Putting Private Insurance Out of Business
Over at Think Progress, Matt Yglesias takes me to task for saying that the so-called public option in the House’s health care bill “would all but eliminate private insurance and force millions of Americans into a government-run system.”
Yglesias apparently still buys into the myth that the public option is, well, an option.
For people who receive health insurance through their employers, which is to say the vast majority of the Americans who currently have health insurance, the House bill would change very little. Or, rather, the biggest change would simply be the confidence that if, in the future, you cease to get health insurance from your employer (maybe you’ll lose your job or want to change jobs) that you’ll still be able to get health care. What’s more, of the minority of Americans who would be getting health care through the new “exchange,” the majority will probably sign up for private health insurance and everyone will have the option of doing so. If the government-run public plan is, for whatever reason, vastly more appealing than the private options then it will dominate. But if you believe the government can’t run health care well, there’s no reason to think that will happen. Whatever you think of that, though, the basic fact is that even if the public option does dominate the exchange most people will still have private employer-provided insurance.
That might be true if the new government-run program were going to compete on anything close to a level playing field. But, because the public option is ultimately supported by the taxpayers, the playing field can never be level. True, the bill does say that the new program is supposed to be self-sustaining, covering administrative and benefit costs entirely out of premium revenues. But remember that Medicare Part B was originally supposed to support 50 percent of its costs through premiums. That has shrunk to the point where premiums pay for less than 25 percent of the program’s cost.
And the government has a myriad of ways to prevent the true cost of the program from showing up in premium prices. For example, the government-run plan will not have to pay state or federal taxes, and unlike private insurance plans, who can be sued in state courts, the government-run plan could only be sued in federal court.
At the very least, the program carries with it an implicit guarantee against future losses. Suppose the public option prices its products too low and loses money. Can you imagine that Congress is simply going to let it go bankrupt, go out of business? Would a Congress that has bailed out banks and automobile companies because they are “too big to fail” resist subsidizing the government’s insurance plan if it began to lose money? Even without the actual bailout, such an implicit guarantee has a value. For example, the implicit guarantees behind Fannie Mae and Freddie Mac were estimated to have saved those institutions $6 billion per year.
All of this means that the government-run plan would be significantly cheaper than private insurance, not because it would out-compete private insurance or because it was more efficient, but because it had unfair advantages. The lower cost means that businesses, in particular, would have every incentive to dump workers from their current health insurance plan into the government plan. And, if other provisions of the bill make insurance more expensive, as is likely, the incentive for employers to shift workers to the government plan would be even greater. Estimates suggest that nearly 90 million workers could eventually be forced into the government plan.
As Robert Samuelson, dean of economic columnists, writes in the Washington Post, “a favored public plan would probably doom today’s private insurance.”
Samuelson is right. There is nothing “optional” about a public option. And that is just the way the Left wants it.
State ‘Opt-Out’ Proposal: a Ruse within a Ruse
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.)
Filed under: Cato Publications; General; Health, Welfare & Entitlements
Yes, Mr. President, a Free Market Can Fix Health Care
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:
- Give Medicare enrollees a voucher (adjusted for their means and health risk) and let them purchase any health plan on the market,
- 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,
- 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,
- Make state-issued clinician licenses portable, which would increase access to care and competition among health plans, and
- 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.)
Filed under: Cato Publications; General; Health, Welfare & Entitlements
Medicare for Everyone?
According to The Hill, House Democrats are considering re-branding their new government-run health insurance program. A “public option” evidently isn’t catchy enough. Now they’re thinking, “Medicare Part E” as in, Medicare for Everyone.
By all means, model a new government program after Medicare, which:
- Drags down the quality of care for all patients, both publicly and privately insured
- Literally kills people by fueling the epidemic of deaths due to medical errors (as many as 100,000 annually)
- Is responsible for the fragmented delivery system about which the Left complains
- Has required one tax increase every four years, still has an unfunded liability approaching $90 trillion, and will therefore be the driving force behind income-tax rates essentially doubling by mid-century
- Has been expanded well beyond its original mission
- Didn’t save a single life in (at least) its first 10 years of operation
- Coerces people to choose it over private insurance
- Restricts enrollees’ freedom to spend their own money on medical care
- Is easily (and persuasively) parodied as a tool of the devil
Pleeeeease don’t throw me into that briar patch.
