Tag: Medicare

Democrats Agree on Health Plan Outline: Be Afraid, Be Very Afraid

The New York Times reports that key congressional Democrats have agreed on the basic provisions for a health care reform bill.  And while many details remain to be negotiated, the broad outline provides a dog’s breakfast of bad ideas that will lead to higher taxes, fewer choices, and poorer quality care.

Among the items that are expected to be included in the final bill:

  • An Individual Mandate. Every American will be required to buy an insurance policy that meets certain government requirements.  Even individuals who are currently insured – and happy with their insurance – will have to switch to insurance that meets the government’s definition of acceptable insurance, even if that insurance is more expensive or contains benefits that they do not want or need.  Get ready for the lobbying frenzy as every special interest group in Washington, both providers and disease constituencies, demand to be included.
  • An Employer Mandate. At a time of rising unemployment, the government will raise the cost of hiring workers by requiring all employers to provide health insurance to their workers or pay a fee (tax) to subsidize government coverage.
  • A Government-Run Plan, competing with private insurance.  Because such a plan is subsidized by taxpayers, it will have an unfair advantage, allowing it to squeeze out private insurance.  In addition, because government insurance plans traditionally under-reimburse providers, such costs are shifted to private insurance plans, driving up their premiums and making them even less competitive. The actuarial firm Lewin Associates estimates that, depending on how premiums, benefits, reimbursement rates, and subsidies were structured, as many as 118.5 million would shift from private to public coverage.   That would mean a nearly 60 percent reduction in the number of Americans with private insurance.  It is unlikely that any significant private insurance market could continue to exist under such circumstances, putting us on the road to a single-payer system.
  • Massive New Subsidies. This includes not just subsidies to help low-income people buy insurance, but expansions of government programs such as Medicaid and Medicare.
  • Government Playing Doctor.   Democrats agree that one goal of their reform plan is to push for “less use of aggressive treatments that raise costs but do not result in better outcomes.”  While no mechanism has yet been spelled out, it seems likely that the plan will use government-sponsored comparative effectiveness research to impose cost-effectiveness guidelines on medical care, initially in government programs, but eventually extending such restrictions to private insurance.

Given the problems facing our health care system-high costs, uneven quality, millions of Americans without health insurance–it seems that things couldn’t get any worse.   But a bill based on these ideas, will almost certainly make things much, much worse.

Or maybe it’s all just a massive April Fool’s joke.

This Is Why Universal Coverage Is a Religion — and Not about Compassion or Saving Lives

I was invited to participate in an email/online/sorta exchange for the Washington Post yesterday.  Unfortunately, the effort was spiked after just a few rounds of emails.  But rather than let my participation go to waste, I thought I’d post one exchange that I think highlights why I’m not just being colorful when I describe supporters of universal health insurance coverage as the Church of Universal Coverage.  I could summarize the exchange, but I’m lazy.  So I’ll just copy and paste.

I wrote:

All the interest groups are meeting with all the right politicians and making all the right noises, thus the Church of Universal Coverage says the stars have aligned for fundamental reform… Everyone is at the table right now because no one wants to be on the menu.  But when the Democratic leadership makes its intentions clear, today’s love-fest will turn into a bloodbath.

Andres Martinez of the New America Foundation (who owes me a taco al pastor) responded:

I am a proud member of the church, Michael.  As New America’s own recent study on the urgency of reform – which reads like a strong courtroom closing argument – noted, how can the world’s most prosperous nation afford to have tens of thousands of its citizens die each year because they lacked access to health care?  Health care reform is a moral imperative, so your reference to a church (um, even if sarcastic) is appropriate…

I replied:

The Institute of Medicine estimates that every year, about 20,000 Americans die because they lacked health insurance, but as many as 100,000 die from preventable medical errors.  What moral code compels the Church of Universal Coverage to solve the first problem before addressing the second?

Elise Gould of the Economic Policy Institute (whose working paper, “Who is Adversely Affected by Limiting the Tax Exclusion of Employment-Based Premiums?”, I am keen to read) chimed in:

In an answer to Michael’s post about the deaths caused by lacking health insurance as compared to those from preventable medical errors, I’d argue that it’s much easier to solve the second when you have people in a common system (i.e., solving the first).

Me again:

To say that universal coverage will make it easier to reduce medical errors is pure fantasy.

The principal reason we have too many medical errors is that fee-for-service payment dominates America’s health care sector, and fee-for-service rewards medical errors and punishes efforts at error reduction.  The reason fee-for-service dominates is government.  Medicare – the single-largest purchaser in the world – pays largely on that basis.  Ditto Medicaid.  And the federal tax code encourages fee-for-service by insulating consumers from the cost of their health coverage.  If you think it’s hard for government to change payment systems now, just wait until universal coverage gives government even more control over payment systems and makes even more providers dependent on those decisions for even more of their income.  (As an aside, when consumers control their health care dollars and choose their health plans, they can change payment systems in a heartbeat.)

This is why universal coverage is a religion: supporters believe that universal coverage has magical, supernatural powers to suspend political reality and the laws of economics.  I do not exaggerate.  See here and here.

Health care reform is a moral imperative.  But universal coverage is not a moral imperative, nor is it about compassion or saving lives.

For those who are interested, the Anti-Universal Coverage Club is still accepting new members.

Enzi Lays Down Health Care Marker

Sen. Mike Enzi (R-WY), the ranking Republican on the Senate’s Health, Education, Labor, and Pensions Committee, has a good op-ed in today’s edition of The Hill.

Enzi rather interestingly does not see Medicare Part D as an example of Congress “simply throwing more money at Medicare.”

That aside, Enzi stakes out a position against creating a new Medicare-like program to compete with private insurance, and against price controls in health care.  Those are two of the three positions I advised free-market advocates to take in this op-ed.

The third is a firm opposition to mandates that require individuals to purchase health insurance, whether directly or through an employer.  I’m sure Enzi’s saving that for his next op-ed.