of health will remain stagnant.

Polls show that 89% of Americans are satisfied with their current private coverage. That would leave a number of 33 to 47 million people who show up on the books are being uninsured. Now, let’s break that number down. When you take college kids plus those earning $75,000 or more who choose not to sign up for a healthcare plan, roughly 20 million people are removed from the list of uninsured. After that you can remove the 10 million who are not U.S. citizens and the 11 million eligible for SCHIP and Medicaid but for some reason have not signed up for those programs. That leaves only 10 to 15 million people (3% of the population) among the long term uninsured. Yes, they need help, but not with government backed insurance plans or massive tax increases. Instead, we can give the truly uninsured vouchers that will allow for choice and coverage, which will cost only $25 billion dollars per year – with no socialized medicine.

Yet the politicians on Capitol Hill think otherwise. Senator Tom Daschle stated “Health care reform will not be pain free. Seniors should be more accepting of the conditions that come with age instead of treating them,” while former Colorado Governor Dick Lamm said that seniors have “a duty to die.” Yet, they neglected to mention that under the current and proposed healthcare plan, government officials receive special, privileged coverage.

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6 Responses to Obamacare Will Be Costly, Ineffective

  1. Hi Colin:

    You article was listed in the Sphere listing on my blog on the same topic. Nice job. My blog is The Political and Financial Markets Commentator at http://politicsandfinance.blogspot.com. Keep up the good work.

    Mike

  2. Samantha Belicek says:

    Ok, Colin. I must ask–did you even research your ideas and check the facts before writing this article? It certainly doesn’t appear that you did, because there are many things that are downright false, and easily proven to be so.

    Let’s start with line 5, “a government-run healthcare system” (by the way, it’s “health care”. Two words. I guess you didn’t check your spelling, either). Although there is a bill in the House, HR 676, that proposes a single-payer system, that is not what the current debate is dealing with. Nobody is even discussing that bill. We are discussing the particulars of HR 3200, which does NOT propose a single-payer system. The current proposal, which you would know if you watched Obama’s speech last night, is for some health insurance reforms and a public insurance OPTION for those who currently don’t have it. This isn’t even close to being “government-run”.

    Second, you say that “government is simply a group of individuals whom we elect to tell us what to do”. That’s your own ideology, maybe, but I disagree on both a personal level and a common-sense level. I assume you’re talking about the federal government, not local or state governments, but the reigning principle for all of those is to act in the best interests of the people and make sure that the things that are necessary for us (economy, education, world relations, public safety) are provided for. If you take a moment to think about it you’ll notice that, other than taxes (which, I’ll note, pay for the roads you drive on, your grandmother’s Medicare benefits, and all of the infrastructure in the U.S. that enables us to continue functioning) and various laws that are intended to protect all of us, the government really doesn’t spend a whole lot of time telling us what to do. Anyway, that’s your personal opinion–now back to how you’re wrong about a lot of facts.

    “Instead of competition in the free market determining best quality healthcare for each individual patient, that responsibility would be placed entirely in the hands of the government.” Again. Nobody is seriously considering a single-payer system right now.

    “One of Obama’s recent proposals has been to allow a board of federal officials to make “recommendations on cost reductions” that would have the force of law.” Yes, there is a board. It’s called MedPAC, short for “Medicare Payment Advisory Commission”. It’s an independent Congressional agency and was established in 1997 under the Balanced Budget Act. It is composed of doctors and health policy experts who are elected on 3-year staggered terms. It’s not a recent proposal, and it’s not an Obama proposal. You can read more about it at http://www.medpac.gov/about.cfm.

    “Costs are going to explode. Estimates range from 1.5 to 2 trillion dollars at the very least.” Aren’t you supposed to be a journalist? Cite your sources! Anyway, providing health care for everyone IS a cost-cutter. We spend more money per capita on health care than any other industrialized nation, and we have far less to show for it. At the very least, that should tell you that making sure everyone is insured in some form or fashion might be a good way to start. I can give you facts and figures and quotes but it would take to long. Email me if you want to learn more.

    “Obama has tried to smooth over the reality of the plan by stating that citizens have the right to keep their old insurance. Yet as the newly inserted claw of government slowly tightens its grip around the healthcare industry, private business will be phased out.” Just like USPS has phased out UPS and public schools have phased out private ones. See a connection here? The private options cost more; those who can afford it have the choice to use them. But there is still that public option for those who have no other.

    “Polls show that 89% of Americans are satisfied with their current private coverage.” Cite, cite, cite!

