In the Daily Caller, I explain how the failure of ObamaCare‘s “CLASS Act” highlights the fatal flaws in the rest of the law:

As it turns out, CLASS collapsed even before its 2012 start date. The same thing happened when Obamacare imposed the same sort of price controls on health insurance for children in September 2010: the markets for child-only coverage collapsed in a total of 17 states, and are slowly collapsing in even more…

In the face of this setback, Obamacare supporters are naturally declaring victory. Jonathan Cohn of The New Republic sees “vindication.” Kevin Drum of Mother Jones proudly announces, “What happened here is that government worked exactly the way it ought to.” The Washington Post’s Ezra Klein instructs, “The CLASS experience should, if anything, make us more confident in the underlying law.” It’s hard to argue with such logic, but let’s try…

Obamacare inspires confidence in its supporters, then, because one part of the law throws a Hail Mary pass to prevent another part of the law from stripping Americans of the insurance that currently protects them from illness and impoverishment. Feel safer?

So if you’d like secure protection from illness and impoverishment, repeal ObamaCare. Or say your prayers.

The CLASS Act: This Is Confidence-Inspiring? is a post from Cato @ Liberty - Cato Institute Blog

This new video, based in large part on the good work of Michael Cannon, explains why Medicaid should be shifted to the states. As I note in the title of this post, it’s good federalism policy and good fiscal policy. But the video also explains that Medicaid reform is good health policy since it creates an opportunity to deal with the third-party payer problem.

One of the key observations of the video is that Medicaid block grants would replicate the success of welfare reform. Getting rid of the federal welfare entitlement in the 1990s and shifting the program to the states was a very successful policy, saving billions of dollars for taxpayers and significantly reducing poverty. There is every reason to think ending the Medicaid entitlement will have similar positive results.

Medicaid block grants were included in Congressman Ryan’s budget, so this reform is definitely part of the current fiscal debate. Unfortunately, the Senate apparently is not going to produce any budget, and the White House also has expressed opposition. On the left, reducing dependency is sometimes seen as a bad thing, even though poor people are the biggest victims of big government.

It’s wroth noting that Medicaid reform and Medicare reform often are lumped together, but they are separate policies. Instead of block grants, Medicare reform is based on something akin to vouchers, sort of like the health system available for Members of Congress. This video from last month explains the details.

In closing, I suppose it would be worth mentioning that there are two alternatives to Medicaid and Medicare reform. The first alternative is to do nothing and allow America to become another Greece. The second alternative is to impose bureaucratic restrictions on access to health care—what is colloquially known as the death panel approach. Neither option seems terribly attractive compared to the pro-market reforms discussed above.

Block-Granting Medicaid Is a Long-Overdue Way of Restoring Federalism and Promoting Good Fiscal Policy is a post from Cato @ Liberty - Cato Institute Blog

Yesterday, the U.S. Department of Health and Human Services issued regulations implementing ObamaCare‘s rule mandating that health insurers maintain minimum “medical loss ratios.”

Opponents of private health insurance have made a fetish of  MLRs – a statistic that insurers developed to show investors the share of premiums they spend on claims.  (“See? They call it a ‘loss’ when they pay for medical care — that proves they’re evil!”)  So the opponents of private health insurance who crafted ObamaCare included a rule requiring carriers to spend at least 80 percent of premium revenue (large employers must spend 85 percent) on “your health care.”  What could possibly go wrong?

The folly and false compassion of ObamaCare are on full display in the MLR regs, where government bureaucrats have evidently determined that unnecessary and harmful medical services, and even insurance fraud, are in fact good for patients. Okay, HHS bureaucrats don’t actually think that. But ObamaCare’s MLR regs include fraud prevention and utilization review among the administrative expenses on which carriers may spend no more than 20 percent of revenue (15 percent for large employers). That will effectively discourage insurers from policing fraud and conducting utilization reviews that protect patients from the expense and risks of unnecessary medical tests and procedures.

