Obamacare Will Be a Budget Buster
Does anyone think that a huge new entitlement program will lead to lower budget deficits? Sounds implausible, yet proponents of government-run healthcare claim this is the case according to the official estimates from the Congressional Budget Office and Joint Committee on Taxation.
To use a technical phrase, this is hogwash. This new 6-1/2 minute video, narrated by yours truly, gives 12 reasons why Obamacare will lead to higher deficits – including real-world evidence showing how Medicare and Medicaid are much more costly than originally projected.
By the way, this video doesn’t even touch on the mandate issue, which Michael Cannon explains is not being counted in order to make the cost of government-run healthcare less shocking.
Filed under: Government and Politics; Health, Welfare & Entitlements; Tax and Budget Policy
Cato Health Care Expert Michael Cannon to Debate Rep. DeLauro (D-CT) Online at 2pm EST Today
Cato director of health policy studies Michael F. Cannon will participate in a live online chat today at the New Haven Register. The event starts at 2pm EST and will last for an hour.
We encourage you to submit questions once the event has started. Rep. Rosa DeLauro (D-CT) will participate in the chat alongside Cannon.
The DNC’s Pure Uninformed Demagoguery
The other day, Sarah Palin cited my work in an oped for the Wall Street Journal. So when the Democratic National Committee savaged her for it, ABCNews.com asked me for comment. Here’s an excerpt from George Stephanopoulos’ blog:
“Instead of poll-driven ’solutions,’ let’s talk about real health-care reform: market-oriented, patient-centered, and result-driven,” wrote Palin. “As the Cato Institute’s Michael Cannon and others have argued, such policies include giving all individuals the same tax benefits received by those who get coverage through their employers; providing Medicare recipients with vouchers that allow them to purchase their own coverage; reforming tort laws to potentially save billions each years in wasteful spending; and changing costly state regulations to allow people to buy insurance across state lines.”
Cannon, the Cato expert referenced by Palin, has not had any direct contact with the former Alaska governor or any of her advisers.
He did, however, come to her defense on the Medicare issue.
‘Vouchers would not make seniors less secure, it would make them more secure,’ Cannon told ABC News. ‘Everyone agrees that Medicare cannot go on spending as much money as it does now. The voucher idea allows individual consumers to make their own decisions about what they need and what they don’t need.’
‘Giving Medicare seniors a voucher is the most rational, the most humane way to contain Medicare spending,’ he added.
Asked about the DNC’s charge that Palin’s proposal would leave seniors with pre-existing conditions vulnerable, Cannon, the director of health policy studies at Cato, called it ‘pure uninformed demagoguery.’
Cannon says that under proposals he has developed, bigger vouchers would be given to people with pre-existing conditions as well as to people with low incomes.
Actually, I think what I said was that DNC communications director Brad Woodhouse was engaging in pure ignorant demagoguery. But whatever.
The DNC is even running an ad claiming that Republicans are trying to “cut” and “kill” Medicare, presumably with vouchers. Never mind that President Obama proposes to “cut” (i.e., slow the growth of) Medicare spending too.
If Republicans were smart — hey, where are you going? — they would be running ads that say:
President Obama wants government bureaucrats to decide whether seniors get health care. Republicans are fighting to control health care costs and preserve seniors’ ability to make their own health care decisions and choose the benefits that they value most. Support Medicare vouchers!
For more on reforming Medicare the right way, click here.
Does the GOP Recognize Socialized Medicine When They See It?
Rumor has it that Republicans in the House and Senate will soon decide whether their alternative to the Democrats’ health care reforms will include an “individual mandate” — a legal requirement that all Americans obtain health insurance.
A recent Consensus Group statement shows that the entire free-market health policy community — including scholars from the Heritage Foundation — opposes such a move.
The Cato Institute has published one study arguing against an individual mandate in itself, and two studies critical of its use in Massachusetts. Cato will soon publish additional studies showing how an individual mandate has — as predicted — led to exploding costs and government rationing efforts in Massachusetts, and arguing against its use at the federal level.
Worse, as I explain in this study, an individual mandate is in fact a large leap toward socialized medicine — regardless of the fact that health insurance would remain nominally “private.” Republicans may oppose creating a new government health insurance program. Yet if they are willing to force Americans to purchase insurance, they will effectively nationalize the health insurance industry.
