Tag: health plan

Wednesday Links

Summing Up Obama’s Health Care Address

Cato health care experts dissected President Obama’s address Wednesday night, providing live commentary throughout the speech.

Overall impressions:

Michael D. Tanner:  Can’t see this as a game-changer. I would give him an ‘A’ on delivery, but at best a ‘C’ on substance.   There were surprisingly few details and very little new.

Patrick Basham:  Strikingly political/partisan rather than statesmanlike speech. Obama chose to pressure Republicans to support his plan rather than attempt to persuade them to do so. He risks a another wave of (effective) opposition from conservative talk radio  & cable TV.

Michael F. Cannon:  Translation: My health plan cannot work if you are free to make your own decisions.

Mr. President, Here Is Our Answer

President Obama continues to portray the debate over health care reform as a choice between his plan for a massive government-takeover of the US healthcare system and “doing nothing.”  Those who oppose his plan are said to be “obstructionist” or in favor of the status-quo.  Yesterday, the President again said, “I’ve got a question for all those folks [who oppose his plan]: What are you going to do? What’s your answer? What’s your solution?”

Well, I can’t speak for all his critics, but the Cato Institute has a long record of supporting health care reform based on free-markets and competition.  If the President wanted to know more he might have read my recent op-ed in the Los Angeles Times or Michael Cannon’s piece in Investors Business Daily.  He could have read our book, Healthy Competition.  Or he might have just gone to healthcare.cato.org and read our plan:

  • Let individuals control their health care dollars, and free them to choose from a wide variety of health plans and providers.
  • Move away from a health care system dominated by employer-provided health insurance. Health insurance should be personal and portable, controlled by individuals themselves rather than government or an employer. Employment-based insurance hides much of the true cost of health care to consumers, thereby encouraging over-consumption. It also limits consumer choice, since employers get final say over what type of insurance a worker will receive. It means people who don’t receive insurance through work are put at a significant and costly disadvantage. And, of course, it means that if you lose your job, you are likely to end up uninsured as well.
  • Changing from employer to individual insurance requires changing the tax treatment of health insurance. The current system excludes the value of employer-provided insurance from a worker’s taxable income. However, a worker purchasing health insurance on their own must do so with after-tax dollars. This provides a significant tilt towards employer-provided insurance, which should be reversed. Workers should receive a standard deduction, a tax credit, or, better still, large Health Savings Accounts (HSAs)  for the purchase of health insurance, regardless of whether they receive it through their job or purchase it on their own.
  • We need to increase competition among both insurers and health providers. People should be allowed to purchase health insurance across state lines. One study estimated that that adjustment alone could cover 17 million uninsured Americans without costing taxpayers a dime.
  • We also need to rethink medical licensing laws to encourage greater competition among providers. Nurse practitioners, physician assistants, midwives, and other non-physician practitioners should have far greater ability to treat patients. Doctors and other health professionals should be able to take their licenses from state to state.   We should also be encouraging innovations in delivery such as medical clinics in retail outlets.
  • Congress should give Medicare enrollees a voucher, let them choose any health plan on the market, and let them keep the savings if they choose an economical plan. Medicare could even give larger vouchers to the poor and sick to ensure they could afford coverage.
  • The expansion of “health status insurance” would protect many of those with preexisting conditions. States may also wish to experiment with high risk pools to ensure coverage for those with high cost medical conditions.

Mr. President, the ball is back in your court.

Friday Links

  • Nearly 30 European countries have agreed to end their government mail monopolies in the next five years. The U.S. Postal Service has estimated losses of $7 billion this year. It’s time to privatize.

False Accounts of Massachusetts’ Health Reforms

Recent editorials in both the Boston Globe and The New York Times contained some staggering falsehoods about the cost of Massachusetts’ health reforms.  Here is a poor, unsuccessful letter I sent to the editor of the Globe:

The editorial “Mass. bashers take note: Health reform is working” [Aug. 5] states that “the cost to the state taxpayer” of the Massachusetts health reforms is “about $88 million a year.”  That claim is unquestionably false.  The cost to state taxpayers is 19 times that amount, while the total cost is 24 times that amount.

The Massachusetts Taxpayers Foundation explains that the $88-million figure represents not the total cost to the state government, but the average annual increase in the state government’s costs.  Worse, the editorial completely ignores new spending by the federal government and the private sector, which account for 80 percent of the law’s cost.

According to Massachusetts Taxpayers Foundation estimates, health reform will cost at least $2.1 billion in 2009.  The total cost to state taxpayers is at least $1.7 billion and growing.  (The fact that other states’ taxpayers bear the balance should not be a source of pride.)

One wonders how such a falsehood comes to appear on a leading editorial page.

And one I sent to the Times:

The Massachusetts Model” [Aug. 9] understates the cost of the Massachusetts health plan.

The editorial claims, “the federal and state governments each pa[y] half of the added costs, or about $350 million” in 2010.  The Massachusetts Taxpayers Foundation, which generated that estimate, assumes that Massachusetts will eliminate $200 million in subsidies to safety-net hospitals next year.  Given that those hospitals are currently suing the Commonwealth and exerting political pressure to increase such payments, those assumed cuts are hypothetical.  More certain is the foundation’s estimate that the on-budget cost will reach $817 billion in 2009.

Yet the foundation’s estimates also show that the law (1) pushes 60 percent of its cost off-budget and onto the private sector; (2) costs about three times the $700 million that the editorial suggests, and (3) is covering 432,000 previously uninsured residents at a cost of about $6,700 each, or $27,000 for a family of four.  That’s more than twice the average cost of family coverage nationwide.

The editorial admonishes that “the public should demand an honest assessment, from critics and supporters” of the Massachusetts health plan.  Indeed.

A fuller response to these spurious claims may be found here.

I wish I could run a newspaper, so I could print false stuff and then not correct it.  Oh wait, I do blog…

About Those Health Care “Co-Ops”…

Having Congress charter a health insurance “cooperative” is just another way of creating a new government-run program that would drive private insurers out of business.

The definition of a cooperative is a health plan governed by its enrollees. Since a government chartered co-op won’t have any enrollees at first, it will be governed like any other government program. So when the Obama administration and congressional Democrats say, “We’re going to create a co-op,” what they mean is, “We’re going to create a new government health program but we will turn it over to the members in five years. We promise.”

As I explained in a recent Cato study, a government-chartered co-op would become just another Fannie Med:

It makes no difference whether a new program adopts a “co-operative” model or any other. The government possesses so many tools for subsidizing its own program and increasing costs for private insurers—and has such a long history of subsidizing and protecting favored enterprises—that unfair advantages are inevitable.

Who was it that said that thing about putting lipstick on a pig?