    “When you take college kids plus those earning $75,000 or more who choose not to sign up for a healthcare plan, roughly 20 million people are removed from the list of uninsured.” What does earning $75,000 or more have to do with this figure? There are some who are voluntarily-uninsured. Cite a number there. But why would you remove college kids from this figure? Most college kids have insurance through a parent’s job or private plan; most universities offer relatively low-cost student insurance or require anyone who doesn’t have insurance to buy a limited plan through the university. Since either one is included in your financial aid, I’d think that the majority of otherwise-uninsured college students would have insurance through one of the three scenarios above.

    From http://www.businessandmedia.org/articles/2007/20070718-sidebar.aspx: “Census data include 9.487 million people who are “not a citizen.” [in the number of uninsured]“. This “not a citizen” categorization doesn’t separate the number of illegal aliens (who, I must point out, are generally terrified of being deported and would be unlikely to participate in a government census in the first place) and legal residents, who would be covered under the reform and should therefore be included in the number of uninsured. Residents are living, working, and paying taxes here, but haven’t been here long enough to become citizens. I think the requirement is something like 7 years.

    While we’re debating the total number of uninsured, let me ask: should anyone be forced to go without health insurance for any period of time? The idea that insurance should be tied to your job is ridiculous. “The average American changes jobs 10 times and switches careers three times over the course of a lifetime” (http://www.employmentguide.com/part-time-jobs.html). That means that the average American will change insurance plans 10 times over the course of his/her lifetime. That’s stupid! If there is one great thing about single-payer systems that we should try and emulate, it is the idea that your insurance plan will never change unless you want it to and will follow you wherever you go.

    “We can give the truly uninsured vouchers that will allow for choice and coverage, which will cost only $25 billion dollars per year…” Each year. Forever and ever, amen, right? And what about when the population grows? It’s true that reform will cost a good amount of money to initialize, but the idea is that it end up being self-sufficient, and Obama does not want the government to have put keep putting money into it. And why should they? If we can fix the problems and be done with it, let’s go for that!

    “Senator Tom Daschle stated “Health care reform will not be pain free. Seniors should be more accepting of the conditions that come with age instead of treating them,” while former Colorado Governor Dick Lamm said that seniors have “a duty to die.”” Lamm is an extremist, denounced by many (and I personally think that’s a terrible thing to say. Perhaps we should remind him of that quote when he’s around 75 years old?). Daschle, however, did not say that quote. Please go to http://www.snopes.com/politics/medical/seniordeath.asp and scroll a little more than halfway down the page. And stop reading emails that have titles like “FWD: FWD: FWD: FWD: FWD: OBAMA WILL KILL YOUR GRANDMOTHER”.

    “Yet, they neglected to mention that under the current and proposed healthcare plan, government officials receive special, privileged coverage.” I think a lot of people would say that this isn’t morally right. I don’t think they should get coverage that is any better or cheaper than anyone else’s simply because they hold office. So let’s get everyone to call for reform involving this.

    Hope this straightens a few things out. Cheers.

  3. Andrew says:

    This article was rife with right-wing canards and framing (“Obamacare”, “bureaucrats”, “government takeover”, etc). I doubt I can do a better job than Samantha at debunking these claims, but I’ll at least try to address some of their implicit assumptions.

    ” While government is necessary to regulate the free market, it should not dictate or attempt to control industries. Unfortunately, Obama’s healthcare plan attempts to do just that.”

    You make this concession, but subsequently argue that the state shouldn’t act to correct what seems to be a classical market failure. The market, in this case, failed to efficiently ‘deliver the goods’–healthcare to those who can’t afford it out-of-pocket. There are no market incentives to cover those who would represent a monetary loss, i.e. those most likely to use the coverage the company provides. Hence, the state acts to provision that good or service. Infrastructure is one example; public education is another. State monopolies primarily exist in sectors where market incentives were lacking or largely absent. If you can accept the premise that the state should sometimes intercede and regulate market activity, why, then, is it unacceptable to argue that it should do the same in an area where the same private market has failed to provide 45-50 million people with coverage at all, and a far greater number with adequate coverage (i.e. the ‘underinsured’)?

    “Smothered by Obama’s promises of quality healthcare for everybody, the rhetoric of socialized medicine sounds much better than its ugly reality. ”

    What reality? Even in the U.K., where medical care is , in fact, ‘socialized’, there is no political will to privatize or otherwise scrap the NHS. In Canada’s more moderate system, sometimes termed ‘social insurance’ (public funding, private provision) the same is largely the case. So if ‘socialized medicine’ is such a bogeyman, why has it existed with no significant challenges, in some cases for over 60 years, wherever it’s been implemented?