Filed under: Cato Publications; General; Health, Welfare & Entitlements
Nice Insurance Company. Shame If Anything Were to Happen to It.
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.
Filed under: Cato Publications; General; Government and Politics; Health, Welfare & Entitlements; Law and Civil Liberties
Monday Links
- 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 scholars have long called for drug policy reform, and have examined other drug decriminalization program that have shown tangible, positive results.
- Ignored by the media: Antarctic ice melt lowest ever measured.
- Obama visiting China in November to discuss expanding military agreements. Here’s what’s at stake.
- Video: Why American health care kills.
- Podcast: “Coerced into Medicare“
House Democrats Choose Dishonesty
I’m not a fan of the House Democrats’ proposed takeover of the health care sector. (If there’s one thing that legislation is not, it’s “reform.”) But at least House Democrats were honest enough to include the cost of the $245 billion bump in Medicare physician payments in their legislation, unlike some committee chairmen I could mention.
Unfortunately, House Democrats have since decided that dishonesty is the better strategy. They, like Senate Democrats, now plan to strip that additional Medicare spending out of health “reform” and enact it separately. (Democrats are already trying to exempt that spending from pay-as-you-go rules, making it easier for them to expand our record federal deficits.) Why enact it separately? Because excising that spending from the “reform” legislation reduces the cost of health “reform”!
But why stop there? Heck, enact all the new spending separately, and the cost of “reform” would plummet! Enact the new Medicaid spending separately, and the cost of “reform” would fall by $438 billion! Do it with the subsidies to private health insurance companies, and the cost of “reform” would plunge by $773 billion! All that would be left of “reform” would be tax increases and Medicare payment cuts. Health “reform” would dramatically reduce federal deficits! Huzzah!
Except it wouldn’t, because at the end of the day Congress would be spending the same amount of money.
The only good news may be this. If this dishonest budget gimmick succeeds, then Congress will have “fixed” Medicare’s physician payments. Absent that “must pass” legislation, the Democrats health care takeover would lose momentum, and would have to stand on its own merit. That would be good for the Republic, though not for the legislation.
(Cross-posted at Politico’s Health Care Arena.)
Filed under: Cato Publications; Health, Welfare & Entitlements
Emergency Aid to Seniors? No Way
Social Security benefits are indexed for inflation, but because inflation has been roughly zero for the past year, the adjustment formula implies no increase in benefits this year. Nevertheless,
President Obama on Wednesday attempted to preempt the announcement that Social Security recipients will not get an increase in their benefit checks for the first time in three decades, encouraging Congress to provide a one-time payment of $250 to help seniors and disabled Americans weather the recession.
Obama endorsed the idea, which is expected to cost at least $13 billion, as the administration gropes for ways to sustain an apparent economic rebound without the kind of massive spending package that critics could label a second stimulus act.
This is outrageous on four levels:
1. If the president thinks the economy needs more stimulus, he should say that explicitly and have an honest debate.
2. This is the wrong kind of stimulus. Any further stimulus should consist of reductions in marginal tax rates, such as a cut in the corporate income tax (or better yet, repeal).
3. All Social Security recipients already have a moderate guaranteed income, and many have significant income beyond their Social Security benefits. This kind of transfer has no plausible justification as redistribution for the needy.
4. Sending checks to seniors is a blatant attempt to buy their support for Obamacare, which promises to cut Medicare spending substantially.
C/P Libertarianism, from A to Z
More Health Reform Budget Gimmickry
When the Senate Finance Committee released CBO scoring of its health care reform proposal last week, we warned that its claim of reducing future budget deficits was achieved only through dishonestly assuming that Congress will implement a 21% reduction in Medicare payments that is scheduled under current law. We pointed out that Congress has been supposed to make those reductions since 2003, and never has. Now—surprise, surprise—Democrats have introduced a bill to eliminate the scheduled cut, at a cost of $247 billion. But Democrats cleverly are putting the new spending in a separate bill, so it won’t change scoring of health care reform. Have they no shame?
Three Irrefutable Facts About the Baucus Bill
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.