ObamaCare’s fatal conceit is that government bureaucrats can determine and deliver what is good for patients. Consumers will continue to feel the pain – costs will continue to rise and more insurers will flee the marketplace – until Congress gives up that conceit and repeals this law.

ObamaCare’s ‘Medical Loss Ratio’ Regs Encourage Fraud, Unnecessary Medical Services is a post from Cato @ Liberty - Cato Institute Blog

As I blogged earlier, yesterday the Kaiser Family Foundation and the Health Research & Educational Trust released their survey of employer-sponsored health benefits in 2010.

For most of this survey’s history, it included a very useful graph of the average growth rate of employer-sponsored insurance premiums.  Here’s the graph from their 2007 survey:

(The grey and light-green lines represent year-to-year growth in overall inflation and wages, respectively.)

Unfortunately, 2007 was the last year that KFF/HRET included that graph in their annual survey.  Had they included that graph this year, it would have shown an even more heartening moderation of premium growth:

A lot of things can drive premium growth.  I discussed a couple of them in my last post.  Some factors that could cause premium growth to moderate might not be all that welcome; if insurers dumped all their sick enrollees, for example.  But absent dramatic evidence of that, isn’t this good news?  And isn’t good news worth highlighting?

KFF/HRET Survey Part II: Isn’t This Good News, Too? is a post from Cato @ Liberty - Cato Institute Blog

Somebody sent me this story from the Drudge Report and I can’t resist the temptation to share. What really astounds me is not that a Swedish man sewed up his own leg after waiting for a long time in a hospital. Heck, I wouldn’t be surprised if things like that happened in all nations. The really disturbing part of the story is that the hospital then reported the man to the police. A classic case of “blaming the victim.” The bureaucrats in Sweden’s government-run healthcare system obviously were not pleased that he called attention to their failure.

A 32-year-old took the needle into his hands when he tired of the wait at Sundsvall hospital in northern Sweden and sewed up the cut in his leg himself. The man was later reported to the police for his impromptu handiwork. “It took such a long time,” the man told the local Sundsvall Tidning daily. The man incurred the deep cut when he sliced his leg on the sharp edge of a kitchen stove while he was renovating at home. “I first went to the health clinic, but it was closed. So I rang the medical help line and they told me that it shouldn’t be closed, so I went to emergency and sat there,” the man named only as Jonas told the newspaper. After an hour-long wait in a treatment room, he lost patience and proceeded to sew up his own wound. “They had set out a needle and thread and so I decided to take the matter into my hands,” he said. But hospital staff were not as impressed by his initiative and have reported the man on suspicion of arbitrary conduct for having used hospital equipment without authorization.

Great Moments in Government-Run Healthcare is a post from Cato @ Liberty - Cato Institute Blog

From The Los Angeles Times:

RICHMOND, Va. (AP) — Virginia’s lawsuit challenging the Obama administration’s health care reform law has cleared its first legal hurdle.

U.S. District Judge Henry Hudson on Monday denied the Justice Department’s request to dismiss the lawsuit.

Virginia Attorney General Ken Cuccinelli claims that Congress does not have the authority under the Constitution’s Commerce Clause to require citizens to buy health insurance or pay a penalty.

The Virginia General Assembly passed legislation this year exempting state residents from the coverage mandate.

More than a dozen other state attorneys general have filed a separate lawsuit in Florida challenging the federal law, but Virginia’s lawsuit is the first to go before a judge.

Federal Judge Denies Obama Administration’s Motion to Dismiss Virginia’s ObamaCare Lawsuit is a post from Cato @ Liberty - Cato Institute Blog

FactCheck.org says that in an ad purchased with your tax dollars, actor Andy Griffith (a.k.a., the sheriff of Mayberry and Matlock) used a “weasel word” to mislead Medicare enrollees about how ObamaCare will affect them:

Griffith tells his fellow senior citizens, “like always, we’ll have our guaranteed [Medicare] benefits.” But the truth is that the new law is guaranteed to result in benefit cuts for one class of Medicare beneficiaries — those in private Medicare Advantage plans…

[T]he term “guaranteed” is a weasel word — a qualifier that sucks the meaning out of a phrase in the way that weasels supposedly suck the contents out of an egg. It may sound to the casual listener as though this ad is saying that the benefits of all Medicare recipients are guaranteed to stay the same — and that may well be the way the ad’s sponsors wish listeners to hear it. But what the administration is really saying is that only those benefits that are guaranteed in law will remain the same.