    ” Estimates range from 1.5 to 2 trillion dollars at the very least. Regardless, the government will still have to ration its services among the population, causing a critical shortage in the supply of available healthcare.”

    Gee, golly! Good thing rationing isn’t happening now! Insurance companies almost never retroactively rescind coverage or deny it altogether on the basis of a ‘pre-existing condition’! Medical costs definitely aren’t one of the leading causes of bankruptcy, and nobody ever opts to forego care!

    “Polls show that 89% of Americans are satisfied with their current private coverage.”

    Are the uninsured satisfied with their coverage?

  4. Lily says:

    A few years back, Paul Krugman (Nobel Prize-winning pro-market economist) wrote a series of excellent opinion pieces in the New York Times dealing with the question of private health insurance from an economic standpoint. Basically, he argued that, in the case of health insurance, for-profit HMOs and insurance companies actually result in *less* efficiency–because the amount of money they make depends on paying as little to providers as possible, it makes economic sense for them to devote resources to trying to deny people’s claims. This results in a large bureaucracy devoted to this–and the result it that a) premiums go up to fund the bureaucrats, and b) when someone files a claim, it’s less likely to be approved–in short, the patient is more likely to either have to forgo health care or pay out-of-pocket (the leading cause of personal bankruptcy in the US is medical bills).
    The US spends more per capita on health care than any other country in the world. At the same time, according to the WHO, we have the 37th best medical system in the world–placing us squarely behind the rest of the industrialized countries. Furthermore, we’re the only industrial Western country without a public health insurance system, and as a result of that, we’re also the only one with tens of millions uninsured and tens of millions more with inadequate insurance.
    Bottom line, the numbers just don’t add up–we pay more and get less which is made available to fewer people.

    A second concern is the validity of the insurance model for paying for medical care–after all, the basis of any insurance policy is risk. If the unwanted event occurs, then there’s a payout of greater value than the premiums put together, but overall, all of the premiums everyone pays are greater than the total amount of payouts.
    However, this doesn’t apply to medicine. Once a “preexisting” or chronic condition is diagnosed, then there’s no longer a risk of needing medical care–there’s a certainty. And no insurer will cover someone who’s guaranteed to be unprofitable if it can help it. The result in the real world? The people who are denied health insurance are precisely those who need it most–the sickest people who need the costliest, largest-scale treatments. It’s something that would never fly in any other industrial-Western country, or in any country where the historically powerless have any significant voice over public policy: we deny people the means to pay for health care *precisely because they need health care the most.*

    And, lest anyone doubt that this really does happen, let me bring up a personal example: I’ve been diagnosed with both bipolar and Tourette’s. Because of that, as soon as I turn 22, my parents’ health insurance won’t cover me any more. I’m on more than one pill, and I will be for the rest of my life. Thus, from a purely economic perspective, under a private-insurance system, I’m not a worthwhile investment, and therefore will not be permitted to purchase health insurance. All of this is well and good if you’re and HMO–after all, that’s a net loss that you’ve just avoided. However, if you look at it from my perspective, it means that I get to pay thousands of dollars more every year than what I otherwise would for the pills I need, and that if I’m in an accident or develop another serious condition, I won’t have any sort of help paying for that either–and even a brief hospital stay can cost tens of thousands of dollars for the uninsured, all payed out of pocket.

    Bottom line? We already have the most expensive health care bureaucracy in the world. We deny care to people solely because they need it. We have tens of millions of people who have no safety net if they get sick. And, finally, we pay more per capita for this mess than other countries do for their far superior systems. Do the math.

    PS According to a Gallup poll a couple of years back (I believe it was in 2003), more than 60% of the American public said they would support “a public health care system funded by taxes and managed by the government” to what we have now. So, if the gov’t is there to do what we want…

  5. Devin says:

    “Individual motivation, invention and innovation inspire an economy to a greater prosperity.”
    -Adam Smith

    Simple but true. The reason why a government run health care program will never work. The reason the system is screwed up right now is that the tax system encourages the kind of insurance program we have right now.

    http://www.theatlantic.com/doc/200909/health-care

    That’s a good article you might like to check out. Good luck!

  6. Wait? Is she playing the lead in Something Borrowed or the page , shallow friend that will star in Something Green ? (Yes, I read them. Don’t judge me.)

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