Tag: Obamacare

Government Health Care in 1798

The 1798 ”Act for the Relief of Sick and Disabled Seaman”  is getting attention in the Washington Post and Forbes. The stories suggest that this act in the early republic was a precedent for socialized federal medicine today.

I offered this brief description of the law as  part of a timeline on the evolution of the federal Department of Health and Human Services over at www.downsizinggovernment.org:

1798: Congress passes the Act for the Relief of Sick and Disabled Seamen. It provides health services to members of the merchant marine and funds a loose network of hospitals through the Marine Hospital Fund. The MHF is plagued by cost overruns, administrative mismanagement, and rationing of care. Some leaders oppose the new federal subsidies as an abuse of state sovereignty.

My timeline entry has footnotes to sources for those statements.

On the politics of this, note that John Adams, who signed the bill into law as president, was on the “big government” end of the Founders, and his big-government approach in office in the 1790s–like signing the Alien and Sedition Acts–led to the ouster of the Federalists by Thomas Jefferson in 1800.  (Nonetheless, Adams was, of couse, a hero of the Revolution and a truly great man).

Talk of Replacing ObamaCare Is a Bit Premature

Now that a bipartisan coalition in the House has voted to repeal ObamaCare, an even larger bipartisan coalition has approved a Republican resolution directing four House committees to “replace” that ill-fated law.  House Resolution 9 instructs the committees to “propos[e] changes to existing law” with the following goals:

  1. “Foster economic growth and private sector job creation by eliminating job-killing policies and regulations.”
  2. “Lower health care premiums through increased competition and choice.”
  3. “Preserve a patient’s ability to keep his or her health plan if he or she likes it.”
  4. “Provide people with pre-existing conditions access to affordable health coverage.”
  5. “Reform the medical liability system to reduce unnecessary and wasteful health care spending.”
  6. “Increase the number of insured Americans.”
  7. “Protect the doctor-patient relationship.”
  8. “Provide the States greater flexibility to administer Medicaid programs.”
  9. “Expand incentives to encourage personal responsibility for health care coverage and costs.”
  10. “Prohibit taxpayer funding of abortions and provide conscience protections for health care providers.”
  11. “Eliminate duplicative government programs and wasteful spending.”
  12. “Do not accelerate the insolvency of entitlement programs or increase the tax burden on Americans;” or
  13. “Enact a permanent fix to the flawed Medicare sustainable growth rate formula used to determine physician payments under title XVIII of the Social Security Act to preserve health care for the nation’s seniors and to provide a stable environment for physicians.”

Three things about the Republicans’ “replace” effort:

First, America’s health care sector has historically been handicapped by one political party committed to a policy of (mostly) benign neglect, and another party committed to degrading that sector’s performance through government subsidies, mandates, price controls, and other exchange controls.  Republicans now appear to be taking a different posture, and that’s encouraging — but not entirely.  When Republicans set their minds to reforming health care, they are often as bad as Democrats.  (See the Republican “alternatives” to ClintonCare.  Or Medicare Part D.  Or #4-#7 above.)  Exactly how House Republicans plan to deliver on the above goals remains to be seen.

Second, no matter how House Republicans plan to deliver on the above goals, their proposals will be preferable to ObamaCare.  Republicans quite literally could not do worse if they tried.

Third, no matter how good the Republicans’ proposals are, they will be utterly ineffective so long as ObamaCare remains on the books.  ObamaCare’s influence is so pervasive and harmful that it makes real health care reform all but impossible.

So it’s a bit premature to be talking about replacing ObamaCare.

Majority of States for Repeal Too

It’s now official: 28 states are challenging the constitutionality of Obamacare in the courts. For those of you keeping score, the following six joined the Florida-led lawsuit: Ohio, Wisconsin, Iowa, Kansas, Wyoming and Maine. Then of course Virginia is pursuing its own suit, and now Oklahoma is about to file its own separate lawsuit based on its voters’ approval in November of a Health Care Freedom Act similar to Virginia’s.