FactCheck.org neglects to mention that ObamaCare will weaken the guarantee behind those “guaranteed” benefits, too.  Medicare’s chief actuary Richard Foster notes that ObamaCare ratchets down Medicare’s price controls, which will “possibly jeopardiz[e] access to care for beneficiaries.”  That’s not to say that the old price-control scheme is any better than the new one.  It just means that the Obama administration is being even less honest and more weaselly than FactCheck.org says.

And they’re dragging Matlock down with them.

Matlock’s Medicare Pitch Ruled Out of Order is a post from Cato @ Liberty - Cato Institute Blog

Free markets are characterized by voluntary exchange between buyers and sellers. Mapping that relationship is absurdly simply, as this image indicates.

Indeed, the only reason I even bothered to include that image was for purposes of comparison. Here is a new flowchart prepared for the Joint Economic Committee showing the healthcare system under Obamacare.

It’s worth noting, by the way, that the system already was a disaster even before Obamacare was enacted. In the health care sector, free markets are only allowed to operate in very rare cases, such as cosmetic surgery, laser eye surgery, and (for better or worse) abortion. The rest of the sector was heavily distorted by government intervention. Obamacare simply makes a bad situation worse.

Obamacare Complexity vs Free Market Simplicity is a post from Cato @ Liberty - Cato Institute Blog

I just came across this letter to the editor of the Wall Street Journal from MIT economist Jonathan Gruber.  I don’t know how to confine myself to just one of the letter’s many problems. So brace yourselves, here comes the fisk.

Joseph Rago’s article on Massachusetts health-care reform (“The Massachusetts Health-Care ‘Train Wreck‘,” op-ed, July 7) is exactly the type of selectively misleading use of facts upon which opponents of health-care reform have been relying over the past year.

No comment, other than remember the phrase “selectively misleading use of facts.”

Health-care reform in Massachusetts has covered 60% of the state’s uninsured, has done so at roughly the cost projected before reform was enacted in 2006, and remains overwhelmingly popular with the residents of the state.

Regarding coverage gains, Massachusetts officials used to claim that RomneyCare reduced the share of uninsured residents from around 10 percent to 2.6 percent.  In a study released this year, Aaron Yelowitz (a former student and coauthor of Gruber’s) and I show why that figure is too low and why the actual figure is likely 5.1 percent or higher.  The study on which Gruber relies — like all other such studies — neither mentions nor attempts to measure the problem that Yelowitz and I identified: uninsured Massachusetts residents appear to be responding to the individual mandate by concealing their lack of insurance, which would inflate the coverage gains.  Since that study obtained results similar to our results for Massachusetts adults, that study’s estimate of a 60-percent reduction in the uninsured appears to be an upper-bound estimate, rather than a point estimate.

Regarding costs, I haven’t seen any updated numbers since the Massachusetts Taxpayers Foundation’s whitewash from May 2009.  I’d like to see an updated, non-whitewashed report on actual spending and how it compares to the original projections, especially considering that in 2006, the Kaiser Family Foundation reported that Massachusetts “anticipates that no additional funding will be needed beyond three years.“  Updated figures would also allow us to judge how much RomneyCare spent per newly insured resident.

The state has seen a decline in its nongroup premiums of more than 50% relative to national trends…It reduced the costs to individuals of purchasing insurance…[an] enormous reduction relative to pre-reform…

Here’s where Gruber engages in his own “selectively misleading use of facts.”  Yes, non-group premiums appear to have fallen for the 4 percent of residents in the non-group market — because RomneyCare shifted those costs to workers with job-based coverage.

It is true that reform has not slowed the growth of group health-insurance premiums, which have continued to rise at exactly the same rate as in the nation as a whole.

