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Cato Dispatch for October 23, 2009

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(Links to outside sources were active as of the date of this dispatch; however, not all news sources maintain links to current stories indefinitely. Some links also may require registration.)

A Free-Market Plan for Health Care

In a speech on health care reform in March 2009, President Obama said, "If there is a way of getting this done where we're driving down costs and people are getting health insurance at an affordable rate, and have choice of doctor, have flexibility in terms of their plans, and we could do that entirely through the market, I'd be happy to do it that way….I just want to figure out what works." In a new paper, Cato's Director of Health Policy Studies Michael F. Cannon explains how tearing down regulatory barriers to competition and allowing workers control over their health care dollars would limit costs, expand choice, improve health care quality, and make health coverage more secure.

Writing in Politico, Cannon proposes five ways to cure the health care system:

1. Give Medicare enrollees a voucher (adjusted for their means and health risk) and let them purchase any health plan on the market,

2. Reform the tax treatment of health care with "large" health savings accounts, which would give workers a $9.7 trillion tax cut (without increasing the deficit) and free them to purchase secure coverage that meets their needs,

3. Free consumers and employers to purchase health insurance across state lines (i.e., licensed by other states), which could cover up to one third of the uninsured,

4. Make state-issued clinician licenses portable, which would increase access to care and competition among health plans, and

5. Block-grant Medicaid and the State Children's Health Insurance Program, just as Congress did with welfare.

For more, visit Healthcare.Cato.org.

Obama Halts Raids on Medical Marijuana Sites

Under new policy guidelines from the Obama administration, federal drug agents won't pursue medical marijuana users and suppliers as long as they follow state laws. Cato scholar Tim Lynch applauds the move: "This shift in policy is more mindful of the constitutional principle of federalism by allowing the states to try different policy approaches, and it is more respectful of the division of opinion within the medical community about the benefits of marijuana for certain patients. This de-escalation of the drug war is good policy and is long overdue."

Lynch recently co-authored an op-ed with Cato scholar Juan Carlos Hidalgo that called on policymakers to take a note from other countries and move toward drug policy reform:

Drug policy reform is moving even faster abroad. In 2001, Portugal decriminalized all drugs, including cocaine and heroin. Not only has the predicted spike in drug use and a public health crisis failed to materialize, Portugal's drug usage rates compare more favorably than many other European states that have kept up a strict "lock 'em up" approach….We seem to have finally reached a tipping point where the costs of the drug war clearly exceed any perceived benefit. Drug addiction is a problem. But just as alcohol prohibition was a mistaken approach to the problem of alcoholism, so too is the drug war a mistaken approach to drug abuse.

Cato 's April study, Drug Decriminalization in Portugal: Lessons for Creating Fair and Successful Drug Polices, explored the highly successful experiment to decriminalize drugs in Portugal. The study has been featured in Time, the Wall Street Journal, the Economist, and other publications.

Cato Quick Hits

• It has been tried before: Why increasing the size of government won't work.

• Senate Judiciary Committee abandons hope of bringing any real change to the Patriot Act. Julian Sanchez in The Nation: "The Obama administration makes vague, reassuring noises about constraining executive power and protecting civil liberties, but then merrily adopts whatever appalling policy George W. Bush put in place."

• Cato v. Heritage on the Patriot Act.

• Video: A heart-breaking story about the failure of the American health care system.

Chris Moody, editor, cmoody@cato.org