State ‘Opt-Out’ Proposal: a Ruse within a Ruse

Posted by Michael F. Cannon

President Obama and his congressional allies want to create yet another government-run health insurance program (call it Fannie Med) to cover yet another segment of the American public (the non-elderly non-poor).

The whole idea that Fannie Med would be an “option” is a ruse.

Like the three “public options” we’ve already got – Medicare, Medicaid, and the State Children’s Health Insurance Program – Fannie Med would drag down the quality of care for publicly and privately insured patients alike.  Yet despite offering an inferior product, Fannie Med would still drive private insurers out of business because it would exploit implicit and explicit government subsidies.  Pretty soon, Fannie Med will be the only game in town – just ask its architect, Jacob Hacker.

Now the question before us is, “Should we allow states to opt out of Fannie Med?”  It seems a good idea: if Fannie Med turns out to be a nightmare, states could avoid it.

But the state opt-out proposal is a ruse within a ruse.

Taxpayers in every state will have to subsidize Fannie Med, either implicitly or explicitly.  What state official will say, “I don’t care if my constituents are subsidizing Fannie Med, I’m not going to let my constituents get their money back”?  State officials are obsessed with maximizing their share of federal dollars.  Voters will crucify officials who opt out.  Fannie Med supporters know that.  They’re counting on it.

A state opt-out provision does not make Fannie Med any more moderate.  It is not a concession.  It is merely the latest entreaty from the Spider to the Fly.

(Cross-posted at National Journal‘s Health Care Experts blog.)

Universal Coverage Means ‘Willing to Let You Die Sooner’

Posted by Michael F. Cannon

I cannot disagree with Uwe Reinhardt’s response to my previous post at National Journal‘s Health Care Experts blog. But his response bears clarification and emphasis.

Improving “population health” generally means “helping people live longer.”

To paraphrase, Reinhardt then writes:

If helping people live longer were our objective in health reform, we could do better than universal coverage. But health reform is not (solely or primarily) about helping people live longer. It is (also or primarily) about other things, like relieving the anxiety of the uninsured.

I applaud Reinhardt for acknowledging a reality that most advocates of universal coverage avoid: that universal coverage is not solely or primarily about improving health.

Will Reinhardt go further and acknowledge that, since universal coverage is largely about some other X-factor(s), that necessarily means that advocates of universal coverage are willing to let some people die sooner in order to serve that X-factor?

(Cross-posted at National Journal‘s Health Care Experts blog.)

Three Irrefutable Facts About the Baucus Bill

Posted by Chris Moody

The Senate Finance Committee votes today on Senator Max Baucus’ version of the health care bill. Cato health care experts have analyzed the bill thoroughly, and point out three vital components to the cost and reach of the legislation:

1) The real cost of the bill is in excess of $2 trillion.

Chairman Max Baucus hoodwinked the CBO with a number of clever budgetary gimmicks, most notably by keeping about half of the cost off the federal books. The bill also assumes Congress will make cuts to Medicare payments, which has never once happened before.

2) The bill contains an enormous middle-class tax hike.

The bill imposes a 40 percent excise tax on health insurance plans that offer benefits in excess of $8,000 for an individual plan and $21,000 for a family plan. Insurers would almost certainly pass this tax on to consumers via higher premiums. As inflation pushes insurance premiums higher in coming years, more and more middle-class families will find themselves caught up in the tax — providing the government with more revenue.

3) The bill creates a national ID program.

The bill contains a paragraph explicitly addressing “eligibility verification.” You must prove who you are to federal entitlement agencies in order to qualify for the bill’s “state exchanges” and tax credits. No ID, no benefits.