The first part of this sentence is an understatement; the second part is false.  This report from the left-wing Commonwealth Fund shows that premiums in Massachusetts are growing faster than anywhere else in the nation.  And the only study that has tried to isolate the effect of RomneyCare finds that it increased premiums for employment-based coverage by 6 percent (see cost-shifting, above).

Despite Gov. Mitt Romney’s claims, the Massachusetts reform was not designed to slow the growth of health-care cost growth.

It should be obvious by now that RomneyCare wasn’t designed that way.  But it sure was sold that way.  And so was ObamaCare.  Any bets on how long before we hear apologists for both claiming that ObamaCare wasn’t designed to slow cost growth?

The PPACA also includes a series of changes that represent the best thinking about how to control costs, such as an independent rate-setting board for Medicare, pilots of innovative medical reimbursement approaches, and an end to the open-ended tax subsidy to the highest cost health insurance plans in the U.S. None of these is guaranteed to slow the rate of cost growth. But each is better than doing nothing, which was the alternative.

So the, ahem, best thinking on how to contain health care costs is (1) price and exchange controls set by (2) an unelected and unaccountable rationing board, plus (3) taxing health insurance.  Bra-vo. Sure, Obama’s National Economic Council chairman Larry Summers says, “Price and exchange controls inevitably create harmful economic distortions. Both the distortions and the economic damage get worse with time.” But when the alternative is nothing — nothing! — that means the bar for “best thinking” isn’t very high.

In the end, it is impossible to control health-care costs without first bringing as many citizens as possible into our health-insurance system.

As I blogged earlier today, it does not speak well of the Left’s approach to health care that in order to reduce wasteful government spending — or at least pretend to — they must first create more wasteful government spending.

A Response to Gruber on RomneyCare & Health Care Costs is a post from Cato @ Liberty - Cato Institute Blog

A major problem with America’s health care system, both before and after Obamacare, is the fact that consumers very rarely spend their own money when obtaining health care. Known as third-party payer, this problem exists in part because government directly finances almost 50 percent of health care expenditures. But even a majority of supposedly private health care spending is financed by employer-provided policies that are heavily distorted by a preference in the tax code that encourages insurance payments even for routine expenses. According to government data, only 12 percent of health care costs are financed directly by consumers. And since consumers almost always are buying health care with somebody else’s money, it should come as no surprise that this system results in rising costs and inefficiency. This is why repealing Obamacare is just the first step that is needed if policymakers genuinely want to restore a free market health care system (all of which is explained in this 4-minute video).

Unfortunately, many people think that market forces don’t work in the health care system and that costs will always rise faster than prices for other goods and services. There are a few examples showing that this is not true, and proponents of liberalization usually cite cosmetic surgery and laser-eye surgery as examples of treatments that generally are financed by out-of-pocket payments. Not surprisingly, prices for these treatments have been quite stable — particularly when increases in quality are added to the equation.

I just ran across another example, and this one could be important since it may resonate with those who normally are very suspicious of free markets. As the chart from the Alan Guttmacher Institute shows, the price of an abortion has been remarkably stable over the past 20-plus years. Let’s connect the dots to make everything clear. Abortions generally are financed by out-of-pocket payments. People therefore have an incentive to shop carefully and get good value since they are spending their own money. And because market forces are allowed, the cost of abortions is stable. The logical conclusion to draw from this, of course, is that allowing market forces for other medical services will generate the same positive results in terms of cost and efficiency.

None of this analysis, by the way, implies that abortion is good or bad, or that it should be legal or illegal. The only lesson to be learned is that market forces control costs and promote efficiency and that more government spending and intervention exacerbate the third-party payer crisis.

Abortion, Third-Party Payer, and the Cost of Health Care is a post from Cato @ Liberty - Cato Institute Blog

Eline van den Broek probably is not happy today since she was in South Africa watching her team lose a high-scoring (by soccer standards) battle with Spain, but she should be very proud of the new video she narrated that urges the repeal of Obamacare — and also points out some of the other reforms that are needed to restore a free market to the US health care system.

