Yet Another Reason to Reject Universal Coverage

Today, National Review Online published an article by Kent Masterson Brown that argues:

Among the dangers of universal coverage is that when the system fails, patients may find they no longer have freedom to spend their own money to get the medical care they need. This threat to patient autonomy exists right here at home in the U.S. Medicare program…

In 2006, the California legislature passed a universal coverage plan that provided, “No health care service plan contract or health insurance policy, except for the [state] plan, may be sold in California for services provided by the [state-run] system.” Only a veto by Gov. Arnold Schwarzenegger (R.) prevented the California legislature from outlawing private health insurance for most medical services…

When [Hillary] Clinton and others claim that their proposals for universal coverage would expand patient choice, they should explain whether that includes the choice to spend their own money on medical care.

The article is based on a study Brown authored for the Cato Institute titled, “The Freedom to Spend Your Own Money on Medical Care: A Common Casualty of Universal Coverage.” 

Yet another reason why Americans – and especially conservatives – should reject the goal of universal coverage.

Heck of a Job, Smokey!

A couple of weeks ago, the Secretary of Agriculture proudly gave the Chief of the Forest Service an award for “exemplary leadership and accomplishment in reducing the risk of catastrophic fire to both the wildland and Wildland Urban Interface areas through the U.S. Forest Service Hazardous Fuels Program supporting the President’s Healthy Forests Initiative.”

This award would be ironic even if fires in California had not burned hundreds of homes and hundreds of thousands of acres this week. Prior to the southern California inferno, wildland fires had already burned well over 1,800 structures and more than 8 million acres in 2007.

In fact, President Bush’s signing of the Healthy Forests Act in 2003 seemed to signal a huge increase in fires. In the decades prior to 2003, an average of about 4 million acres burned each year and only one year had topped 8 million. Since then, the number of acres burned has never been less than 8 million.

The real problem is too much money: Congress has given the Forest Service a virtual blank check for fire suppression. The agency – perhaps subconsciously realizing that it needs a sustained number of homes burned each year to keep Congress’ interest in giving it money – has not adopted policies aimed at cost-effectively protecting homes. Instead, it merely promises that it will save homes through fire suppression – a promise that it cannot keep.

The result is that homeowners – expecting that the Forest Service will apply massive resources to save their homes – do not make the efforts needed to protect their structures from fires. Those efforts are not very much: mainly applying a nonflammable roof and keeping flammable vegetation to a minimum within 100 to 150 feet of their homes. Those efforts are really all that is needed. In fact, some housing developments have been treated to be so safe from fire that residents are advised to stay in their homes during a fire rather than to evacuate.

For a thorough analysis of Forest Service fire policy, read my Cato policy paper, The Perfect Firestorm. For a review of the recent fires, see my Antiplanner blog.

The Massachusetts Canary

Maggie Mahar reports on how things are going in Massachusetts, with its much-touted health reform:

Uninsured citizens earning more than 300% of the poverty level are expected to buy their own insurance. Here, the state hoped that 228,000 of its uninsured citizens would sign up. So far, just 15,000 have enrolled. Apparently, they’ve done the math and decided that it would be cheaper to pay the penalty. But their premiums are needed to keep the program going. If more in this group don’t sign up, it is not at all clear how the state will be able to continue subsidizing the poor.

Yesterday’s first speaker, Robert Blendon, a professor of Health Policy in Harvard’s Department of Health Policy and Management, talked about what Massachusetts experience might mean for the national health care debate: “Massachusetts is the canary in the coal mine,” Blendon declared bluntly. “If it’s not breathing in 2009, people won’t go in that mine.”

See also this post, where Mahar writes,

But the underlying reason people in Massachusetts have become accustomed to such lavish care is not that they are naturally more demanding than people in other states. Rather, high consumption of care is driven by the fact that the state is a medical Mecca, crowded with academic medical centers, specialists and the equipment needed to perform any test the human mind is capable of inventing.

In December of 2005, in The Weekly Standard, I wrote

if I were going to pick a state in which to attempt an experimental health care financing reform, it would not be Massachusetts. Massachusetts, with its outstanding medical schools and world-class hospitals, is rich in the suppliers of premium medicine, and abundant supply has been shown to drive up usage.

Mahar and I are almost exactly in alignment on health care policy. We agree on the diagnosis–Americans make extravagant use of medical procedures with high costs and low benefits. Mahar and I only differ in our prescriptions. Go figure.

Go read both of Mahar’s posts.  There is more worth reading than what I excerpted.

Although Government Revenues Are at Record Levels, New York Times Complains About a “Dearth of Taxes”

In a remarkable editorial, the New York Times complains that revenues in America are too low. This is a stunning claim since a cursory look at budget numbers shows that revenues are at an all-time high in both nominal dollars and inflation-adjusted dollars. But the most remarkable part of the editorial is that the Times actually argues that low taxes mean that America is “ill prepared to compete”:

…the taxes collected last year by federal, state and local governments in the
United States amounted to 28.2 percent of gross domestic product. That rate was one of the lowest among wealthy countries - about five percentage points of GDP lower than Canada’s, and more than eight points lower than New Zealand’s. …the meager tax take leaves the United States ill prepared to compete. From universal health insurance to decent unemployment insurance, other rich nations provide their citizens benefits that the U.S. government simply cannot afford. …revenue will prove too low to face the challenges ahead.