Sadly – if I’m allowed to stop being hard-headed and just shake my head in an “o tempore o mores” sort of way – the government opposed Florida’s motion to add the six states to its lawsuit. There was no basis for this opposition: the newcomers are for these purposes similarly situated to the existing plaintiff states and raise no new legal arguments.

The district judge, Roger Vinson – who is expected to release an opinion shortly striking down at least parts of Obamacare – saw through the government’s cynical ploy. He granted the simple joinder motion the day after it was filed and without waiting for a formal reply from the Department of Justice, saying “…I can imagine no prejudice that could inure to the defendants in granting the plaintiffs’ motion, as the second amended complaint changes nothing in the case except for the caption and style, and will not delay its resolution. Indeed, because of this, I will relieve the defendants of the obligation to file an answer to the new complaint and will regard their previously-filed answer as an answer to the new complaint as well.”

This train is picking up steam, folks. But at least one political question remains: Why hasn’t New Jersey Governor Chris Christie, darling of the Tea Parties and all who like plain-speaking politicians, climbed aboard?

House Vote to Repeal ObamaCare Is More than Mere Symbolism

The symbolism of today’s House vote is striking. Within a year of ObamaCare’s enactment, the House of Representatives has voted overwhelmingly to repeal it.

That didn’t happen with Social Security. It didn’t happen with Medicare. Social Security and Medicare did not face sustained public opposition from the moment they were introduced in Congress. They did not pass by one vote, in the dead of night. They were not challenged as unconstitutional by half the states in the union.  They were not struck down as unconstitutional by a federal court within a year of enactment.

The House vote to repeal ObamaCare is just the latest sign that ObamaCare goes too far, that it creates a more intrusive government than the American people are willing to accept.

But the House vote is not mere symbolism, as the Obama administration would have us believe.  This vote has moved the ball forward on repeal.  This and further similar votes in both the House and Senate will reveal where members stand on repealing ObamaCare.  Voters may use that information to replace pro-ObamaCare members with people who will vote to repeal ObamaCare in the next Congress.  That’s how the political system works.

At the same time, this repeal vote makes it more likely that the Supreme Court will strike down ObamaCare. Like it or not, the Supreme Court follows the election returns. This vote shows the Court that it will not pay a price in the public’s esteem if it overturns ObamaCare.

Today’s vote makes it more likely that someone with the power to scrap ObamaCare will do so – and the Obama administration knows it.  Why else would they come out with both guns blazing against a purely “symbolic” act?

When that happens, it will be a good day for America. Real health care reform is impossible while ObamaCare remains on the books.

ObamaCare, Round 2

Today POLITICO Arena asks:

House Republicans are expected to approve a bill on Wednesday that would repeal the Obama health care law. But they are not yet offering a specific replacement for “Obamacare”. Will they pay a price politically for not immediately presenting an alternative? Or is the 2010 law sufficiently unpopular that repeal itself will be enough heading into the 2012 elections?

My response:

Does anyone really expect the scores of new House Republicans, who’ve just now arrived in Washington, to already have a plan to replace ObamaCare? Let’s be serious. The first step for new members is to keep their campaign promise by voting to repeal this unpopular scheme – if for none other than symbolic reasons. The next is to hold hearings and then to start defunding various of its provisions. And in the course of that, a better approach will emerge, one hopes. Remember, Republicans were shut out of the process that created ObamaCare.

Yet at the Arena this morning we see the usual Democratic responses. Timothy Jost writes, for example: ”Health care is rapidly becoming unfordable [sic]; to the government, to employers, to ordinary Americans.” So government, for which health care is becoming unaffordable, is going to solve that problem?! How? By printing money? By imposing price and service controls? That’ll be popular – with doctors and patients alike!

The basic problem is too much government in the health care arena. It’s anything today but a market. Those approaches that have reintroduce market forces – like health savings accounts – have worked quite well. We have them at Cato. We like them. But they won’t be allowed under ObamaCare. Why? Because the Democrats know what’s best for us. What’s best, they believe, is for us to be dependent on government for our health care. No thanks.