Her comments on how the American health care system was a mess even before Obamacare are particularly important and echo many of the points made by Mike Tanner and Michael Cannon.

Restore Free Markets to Health Care is a post from Cato @ Liberty - Cato Institute Blog

An Obama administration “fact sheet,” released alongside the interim final rules for several of ObamaCare’s cost-increasing mandates, claims those mandates will reduce the “hidden tax” imposed by uncompensated care:

By making sure insurance covers people who are most at risk, there will be less uncompensated care and the amount of cost shifting among those who have coverage today will be reduced by up to $1 billion in 2013.

According to research by the Urban Institute, that “hidden tax” isn’t very large:

Private insurance premiums are at most 1.7 percent higher because of the shifting of the costs of the uninsured to private insurers in the form of higher charges.

As the Congressional Budget Office repeatedly lectures Congress, “Uncompensated care is less significant than many people assume.”

Likewise, these mandates’ effect on uncompensated care will be less significant than the Obama administration would like you to think.  Using data from the Centers for Medicare & Medicaid Services and a reasonable assumption of 6-percent annual growth, total private health insurance premiums in 2013 will be in the neighborhood of $1.1 trillion.  So the administration is boasting that these mandates will reduce the 1.7-percent “hidden tax” imposed by uncompensated care to 1.61 percent.

Indeed, the whole of ObamaCare may not do much to reduce the “hidden tax” of uncompensated care. After Massachusetts enacted a nearly identical law, the Urban Institute reports, “high levels of emergency department (ED) use have persisted in Massachusetts. Specifically, ED use was high in Massachusetts prior to health reform and has stayed high under health reform.”  A lot of uncompensated care comes in through the ED.

Finally, notice how a 1.7-percentage-point premium surcharge is a bad thing if President Obama is ostensibly rescuing you from it, but a good thing if he’s imposing it on you.

ObamaCare Regs’ Effect on Uncompensated Care Overblown is a post from Cato @ Liberty - Cato Institute Blog

House Judiciary Committee Chairman John Conyers (D-MI) was asked on Friday where in the Constitution Congress gets the power to force people to buy health insurance.  He said, “Under several clauses, the good and welfare clause and a couple others.”

As it happens, there is no “good and welfare clause” — which Conyers should know, as both judiciary chairman and a lawyer.  But even if you excuse his casual use of constitutional language, what he probably means — the General Welfare Clause of Article I, Section 8 — is not a better answer.  What that clause does is limit Congress’s use of the powers enumerated elsewhere in that section to legislation that promotes ”the general welfare.”  (So earmarks are arguably unconstitutional, though you can make a colorable argument that, when considering a pork bill as a whole, with all parts of the country getting something, that monstrosity is collectively in “the general welfare” — maybe.)  In any event, the General Welfare Clause doesn’t give Congress any additional powers — and I’d be curious to know what the other “several clauses” are.

Conyers  also noted that, “All the scholars, the constitutional scholars that I know . . . they all say that there’s nothing unconstitutional in this bill and if there were, I would have tried to correct it if I thought there were.”  Well, Mr. Conyers, to start let me introduce you to three constitutional scholars — not fringe right-wing kooks or anything like that, but respected people who publish widely — who think Obamacare is unconstitutional.  Now will you try to “correct” the bill?

Here’s video of Conyers’s full remarks on the subject (h/t Jon Blanks):

And for a survey of the various constitutional issues attending Obamacare, see Randy Barnett’s oped from Sunday’s Washington Post.

Individual Mandate Is Constitutional – If You Rewrite the Constitution is a post from Cato @ Liberty - Cato Institute Blog

Washington is buzzing with news that the Congressional Budget Office has a new cost estimate for the President’s proposal to further expand the federal government’s control over the health care system. The White House is doubtlessly pleased because the takeaway message, as blindly regurgitated by the Associated Press, is that a giant new entitlement program is going to “drive down red ink:”

The Congressional Budget Office estimated the legislation would reduce the federal deficit by $138 billion over its first 10 years, and continue to drive down the red ink thereafter. Democratic leaders said the deficit would be cut $1.2 trillion in the second decade – and Obama called it the biggest reduction since the 1990s, when President Bill Clinton put the federal budget on a path to surplus.