The editorial conveniently forgets to explain, though, how America is less competitive because of supposedly inadequate taxation. Is it that our per capita GDP is lower than our higher-taxed neighbors in Europe? No, America’s per capita GDP is considerably higher. Is it that our disposable income is lower? It turns out that Americans enjoy a huge advantage in this measure. Is our economy not keeping pace? Interesting thought, but America’s been out-performing Europe for a long time. Could higher rates of unemployment be a sign of American weakness? Nice theory, but the data show better job numbers in the United States.

But give the New York Times some credit. It is not easy to argue that higher taxes are good for growth. So if you’re going to make a fool of yourself, you may as well cast evidence to the side and jump into the deep end of the pool.

When Fact-Checkers Get Sloppy

Washingtonpost.com’s “Fact Checker” dings Mitt Romney for the following claim:

We solved the problem of health care in [Massachusetts] not by having government take it over, the way Hillary Clinton would [but] with private, free-enterprise approaches … Hillary says the federal government’s going to tell you what kind of insurance, and it’s all government insurance.

Noting that Clinton would merely give Americans the choice of enrolling in Medicare or a similar government-run program, the Fact Checker concludes:

The claim that “Hillary care” is tantamount to “socialized medicine” does not stand up to serious examination. The Clinton health care plan has more in common with the Massachusetts plan signed into law by Governor Mitt Romney than the British National Health system. We award three Pinocchios to Romney.

Not so fast. The Fact Checker seems to assume that it’s only “socialized medicine” if the government provides the insurance directly. But really, what’s the difference between:

  1. A system where the government takes your money and decides what type of health insurance you’ll get (i.e., socialized medicine); and
  2. A system where the government lets you keep your money, but forces you to spend it on health insurance and dictates what type of insurance you’ll buy (i.e., RomneyCare or HillaryCare)?

Either way, government controls the resources. The Fact Checker is incorrect if he thinks that HillaryCare or RomneyCare are any less “socialized” just because the health insurance is nominally private.

Of course, Romney does claim that HillaryCare is “socialized medicine” while RomneyCare is “free-enterprise.” So the Fact Checker can still ding him for that.

The Liberaltarians Are Coming…

… and Harold Meyerson is not pleased!

In his Washington Post column today, Meyerson bemoans the sinister influence of “Wall Street Democrats”:

The younger masters of the universe who work on Wall Street like as not are liberal on cultural issues and appalled at Republican foreign policy, though they’re no fans of regulating capitalism. They give big-time to such Democrats as Barack Obama (who supported legislation moving class-action lawsuits from state to federal courts, a bill intended to reduce the size of jury awards in such lawsuits) and Chuck Schumer (who has opposed a fairer tax rate for hedge fund operators)….

The problem is that the drift of much of Wall Street toward the Democrats on noneconomic issues coincides with Wall Street’s creation of inscrutable and unregulated investment devices that imperil the entire economy, as the current mortgage crisis makes painfully clear. On gay rights, say, the nouveau financiers are 21st-century progressives; on economic oversight, they are 1920s speculators, determined to keep their machinations free from public oversight.

Last year, in a piece called “Liberaltarians,” I wrote that conservatism’s crackup had created the possibility that libertarian-leaning “economically conservative, socially liberal” types might shift their loyalties to the Democratic Party. I was urging liberals to meet them halfway, and that certainly hasn’t happened yet. But maybe it doesn’t matter.

After all, if small-government voters come to think of themselves as Democrats because of social and foreign policy issues, sooner or later they’ll try to make their influence felt on economic matters as well. Will they be able to make a discernible impact on the Democratic Party’s longstanding love affair with Big Government? Who knows, but the very idea is giving Harold Meyerson heartburn – and, surely, that’s an encouraging sign.

[cross-posted from www.brinklindsey.com]

The Mitt-Hillary “Connection,” Part V

Washingtonpost.com’s “Fact Checker” cites yet another knowledgeable observer on the similarities between the health care reforms that Mitt Romney enacted while governor of Massachusetts, and those proposed by Romney’s fellow presidential candidate Hillary Clinton:

According to MIT economics professor Jonathan Gruber, who advised Romney on his health care reform law and has also advised Clinton, the Massachusetts law has a lot in common with the Clinton plan. Both plans mandate universal health care coverage and subsidize health care for people on low incomes. The main difference is that Clinton’s proposal permits people to switch to a Medicare-type plan and increases taxes at higher income levels.

In a previous post on this topic, I wrote:

The Cato Institute was the first to note the similarities between RomneyCare and the 1993 Clinton health plan. The New Republic ($) and The Washington Post soon followed.

I wonder who will be next?

The answer: a well-respected advisor to Gov. Romney, who also advised Sen. Clinton.