Tag: medicaid

What Do The Economist’s Bloggers Think a Free Market Is, Anyway?

A correspondent for The Economist, whose initials are M.S., posts this on the Democracy in America blog:

[T]he new health-care-reform law passed in March is an entirely private-insurer, free-market-based reform. If someone were to refer to it as a “government takeover of the health-care sector”, that person would hold a factually incorrect ideological belief.

I wonder what convinced M.S. that the new health care law is an entirely free-market-based reform.  Was it the expansion of the government’s Medicaid program to another 16 million Americans?  Was it the 19-million-plus other Americans who will receive government subsidies to purchase private health insurance? Was it the new price controls that the law imposes on health insurance?  Or the price and exchange controls that it will extend to even more of the market?  Was it the dynamics those regulations set in motion, which will reduce variety and innovation in health insurance?  Was it the mandates that require private actors to spend their resources according to the wishes of the state?  Or the new federal regulations that will shape every health insurance plan in the United States, whether purchased through the employer-based market, the individual market, or the new health insurance “exchanges”?  Was it the half-trillion dollars of (explicit) tax increases over the next 10 years?  

I wonder what it is about this law that M.S. thinks is consonant with the principles of a free market.  Perhaps we have a different idea of what “free” means.

M.S. lists other “factually incorrect beliefs,” including:

that the Clinton plan would deny patients their choice of doctor, and that the health-care-reform bills in Congress at the time involved government “death panels” that could decide to withhold care from elderly patients on a cost-benefit basis.

I won’t dredge up the Clinton health plan.  But I have previously demonstrated that, when Sarah Palin claimed that President Obama wanted to give a government panel the power to deny medical care to the elderly and disabled based on cost-effectiveness criteria, the president had in fact proposed a panel with the power to do exactly that.

I agree with M.S. about this much: “once people are exposed to false information, it’s extremely difficult to convince them it’s false.”

The Faux Compassion of Club Sarkozy

Shortly after President Obama signed his health care law, French president Nicolas Sarkozy offered this backhanded compliment to the United States: “Welcome to the club of countries that does not dump its sick people.

In this month’s Diplomat magazine (U.K.), I explain pourquoi c’est fou:

Every member of Sarkozy’s “club” has its stories of sick people who have been “dumped,” in one manner or another, despite laws that officially preclude such things from ever happening. In 2005, Canada’s Supreme Court wrote of its country’s Medicare system: “Access to a waiting list is not access to healthcare…[T]here is unchallenged evidence that in some serious cases, patients die as a result of waiting lists for public health care.” The British, meanwhile, often seem more content to let the National Health Service shortchange its patients than to let an American lecture them about how often it happens.

The checkered history of government guarantees is why so many Americans – a majority, in fact – oppose President Obama’s new law, which they believe will move the United States even further from Sarkozy’s ideal world than it is now.

Presidents Obama and Sarkozy may prefer the false compassion of a government guarantee.  I’ll take the real thing.

Repeal the bill.

By Pulling His Punches, Bernanke Shatters ObamaCare’s Credibility

Federal Reserve Chairman Ben Bernanke gave a speech in Dallas yesterday where he inadvertently discredited claims that ObamaCare would reduce health care costs and the federal deficit.  According to The Washington Post:

Federal Reserve Chairman Ben S. Bernanke warned Wednesday that Americans may have to accept higher taxes or changes in cherished entitlements such as Medicare and Social Security if the nation is to avoid staggering budget deficits that threaten to choke off economic growth…

While the immediate audience for the speech was the Dallas Regional Chamber, his message was intended for Congress and the Obama administration…

Bernanke has urged Congress to address long-term fiscal imbalances in congressional testimony before, but usually only when he is asked about them by lawmakers. His speech Wednesday aimed to reach a broader audience, steering away from technical economic speak and using plain, sometimes wry, language – a rare thing for a Fed chairman.