Michael Cannon already has explained that the cost estimate is fraudulent because of what it leaves out, so let me explain why it is fraudulent because of what it includes. The CBO has a very dismal track record of getting the numbers wrong, in part because there is no attempt to measure how a bigger burden of government has negative macroeconomic effects, but also because the number crunchers do a poor job of measuring the degree to which people (recipients, health care providers, state and local politicians, etc.) will modify their behavior to become eligible for other people’s money. The problem is compounded by similar mistakes for revenue estimates from the Joint Committee on Taxation, which (like CBO) makes no attempt to capture macroeconomic effects and has a less-than-stellar history of predicting behavioral responses.

If the legislation passes, we will get more spending, more taxes, and more debt. Equally troubling, we will get more dependency. That’s good for Washington and bad for the country.

Lies, Damned Lies, and CBO Estimates is a post from Cato @ Liberty - Cato Institute Blog

Writing for Forbes, Bruce Bartlett puts forth an interesting hypothesis that healthcare legislation could have been made better (hopefully he meant to write “less destructive”) if the GOP had been willing to compromise with Democrats:

Democrats desperately wanted a bipartisan bill and would have given a lot to get a few Republicans on board. This undoubtedly would have led to enactment of a better health bill than the one we are likely to get. But Republicans never put forward an alternative health proposal. Instead, they took the position that our current health system is perfect just as it is.

Bruce makes several compelling points in the article, especially when he notes that it will be virtually impossible to repeal a bad bill after 2010 or 2012, but there are good reasons to disagree with his analysis. First, he is wrong in stating that Republicans were united against any compromise. Several GOP senators spent months trying to negotiate something less objectionable, but those discussions were futile. Also, I’m not sure it’s correct to assert Republicans took a “the current system is perfect” position. They may not have offered a full alternative (they did have a few good reforms such as allowing the purchase of insurance across state lines), but their main message was that the Democrats were going to make the current system worse. Strikes me as a perfectly reasonable position, one that I imagine Bruce shares.

Let’s explore Bruce’s core hypothesis: Would compromise have generated a better bill? It’s possible, to be sure, but there are also several reasons why that approach may have backfired:

1. It’s not clear a policy of compromise would have produced a less-objectionable bill. Would Senate Democrats have made more concessions to Grassley and Snowe rather than Lieberman and Nelson (much less whether the “concessions” would have been good policy)? And even if Reid made some significant (and positive) concessions, is there any reason to think those reforms would have survived a conference committee with the House? Yet the compromising Republicans probably would have felt invested in the process and obliged to support the final bill — even if the conference committee produced something worse than the original Senate Democrat proposal.

2. A take-no-prisoners strategy may be high risk, but it can produce high rewards. In the early 1990s, the Republicans took a no-compromise position when fighting Bill Clinton’s health plan (aka, Hillarycare), and that strategy was ultimately successful. We still don’t know the final result of this battle (much less how events would have transpired with a different strategy), but if the long-term goal is to minimize government expansion, a no-compromise approach is perfectly reasonable.

3. A principled opposition to government-run healthcare will help win other fights. The Democrats ultimately may win the healthcare battle, but the leadership will have been forced to spend lots of time and energy, and also use up lots of political chits. Does anyone now think they can pass a “climate change” bill? The answer, almost certainly, is no.

4. A principled approach can be good politics, which can eventually lead to good policy. Democrats wanted a few Republicans on board in part to help give them political cover. The aura of bipartisanship would have given Democrats a good talking point for the 2010 elections (“My opponent is being unreasonable since even X Republicans also supported the legislation”). That fig leaf does not exist now, which makes it more likely that Democrats will pay a heavy price during the midterm elections. It is impossible to know whether 2010 will be a 1994-style rout or whether the newly-elected Republicans will quickly morph into Bush-style big-government conservatives (who often do more damage to liberty than Democrats), but at least there is a reasonable likelihood of more pro-liberty lawmakers.