New Cato Study: ObamaCare’s Medicaid Mandate Imposes Staggering Costs on States

ObamaCare requires each state to open its Medicaid program to all legal residents earning up to 138 percent of the federal poverty level.  Supporters estimate this mandate will cost state governments little: the Kaiser Family Foundation’s worst-case-scenario estimates suggest that state Medicaid spending would rise by just 1.2 percent in New York and 5.1 percent in Texas between 2014 and 2019.

In a new working paper titled, “Estimating ObamaCare’s Effect on State Medicaid Expenditure Growth,” Cato Institute Senior Fellow Jagadeesh Gokhale shows that those estimates are generally far too low.  Gokhale finds that all of the five most-populous states – California, Florida, Illinois, New York, and Texas, which account for roughly 40 percent of U.S. population – will struggle to cope with rising Medicaid spending even without ObamaCare’s Medicaid mandate. But ObamaCare significantly increases that burden on four of them:

In its first year of full implementation (2014), ObamaCare will increase spending on Medicaid by 9.0 percent in Florida, 22.2 percent in Illinois, 6.4 percent in New York, and 13.5 percent in Texas. Spending in California is projected to be smaller by about 3 percent.

The cost grows over time.  The following chart shows the burden that ObamaCare’s Medicaid mandate will impose on these states over the first 10 years of full implementation:

Compared to a world without ObamaCare, state Medicaid spending will decline by 3 percent in California, but increase by 17.1 percent in Florida, 28.1 percent in Illinois, 16.5 percent in New York, and 12.9 percent in Texas over the first 10 years of full implementation.

On a per-taxpayer basis, ObamaCare’s Medicaid mandate is also highly inequitable:

for every $1 in costs imposed on each working-age Texas adult, Floridians and New Yorkers will pay about $1.50, Illinoisans will pay $3.60, while Californians will save a small amount (about 3 pennies).

Gokhale explains that the Kaiser Family Foundation’s projections are lower because they assume that ObamaCare’s individual mandate will not significantly increase enrollment among people who were eligible for Medicaid but not enrolled under the pre-ObamaCare rules.  Consistent with other research, Gokhale assumes the individual mandate will encourage people to enroll in Medicaid even if they would not face financial penalties for being uninsured.

Update (3/3/11): The chart and text were updated to reflect corrected numbers.

HHS Wildly Overstates the Problem of Pre-Existing Conditions — and Ignores Its Cause

On the eve of a House vote to repeal ObamaCare, the Department of Health and Human Services has released a report claiming that if repeal succeeds, “1 in 2 non-elderly Americans could be denied coverage or charged more due to a pre-existing condition.”  A few problems with that claim:

  • An HHS survey found that in 2001, only 1 percent of Americans had ever been denied health insurance.
  • Economists Mark Pauly and Len Nichols write, “the fraction of nonelderly uninsured persons…who would be rated as actuarially uninsurable is generally estimated to be very small, less than 1 percent of the population.”
  • RAND health economist Susan Marquis and her colleagues find that in markets that do not impose ObamaCare-style government price controls on health insurance, such as California’s individual market, ‘‘a large number of people with health problems do obtain coverage…Our analysis confirms earlier studies’ findings that there is considerable risk pooling in the individual market and that high risks are not charged premiums that fully reflect their higher risk.’’
  • It is true that insurers charge higher premiums to many people with pre-existing conditions – and it is crucial that they have the freedom to do so.  Risk-based premiums create virtuous incentives for people to buy insurance while they are healthy and to be cost-conscious consumers.  They also encourage insurers to develop innovative products that protect against the risk of higher premiums.  The real problem here is that the government has created an employment-based health insurance system that denies consumers the protections that unregulated markets already provide, as well as additional protections that insurers would develop absent this government intervention.
  • ObamaCare’s health-insurance price controls will encourage insurers to deny care to the very sick people those price controls are intended to help.
  • The Obama administration projected that 375,000 people would sign up for ObamaCare’s “Pre-Existing Condition Insurance Plans” by the end of last year. But only 8,000 people enrolled in such plans by December 2010, suggesting the demand isn’t nearly as great as the administration claimed.