Finally, as I explain in this op-ed, an individual mandate is always accompanied by taxpayer subsidies to people who may (or may not) need aid to comply. The more people who rely on government aid for their health care, the harder life will become for the party of tax cuts. Bill Clinton showed that the best way to defeat tax cuts is to paint them as a threat to YOUR health care. Just in case doing the right thing isn’t reason enough to reject this horrid idea, Republicans should know that by supporting an individual mandate, they will be slitting their own throats.
All for an idea that doesn’t even command support from a majority of the public.
Health Policy Death Match: Klein vs. Ponnuru
I count both Ramesh Ponnuru and Ezra Klein as friends. (I’m so post-partisan.) Why, oh why must they force me to choose between them??
Ponnuru had an op-ed in yesterday’s New York Times where he reaffirmed his membership in the Anti-Universal Coverage Club. Klein responded in a way that’s sure to satisfy his base, but I think he left the reality-based community wanting. Are you ready for the fisk?
Klein suggests that if “80+ percent of Americans . . . think the system needs fundamental changes or a complete rebuild,” then 80+ percent of Americans must support universal coverage. Hmmm, bit of a stretch. In fact, I can recall one poll where nearly one-third of likely Democratic primary voters rejected universal coverage.
Klein suggests that giving consumers the freedom to avoid unwanted state health insurance regulations would mean that Arizonans wouldn’t get coverage for colorectal cancer screening, and that there would be no mammogram coverage in Idaho. Mmm, that’s good crazy. I refer my right honorable friend to the episode where The New Republic’s Jonathan Cohn made a similar claim about mandates for prostate and cervical cancer screening. I looked up the services covered by the plans made available to the Cohn family by the University of Michigan. It turned out that six out of the seven available plans cover both prostate and cervical cancer screening — even though Michigan requires insurers to cover neither. (I offered to wager Cohn a fancy dinner that his family has coverage for both, but I never heard back from him. Foolish, really, to let me know where he gets his insurance. Klein would never give me such an opening . . . or would he?) What Ponnuru proposes is to let Arizonans and Idahoans and everyone else choose what their health plan covers. Imagine that: people rationing medical care according to their preferences, rather than the preferences of employers, interest groups, bureaucrats, health policy wonks… Why Klein clings to such regulations despite zero evidence that they actually increase access to the targeted services is beyond me.
Klein criticizes Ponnuru for proposing to replace the current tax preference for job-based coverage with a tax credit available to everyone, much like John McCain proposed during his (latest) presidential campaign. Ponnuru cites a study estimating that tax credits would reduce the number of uninsured by 20 million. Klein counter-cites one study estimating that tax credits would have zero net effect on the number of uninsured, and a second study estimating that those who transition from job-based coverage to the “individual” or “non-group” market would pay an additional $2,000 per year for an identical policy. Klein’s criticisms sound persuasive — provided you know precious little about the topic. For one thing, the two studies Klein cites are actually the same study. Pity, really. Had Klein found a second study to support his position, perhaps it would not have been quite so flawed as the one he did find. Here’s what I wrote back in September about that study’s flaws:
Filed under: Cato Publications; Health, Welfare & Entitlements
Events This Week
Tuesday, March 31, 2009
POLICY FORUM – Can the Market Provide Choice and Secure Health Coverage Even for High-Cost Illnesses?
12:00 PM (Luncheon to Follow)
In a study recently published by the Cato Institute, economist John Cochrane argues that the market can solve a huge piece of the health care puzzle: providing secure, life-long health insurance and a choice of health plans to even the sickest patients. The key, Cochrane explains, is to eliminate government policies that force the healthy to subsidize the sick, such as the tax preference for employer-sponsored coverage and other attempts to impose price controls on health insurance premiums.
Featuring John H. Cochrane, Myron S. Scholes Professor of Finance, University of Chicago Booth School of Business Research Associate, National Bureau of Economic Research; Bradley Herring, Assistant Professor, Johns Hopkins Bloomberg School of Public Health; moderated by Michael F. Cannon, Director of Health Policy Studies, Cato Institute.
Please register to attend this event, or watch free online.