When all is said and done, Bruce’s strategy is not necessarily wrong, but it does guarantee defeat. Government gets bigger and freedom diminishes. For reasons of principle and practicality, Republicans should do the right thing.

Should Republicans Have Compromised to Produce a Less-Bad Healthcare Bill? is a post from Cato @ Liberty - Cato Institute Blog

If — and it is still a big “if — Democrats pass a health bill, that bill will owe as much to former Massachusetts governor Mitt Romney as to Nancy Pelosi and Harry Reid. In fact, with the so-called “public option” out of the Senate health bill, the final product increasingly looks like the failed Massachusetts experiment.  Consider that the final bill will likely include:

• An individual mandate
• A weak employer-mandate
• An Exchange (Connector)
• Middle-class subsidies
• Insurance regulation (already in place in Massachusetts before Romney’s reforms)

As to why this will be a disaster for American taxpayers, workers, and patients, I’ve written about it here, and my colleague Michael Cannon has covered it here and here.

Gee, thanks, Mitt.

Health Reform: Blame Mitt is a post from Cato @ Liberty - Cato Institute Blog

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.

Obamacare Will Be a Budget Buster is a post from Cato @ Liberty - Cato Institute Blog

At his White House forum on health reform back in March, President Barack Obama offered:

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.

In a new Cato study titled, “Yes, Mr. President, a Free Market Can Fix Health Care,” I take up the president’s challenge and explain that markets are indeed the only way to achieve those goals.  I also explain how Congress can remove the impediments that currently prevent markets from doing so:

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.

Unlike the president’s health care proposals (which, as Victor Fuchs explains, would merely shift costs), these reforms would reduce costs, expand coverage, and improve health care quality – without new taxes, government subsidies, or deficit spending.

Would a free market be nirvana?  Of course not.  But fewer Americans would fall through the cracks than under the status quo or the government takeover advancing through Congress.

There is a better way.

(Cross-posted at Politico‘s Health Care Arena.)

Yes, Mr. President, a Free Market Can Fix Health Care is a post from Cato @ Liberty - Cato Institute Blog

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.)

Universal Coverage Means ‘Willing to Let You Die Sooner’ is a post from Cato @ Liberty - Cato Institute Blog

Just days after the health-insurance lobby released a report criticizing the Senate Finance Committee’s health care overhaul (for not expanding government enough!), Democrats and President Barack Obama lashed out at health insurers, threatening to revoke what the Government Accountability Office calls the insurers’ “very limited exemption from the federal antitrust laws.”

Democrats say they’re motivated by the need to increase competition in health insurance markets.  Right.

According to Business Week:

David Hyman, a professor of law and medicine at the University of Illinois College of Law and adjunct scholar at the Cato Institute…considers it unlikely that repeal would fundamentally change the nature of the market. While it might increase competition in some markets, he says, it could actually decrease it in others, such as those where small insurers survive because they have access to larger providers’ data. Changes to the act could therefore hurt smaller companies more than larger ones, he says.

Because the act doesn’t outlaw the existence of a dominant provider but simply prohibits collusion, says Hyman, a repeal would fall short of breaking up existing market monopolies that are blamed for artificially inflating prices. The current move against [the] McCarran-Ferguson [Act], he says, “has more to do with the politics of pushing back against the insurance industry’s opposition to health reform than it does with increasing competition in health-insurance markets.”

Combined with what The New York Times described as the Obama administration’s “ham-handed” attempt to censor insurers who communicated with seniors about the effects of the president’s health plan — the Times editorialized: “the government’s Centers for Medicare and Medicaid Services had to stretch facts to the breaking point to make a weak case that the insurers were doing anything improper” — it’s hard to argue that this is anything but Democrats threatening to use the power of the state to punish dissidents.

When Republicans were in power, dissent was the highest form of patriotism.  Now that Democrats are in power, obedience is the highest form of patriotism.

Nice Insurance Company. Shame If Anything Were to Happen to It. is a post from Cato @ Liberty - Cato Institute Blog