The non-partisan Congressional Budget Office projects the annual federal deficit will be at least $700 billion in each of the next 10 years.  Deficit spending is a form of taxation without representation, because it increases the tax burden of generations who cannot yet vote (often because they are as yet unborn).  Bernanke wants us to end deficit spending.  Kudos to him.

But consider the timing of his speech.  Why wait until April 7, 2010, to deliver that message directly to the public?  Why not give that speech in January? Or February? Or any time before March 21?

The reason is obvious: Bernanke held back to appease his political masters.

Until three weeks ago, the nation was locked in a debate over whether Congress should enact ObamaCare, the most sweeping piece of social legislation in American history.  That law includes two new health care entitlements – the very type of government spending driving the federal budget further into the red.  Democrats rigged the bill so that the CBO was obliged to score it as deficit-reducing, but 87 percent of the public weren’t buying it.

If Bernanke really wanted to warn the American public about the dangers of rising budget deficits, then a congressional debate over creating two new entitlement programs would be the most important time to deliver that message.  Democrats would have responded that ObamaCare would reduce the deficit.  But since voters believe ObamaCare to be a budget-buster, Bernanke’s warning would have dealt ObamaCare a serious blow.

Had Bernanke delivered his populist warning before January 28, it could have jeopardized his confirmation by the Senate to a second term as Fed chairman.  Had he done so between January 28 and March 21, he would have suffered a storm of criticism from Democrats (and possible retribution when his term came up for renewal in 2013) because his sensible, responsible warning would have made moderate House Democrats more skeptical about ObamaCare’s new entitlements.

So Bernanke pulled his punches.  As Dick Morris would put it, anyone who doesn’t think that political concerns affected Bernanke’s timing is too naive for politics.

Bernanke’s behavior thus reveals why ObamaCare’s cost would exceed projections and would increase the deficit.

Knowledgeable leftists, notably Tom Daschle and Uwe Reinhardt, recognize that Congress is no good at eliminating wasteful health care spending because politics gets in the way.  (Every dollar of wasteful health care spending is a dollar of income to somebody, and that somebody has a lobbyist.)

The Left’s central planners believe they can contain health care costs by creating an independent government bureaucracy that sets prices and otherwise rations care without interference from (read: without being accountable to) Congress.  ObamaCare’s new Independent Payment Advisory Board is a precursor to what Daschle calls a “Health Fed,” so named to convey that this new bureaucracy would have the same vaunted reputation for independence as the Federal Reserve.

Yet Fed scholar Allan Meltzer reports, and Bernanke’s behavior confirms, that not even the hallowed Federal Reserve can escape politics:

In reading the minutes of the Fed and watching what they do, the Fed has always been very much afraid of Congress…The idea of having a really independent agency in Washington, that’s just not going to happen…[The Fed] is very much concerned — always — about what the Congress is doing, and doesn’t want to deviate very far from that.

Politics affects Bernanke’s behavior and the Fed’s behavior.  Politics will defang the Independent Payment Advisory Board, and many of  ObamaCare’s other purported cost-cutting measures.  ObamaCare’s cost will outpace projections. The deficit will rise.

Repeal the bill.

On ObamaCare, Don’t Put Your Faith in the Courts

Now that the Obama health plan is law, more than a dozen states are asserting that Congress has exceeded its Commerce Clause power in imposing a mandate on individuals to purchase health insurance from private companies. No doubt, individual citizens will challenge the individual mandate on their own behalf.

States are also asserting that the threat to withhold all Medicaid payments if the states do not set up health insurance exchanges and enact other regulations amounts to coercion and unconstitutional commandeering of states by the federal government.

No one who opposes ObamaCare should put their faith in the Supreme Court to strike down an act of Congress, no matter how unprecedented and unconstitutional it may be. Nor should those who support ObamaCare be confident that the Supreme Court will uphold these provisions.