Frozen Minds on the Medicare Part B Premium Freeze
This week, Sen. Tom Coburn (R-OK) blocked an attempt by Sen. Max Baucus (D-MT) to move — without a recorded vote or CBO score – H.R. 3631, legislation to freeze Medicare Part B premiums. These premiums are automatically deducted from the Social Security checks of seniors, almost all of whom are enrolled in the Medicare Part B (Supplemental Medical Insurance) program.
Social Security recipients will not receive a COLA increase in their monthly checks beginning January 2010 because inflation between October 2008 and September 2009 was negative. But if Part B premiums increase, the dollar amount of their Social Security checks will decrease beginning in January 2010.
What would happen if the Part B premium were frozen for 2010? Seniors would get a double benefit. First they are gaining from a zero reduction in their Social Security checks even though inflation in 2008-2009 was negative. That means the purchasing power of their Social Security checks will be larger (assuming inflation remains low during the 4th quarter of this year).
On top of that, a frozen Part B premium would provide them with more generous Part B coverage because health care prices became more expensive during 2009 relative to other goods and services.
Senator Coburn’s action in blocking the premium freeze is courageous and correct. In a small but important way, it combats the busting of the federal budget by already generous Medicare Part B benefits that seniors receive — three-quarters of which are funded out of federal general revenues (that is, financed out of taxes paid by younger workers).
Baucus Bill Would Cost More than $2 Trillion
Sen. Max Baucus’s (D-MT) health care overhaul would cost more than $2 trillion. It would expand the deficit. But he has carefully and methodically hidden those facts – so well that he has completely hoodwinked nearly all the major media.
The media are reporting that the Baucus bill would reduce the deficit by $81 billion over 10 years. Wrong.
The Baucus bill assumes that Congress will allow the “sustainable growth rate” cuts in Medicare’s physician payments to occur beginning in 2012. Yet Congress has routinely and repeatedly blocked those cuts, making Baucus’s assumption preposterous. The CBO handled the issue delicately, but essentially said, “Sure, provided that the sun rises in the west in 2012, then yes, this bill would reduce the deficit.”
That means Baucus will come up at least $200 billion short on the revenue side, making his bill a budget-buster.
The media are reporting that the Baucus bill would cost just $829 billion over 10 years. Wrong.
As Donald Marron observes, that number omits as much as $75 billion in new federal spending. It also omits a $33 billion unfunded mandate on state governments.
But the worst part is that the Congressional Budget Office’s preliminary cost estimate omits the cost of the private sector mandates in the Baucus bill. In Massachusetts, those costs accounted for 60 percent of the total cost of reform. That suggests the actual cost of the Baucus bill – $829 billion plus $75 billion plus $33 billion, times 2.5 – is well over $2 trillion.
Yet the CBO score pretends those costs aren’t even there. It’s like a mystery novel that’s missing the last 50 pages. And the media aren’t even curious.
In the words of Brad DeLong, why, oh why, can’t we have a better press corps?
Cross-posted at Politico’s Health Care Arena.
Filed under: Cato Publications; General; Health, Welfare & Entitlements
Tuesday Links
- Twenty inaccurate claims in Obama’s speech to Congress on health care. “If [members of Congress] yelled out every time President Obama said something untrue about health care, they would quickly find themselves growing hoarse.”
- Political tensions decreasing between Taiwan and China.
- How Americans misunderstand war: “America’s biggest mistake in Afghanistan and Iraq was to think its modern military would make winning easy.”
- Always read the fine print: There is a dangerous provision in the Senate Finance Committee’s health care bill that could deny crucial health treatments for Medicare patients.
- Will the FDIC start borrowing from healthy banks to continue to provide relief to banks teetering on the edge?
- Podcast: Justin Logan explains why even the best policy toward Iran’s nuclear ambitions may not yield a positive outcome.
Climate Change and Health Care: Free Lunches?
In the debate over health care reform, advocates of expanded government health insurance suggest we can pay for this by making Medicare and Medicaid more efficient.