Friday, April 3, 2009
P
OLICY FORUM – Drug Decriminalization in Portugal
12:00 PM (Luncheon to Follow)
In 2001, Portugal began a remarkable policy experiment, decriminalizing all drugs, including cocaine and heroin.
In a new paper for the Cato Institute, attorney and author Glenn Greenwald closely examines the Portugal experiment and concludes that the doomsayers were wrong. There is now a widespread consensus in Portugal that decriminalization has been a success. The debate in Portugal has shifted rather dramatically to minor adjustments in the existing arrangement. There is no real debate about whether drugs should once again be criminalized. Join us for a discussion about Glenn Greenwald’s field research in Portugal and what lessons his findings may hold for drug policies in other countries.
Featuring Glenn Greenwald, Attorney and Best-selling Author; with comments by Peter Reuter, Department of Criminology, University of Maryland; moderated by Tim Lynch, Director, Project on Criminal Justice, Cato Institute.
Please register to attend this event, or watch free online.
The Easy Solution to Rising Health Care Costs
It turns out that solving the health care crisis is easy. There’s never been any reason for the lengthy, divisive, and impassioned debate. Explains the New York Times:
“Really controlling costs requires just stopping spending,” said Stuart H. Altman, a professor of health policy at Brandeis University.
Gees, it’s no problem then. Why didn’t I think of that?
“Fascinating ‘Outside-of-the-Box’ Thinking on Health Insurance Reform”
At Reason Online, Ronald Bailey reviews John Cochrane’s recent Cato Policy Analysis, “Health-Status Insurance: How Markets Can Provide Health Security.”
Writing in advance of last week’s health care summit held by President Obama, Bailey explains:
Summit attendees will break into various working groups that are supposed to engage in “outside-of-the-box” thinking. As it happens, they now have some fascinating “outside-of-the-box” thinking on health insurance reform to draw on. Earlier this month, University of Chicago economist John Cochrane published an intriguing policy analysis for the libertarian Cato Institute that looked at how “health-status insurance” can provide health security for Americans. Cochrane claims that with health-status insurance, free markets can solve the vexing problem of how to insure people with pre-existing medical conditions and “provide life-long, portable health security, while enhancing consumer choice and competition.”…
Creating and selling separate health-status insurance policies would mean that medical insurance companies would no longer have an incentive to offload sick people. Instead, because those with pre-existing conditions would have the funds to pay higher premiums, insurers would compete for their business. “Constant competition for every consumer will have the same dramatic effects on cost, quality, and innovation in health care as it does in every other industry,” argues Cochrane.
Health-status insurance also helps delink medical insurance from employment because…a worker diagnosed with diabetes…can switch jobs without worrying about whether or not he can obtain medical insurance…
While Cochrane acknowledges that his proposal is not a comprehensive health care reform program, adopting it would go a long way toward satisfying President Obama’s eight health care reform principles, especially affordability, aiming toward universality, portability, and choice, and being fiscally sustainable. “Health-status insurance can simultaneously give us complete and portable long-term insurance, great individual choice, and cost-containment beyond the dreams of any health policy planner,” concludes Cochrane. Asked if he has been invited to the president’s health care reform summit this week, Cochrane said no, but quickly added, “If I got the phone call, I would definitely be there.” Mr. President, there’s still time for your summiteers to hear about this outside-of-the-box thinking.
Filed under: Cato Publications; General; Health, Welfare & Entitlements
A Ditch, Not a Summit
When President Obama opened today’s summit on health care reform at the White House, he said:
In this effort, every voice has to be heard. Every idea must be considered.
Of course, he spoke those words to a room that contained not a single advocate of free-market health care reform.
- No one from the American Enterprise Institute (ranked the #5 think tank in the world for health policy)
- No one from the Cato Institute (ranked #7)
- No one from the National Center for Policy Analysis (ranked #10)
- No one from the Manhattan Institute
- No one from the Pacific Research Institute
- No one from the Galen Institute
- No one from the Heritage Foundation
- The list goes on…
Obama did, however, invite people from left-wing think tanks, including avowed advocates of socialized medicine. That makes Obama’s pledge of openness a farce, and today’s event a charade.
Or as my colleague Wayne Crews puts it: it’s a ditch, not a summit.
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