Legal challenges cannot take the place of political action. The Court hates to strike down popular legislation, but if the legislation is unpopular, one or both houses of Congress have changed parties and only a filibuster or presidential veto is preventing repeal, then the Court may feel more comfortable upholding the Constitution.

The States Respond to ObamaCare

Today Politico Arena asks:

Do the 13 state attorneys general have a case against ObamaCare?

My response:

Absolutely.  It will be an uphill battle, because modern “constitutional law” is so far removed from the Constitution itself, but a win is not impossible.  There are three main arguments.  (1) Under the Constitution, as properly interpreted, Congress has no power to enact such a plan.  (2) The plan conscripts state governments into carrying out and paying for federal mandates.  And (3) the individual mandate amounts to an unlawful capitation or direct tax.

The first argument will almost certainly lose, because under post-1937 readings of the Commerce Clause, Congress can regulate anything that “affects” interstate commerce, which at some level is everything.  Under modern “constitutional law,” that’s what we’ve come to – under the pressure of FDR’s infamous Court-packing scheme, a Constitution authorizing only limited government has been turned into one that authorizes effectively unlimited government.

The second argument has promise: In New York v. United States (1992) and Printz v. United States (1997) the Court held that the federal government could not dragoon state legislatures or executives into carrying out and paying for federal programs.  Yet that is just what’s at issue here with the “exchanges” that states are required to establish.  To be sure, the states can “opt out,” but as yesterday’s suit argues, with so many people already on the Medicaid rolls, that option is effectively foreclosed.  Indeed, the new bill will force millions more on to the Medicaid rolls, which is one of the main reasons these states, already strapped by Medicaid expenditures, have brought suit.  Florida alone estimates that the added costs will grow from $149 billion in 2014 to $938 billion in 2017 to over one trillion dollars by 2019.

The third argument holds the most promise.  ObamaCare compels individuals to buy insurance from a private company (why stop there? why not cars from GM?), failing which they will be required to pay a tax (fine?).  This is an unprecedented expansion of Congress’s power “to regulate interstate commerce.”  But even if it were to pass the modern Commerce Clause test, the tax should fail because it’s not apportioned among the states in accordance with their population.

Let’s be clear, however.  This suit was brought because the 13 states (and I predict more will follow) see the handwriting on the wall.  ObamaCare will mark the effective end of federalism as we’ve known it, will bankrupt the states, and, because of that – here’s the clincher – is but a  stalking horse for federal single-payer health care in America.  This suit will keep the issue alive until November, when the American people will have a chance to weigh in.

Federal Health Spending

When describing spending growth in federal programs, I often need to use words like “soaring” and “explosive.” But growth in federal health spending is almost beyond superlatives to describe it, and it will increase even faster as a result of President Obama’s new health legislation.

This chart shows total real spending by the Department of Health and Human Services, which includes the Medicare and Medicaid programs. Spending has increased almost nine-fold since 1970, and that’s after adjusting for inflation. And note how the slope of the bars increased around 1990. Health spending is truly skyrocketing and Obama has just put us into orbit.

(Data from the federal budget, historical tables, table 4.1, as deflated)

Would ObamaCare Improve Public Health? Probably Not.

George Avery is an assistant professor of public health at Purdue University.  In today’s Daily Caller, Avery rebuts claims that the Obama health plan would improve public health:

The idea that health care contributes significantly to population health is both intuitively appealing and untrue….

In fact, federal “reform” often hurts the public health system. Both public health and health care experts have criticized Medicare and Medicaid, enacted by Congress in 1965, for changing the focus of health care practitioners from prevention to treatment….

Requiring all Americans purchase health insurance, which the current bills hope to do, would not address the underlying socio-economic issues at the root of most public health problems….

Indeed, access to health care can help individual patients, but can also aggravate some public health problems…. High rates of surgical intervention increase the risk and spread of drug resistant infections like MRSA.

Avery is the author of the Cato Institute briefing paper, “Scientific Misconduct: The Manipulation of Evidence for Political Advocacy in Health Care and Climate Policy.”