In Paul Krugman’s most recent column, he makes a similar claim about reducing greenhouse gas emissions:
The evidence suggests that we’re wasting a lot of energy right now. That is, we’re burning large amounts of coal, oil and gas in ways that don’t actually enhance our standard of living — a phenomenon known in the research literature as the “energy-efficiency gap.” The existence of this gap suggests that policies promoting energy conservation could, up to a point, actually make consumers richer.
Both claims of a “free lunch” are heroic, at best.
In the case of health insurance, Medicare and Medicaid are inefficient, but to make them more efficient we have to reduce government subsidy for health insurance, not expand it.
In the case of energy efficiency, more energy-efficient practices exist (e.g., replacing incandescent light bulbs with CFLs), but they are expensive: if they actually made consumers richer, most would be using them already.
Now the fact that expanded government health insurance and increased energy efficiency would cost more, not less, does not prove they are bad ideas (that’s a separate discussion). But it means society must evaluate a tradeoff, not just assert we can have something for nothing.
C/P Libertarianism, from A to Z
Filed under: Energy and Environment; Government and Politics; Health, Welfare & Entitlements
Wednesday Links
- Should more troops be sent to Afghanistan? Cato’s Malou Innocent weighs in alongside the policymakers.
- What does the end of the missile defense system in Central Europe means for U.S.-Russian relations?
- Signals indicate that the market just might be on the rebound. That’s great, but it’s important not to get ahead of ourselves, says Johan Norberg. “We must never forget that the light at the end of the tunnel can be an approaching train.”
- A few thoughts on the new rise of the Taliban in Afghanistan, and what it means for Pakistan and India.
- Michael Cannon continues his debate in the LA Times: The dirty little secret is that “Obama-care” isn’t about reducing health care costs or making coverage more secure. It’s about robbing Peter to pay Paul.
- Podcast: If you’d like to see what Obama wants to do to the U.S. health care system, don’t listen to his rhetoric…look at what he’s doing to Medicare.
20-somethings Will Pay for Big Government
A front-page Washington Post story today notes that the cost of Obama-style health care reform will fall disproportionately on young adults.
Younger workers are typically more healthy than the population at large, and a significant share of them quite rationally choose not to buy health insurance, as my colleague Mike Tanner explains in a recent op-ed. The major health care plans on the table in Washington would force them to buy coverage. As the Post story explains:
Drafting young adults into any health-care reform package is crucial to paying for it. As low-cost additions to insurance pools, young adults would help dilute the expense of covering older, sicker people. Depending on how Congress requires insurers to price their policies, this group could even wind up paying disproportionately hefty premiums—effectively subsidizing coverage for their parents.
I’m beginning to see a pattern. Those same young workers will be forced to pay the bills for soaring Social Security and Medicare expenditures when the Baby Boomers begin retiring en masse a decade from now. And of course, they will be the ones paying off the $9 trillion in additional federal debt expected to be wracked up from the current explosion in federal spending.
I always thought parents were supposed to support their kids, not saddle them with bigger bills and huge debts.
Filed under: General; Health, Welfare & Entitlements
Govt Bureaucrats Already Interfere in Medical Decisions
Among the many whoppers President Obama packed into his recent address to Congress, he declared that once he creates “a publicly-sponsored insurance option, administered by the government just like Medicaid or Medicare…I will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the care that you need.”
Just like Medicaid and Medicare? Medicaid and Medicare don’t get in between patients and the care that they need? Really??
That was too much for a correspondent of mine, a government bureaucrat who oversees other government bureaucrats who come in between patients and the care that they need. He writes:
I am government bureaucrat…and I just happen to be reviewing cases, albeit involving Medicare and Medicaid, where the government has inserted itself between the patient and the care prescribed by the physician.
Some time ago the Center for Medicare and Medicaid Services contracted with a consulting firm…to audit Medicare and Medicaid providers. Pursuant to this contract, [the firm] audited certain hospital records. In the cases I am reviewing, [the firm] would perform a computer analysis looking for situations where a hospital admitted a patient only to discharge the patient the next day. (This is just one of the many things they audited for; e.g., the use of intense care rehabilitation in joint replacement cases).
[The firm] then reviewed the hospital’s justification for the admission and, when [it] “determined” that the admission was not appropriate, the hospital would be required to repay the money it had already been paid – the audit dated back to 2003. The cases proceed through a reconsideration process and if it’s still determined that the hospital admission was improper, the case ends up on my desk for adjudication.
