We don’t need big-bang health-care re­form

The Washington Times Weekly - - Commentary -

Why do we need Pres­i­dent Obama’s big-bang health­care re­form at all? What’s the real agenda here? If it’s re­ally to cover the truly unin­sured, a much cheaper, tar­geted, small-ball ap­proach would do the trick. But on the other hand, maybe the real goal is a larger, ul­tra-lib­eral plan aimed at a gov­ern­ment takeover of the U.S. health sys­tem.

In a re­cent col­umn, Larry Elder points to an ABC News/USA To­day/Kaiser Fam­ily Foun­da­tion sur­vey that shows 89 per­cent of Amer­i­cans are sat­is­fied with their health care. That means up to 250 mil­lion peo­ple could be happy with their plans. So why is it that we need Mr. Obama’s big-bang health-care over­haul in the first place?

In a new Pew Re­search Cen­ter poll, only 41 per­cent of those sur­veyed be­lieve the U.S. health-care sys­tem needs to be com­pletely re­built. In early 1993, when Mr. and Mrs. Clin­ton started on health-care re­form, 55 per­cent said the sys­tem needs a com­plete over­haul. So some­thing has changed.

In a new CBS/New York Times poll, 38 per­cent says the econ­omy is the most im­por­tant prob­lem fac­ing the coun­try, 19 per­cent says jobs, and only 7 per­cent says health care. In an NBC/Wall Street Jour­nal poll on the same ques­tion, 24 per­cent says the bud­get deficit is to­day’s most wor­ri­some prob­lem, while only 11 per­cent says health care.

There’s more. Ac­cord­ing to the U.S. Cen­sus Bureau, we don’t have 47 mil­lion folks who are truly unin­sured. When you take out col­lege kids plus those earn­ing $75,000 or more who choose not to sign up for a health-care plan, roughly 20 mil­lion peo­ple are re­moved from the list of unin­sured. Af­ter that, you can re­move the 10 mil­lion who are not U.S. cit­i­zens and the 11 mil­lion who are el­i­gi­ble for SCHIP and Med­i­caid but for some rea­son have not signed up for those pro­grams.

So that leaves only 10 mil­lion to 15 mil­lion peo­ple among the long-term unin­sured.

Yes, they need help. And yes, they should get it. But not with manda­tory uni­ver­sal cov­er­age, or new gov­ern­ment-backed in­sur­ance plans, or mas­sive tax in­creases. And cer­tainly not with the Cana­dian-Euro­peanstyle na­tion­al­iza­tion that has al­ways been the true goal of the Obama ad­min­is­tra­tion and con­gres­sional Democrats.

In­stead, we can give the truly unin­sured vouch­ers or debit cards that will al­low for choice and cov­er­age, and even health sav­ings ac­counts for re­tire­ment wealth. Ac­cord­ing to ex­pert Betsy McCaughey, rather than sev­eral tril­lion dol­lars and so­cial­ized medicine, this voucher ap­proach would cost only $25 bil­lion a year — with no so­cial­ized medicine.

Colum­nist Peter Robin­son, writ­ing for Forbes.com, re­lates an in­ter­view with the late freemar­ket No­belist Milton Fried­man about the in­ef­fi­cien­cies of health care. Mr. Fried­man stated sim­ply and clearly that the cost prob­lems in our sys­tem can be traced to the fact that most pay­ments for med­i­cal care are made not by the pa­tients who re­ceive the care, but by third par­ties — typ­i­cally em­ploy­ers or gov­ern­ment.

“No­body spends some­body else’s money as wisely as he spends his own,” said Mr. Fried­man. He also fingered the tax code, which al­lows for an ex­emp­tion from the in­come tax only if health care is em­ployer- pro­vided. This is a free-lunch syn­drome, one that re­moves in­cen­tives for com­pe­ti­tion and cost-con­trol be­cause we’re all play­ing with some­body else‘s money. And in the case of Medi­care and Med­i­caid, care­givers have be­come em­ploy­ees of in­sur­ance com­pa­nies and the gov­ern­ment.

A new gov­ern­ment-backed in­sur­ance sys­tem will in­ten­sify this free-lunch syn­drome. It also will surely lead to a gov­ern­ment takeover of what’s left of our pri­vate-en­ter­prise sys­tem.

But the Demo­cratic agenda has never re­ally been just about the unin­sured, has it? And ac­cord­ing to the Con­gres­sional Bud­get Of­fice, with a price tag of $1.6 tril­lion in new spending, it cer­tainly hasn’t been about real cost-cut­ting or bud­get re­straint. Nor has it been even re­motely about true mar­ket choice and com­pe­ti­tion. Nor has it been about tort/trial-lawyer re­form, which it­self would be a ma­jor cost cap.

And let’s not for­get a spate of new tax-hike pro­pos­als that would sink eco­nomic re­cov­ery: em­ployer ben­e­fit taxes, higher pay­roll taxes, taxes on soft drinks and al­co­hol, a VAT tax or an­other in­come-tax hike for suc­cess­ful earn­ers. And re­mem­ber, ex­ist­ing health-care en­ti­tle­ments are es­ti­mated to be roughly $80 tril­lion in the hole over the decades to come. Wouldn’t it make sense to solve th­ese bank­rupt en­ti­tle­ments be­fore we layer on new ones?

So there is a strong sus­pi­cion that the Demo­cratic agenda has al­ways been a class-war­fare, anti-busi­ness at­tack on pri­vate­sec­tor doc­tors, hos­pi­tals, in­sur­ance firms and drug com­pa­nies. In the name of cost-cut­ting, what’s re­ally go­ing on is a ma­jor knock­down of prof­its. Lib­er­als have al­ways railed against the “ex­cess prof­its” of in­sur­ance firms, drug com­pa­nies and physi­cians.

Knock­ing down prof­its and telling peo­ple what to do be­cause gov­ern­ment plan­ners know best, right? Wrong. Ab­so­lutely wrong.

Lawrence Kud­low is a na­tion­ally syndicated colum­nist.

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