I happen to have six of those cases now, from three different hospitals. In all six cases the patients had significant chronic health problems and all were having acute episodes at the time of admission. Of the six, five were senior citizens, and one was having problems with a pregnancy. In each case a “panel of experts” determined that, based on the medical evidence, the hospital’s admitting doctor was unjustified.
Setting aside the medical issues, which in each case were significant, you and I both know that a large factor in the admitting doctor’s decision is the potential liability for the hospital. I am sure in each case the doctor considered just what would happen if he sent the patient home they died. Even if liability would not ultimately attach to the hospital, the cost of fighting such a lawsuit would be considerable. Of course, the so-called panel of experts does not have to worry about medical malpractice, so that issue does not figure into their consideration.
It is extremely rare for the patient to be held financially liable in such cases. So, one could argue that they got the treatment they needed and didn’t even have to pay for it. But, how long will it be before hospitals become so “gun-shy” that they refuse to admit patients for care, fearing that they will not be reimbursed by Medicare?
By the way, [that] contract was just a trial run. CMS has contracted with a number of audit firms to conduct a similar and on-going program review nationwide. So we will be seeing these “20-20 hindsight” reviews of doctor’s decisions for a long time.
Of course, the president’s IMAC proposal would make those powers much more explicit and sweeping.
If the president thinks it’s a good idea to give the federal government more power to ration medical care, he should say so. It’s a defensible position.
But to claim that’s not what he’s proposing, or that the government doesn’t do that already, is a . . . oh, what’s the word . . . ?
Filed under: Cato Publications; General; Health, Welfare & Entitlements
‘No Child Left a Dime’
That’s my favorite placard from the Washington tea party protests on Saturday. No Child Left a Dime underlines perhaps the central concern of the protesters — the ongoing massive fiscal irresponsibility in Washington by both parties.
We’ve got deficits of more more than $1 trillion for years to come. Federal debt will approach World War Two levels within a decade. Even so, the Democrats are trying to ram through a $1 trillion health care expansion, and the head of the Republican National Committee, Michael Steele, is defending against any cuts to Medicare, the program that is the single biggest threat to taxpayers. People are marching not just because Obama and the Democrats are scaring their pants off, but because most Republicans in positions of power are spendthrifts as well.
The chart illustrates that no child will be left a dime because the government will have it all. This is the CBO’s “alternative fiscal scenario,” which essentially means the business-as-usual scenario if Congress doesn’t cut anything in coming years.
Note that the most rapidly growing box, the white box, is the program that Michael Steele doesn’t want to touch. The program is expected to grow by 6.3 percent of GDP by 2050. In today’s money, 6.3 percent of GDP is about $900 billion a year in added spending. So it’s like Steele doesn’t see anything wrong with tomorrow’s young families forking over an additional $900 billion a year in taxes on this one program, or about $7,700 a year for every American household.
It’s worse than that. The biggest box on the chart by 2050 is interest on the government debt, and by far the biggest contributor to the growth in interest is Medicare. So including interest, Michael Steele’s (ridiculous) Medicare position is sort of like supporting a more than $10,000 tax hike on every young family for this one program.
Come on Republicans, you can do better than that. How about starting simply by proposing some of CBO’s modest and commonsense Medicare reforms like raising deductibles?
(By the way, interest costs rise in coming years because of an excess of spending, not a shortage of revenues. Under this CBO scenario, all current tax cuts are extended, and yet federal revenues still rise as a share of GDP over time above the historical norm of recent decades).
Filed under: Health, Welfare & Entitlements; Tax and Budget Policy
Weekend Links
- Jack of all trades and master of none: What happens when the government gets so big that it fails to fulfill its most important role.
- The hard truth about end-of-life care in America.
- If current trends continue, the U.S. government will soon spend a greater portion of GDP on Medicare and Medicaid than Canada now spends on its entire single-payer government-run system. Here’s a way to fix that.
- How about a little honesty from time to time in the tobacco policy debate?
- More drug-related chaos along the Mexican border.
- Go North Young Man! Will Wilkinson becomes “forever Canadian.”
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.
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