HEALTHCARE

After reviewing President Obama’s remarks on health care in his address to the joint session of Congress, here are my thoughts.

Obama: "There is “agreement in this chamber on 80% of what needs to be done.”

Eighty percent? There may an 80% agreement that certain things need to be fixed, but I think the agreement on how to fix them is substantially less.

DETAILS

Obama: “Nothing in this plan will require you or your employer to change the coverage or the doctor you have.”

Unless the plan you have disappears, or the doctor leaves. That’s already true under the current system, and there’s nothing in ObamaCare that leads me to believe that it won’t get worse, with the “public option” as the plan of next resort.

Obama: “[It will be against the law for insurance companies to deny you coverage because of a preexisting condition ... or ... drop your coverage when you get sick or water it down when you need it most.”

Obama: “[Insurance companies] will no longer be able to place some arbitrary cap on the amount of coverage you can receive ....”

Obama: “We will place a limit on how much you can be charged for out-of-pocket expenses ....”

And every one of these “against-the-laws” will cost additional money. How can they not increase the basic cost?

Obama: “[Insurance companies] will be required to cover ... routine checkups and preventive care ....”

First, it’s already been shown that preventive care does not save money in either the short or long term.

Second, if it covers routine/preventive care, it’s not insurance; it’s prepaid medical care. I have no problem if some folks want to buy prepaid medical care, but what of those of us who want insurance for catastrophic events (like hospitalization)?

Obama: "We’ll creat[e] a new insurance exchange - a marketplace where individuals and small companies will be able to shop for health insurance at competitive prices.”

This is actually a good idea, and one I could agree with if Obama would limit the government role to writing the law allowing private cooperatives to be formed.

For example, I’m a member of the Northern Virginia Electric Cooperative, which supplies electricity to my house. I own it (well, along with thousands of others) and consequently have immediate motive to ensure that it’s well run.

I’m also a member of a number of professional organizations and credit unions who could serve as the “sponsor” of an insurance exchange. In each case, I have reason, responsibility, and means to ensure it would be run to my satisfaction.

Obama: “[F]or those ... who still can’t afford ... [insurance] ... we’ll provide tax credits ....”

Which will have to be paid for by taxes somewhere else. Who? I'll bet that since I'm the one who can (barely) afford insurance, I'll get the "privilege" of paying more for the same service. Give me a reason why I should.

Obama: "[I]ndividuals will be required to carry basic health insurance.”

The auto insurance analogy Obama used is clever, but wrong. States require auto liability insurance - for damage to others. Personal property, collision, and comprehensive are not required (except by the lienholder).

More importantly, how does the administration propose to verify -and enforce - the requirement that every individual has insurance? Never mind the probable invasion of personal privacy; think about this: How many uninsured vehicles are on the road, despite the fact that all cars must be registered with the state to travel on public highways?

LIES AND MISREPRESENTATIONS

In choosing to discuss the "lies and misrepresentations" promoted about Obamacare, the President asserted that with his health care reform, there will be:

“No death panels.”

Of course not. The “death panel” is a metaphor - vivid, it's true - for the certain knowledge that Obama’s health care reform will be resource limited and inevitably rationed.

Our current system already rations health care - by price. So knowing that rationing already exists, the "death panel" question is simply one of "Who gets rationed?"

And knowing what we already know about the government’s efficiency at delivering services, is there any reason to believe that the rationing won’t get worse?

“No insuring illegal immigrants.”

Technically, the statement is true, I suppose, but without an enforcement mechanism - which isn't in the bill before Congress - it’s meaningless.

“No federal dollars for abortions”

So does that mean that the “public option” will cover less than private plans? I suspect that there's a discrimination question yet to be addressed in the "no federal dollars" assertion.

“No ‘government takeover -’ public plan is an option only for those who don’t have [private] insurance.”

Obama [intentionally?] misses the point. The fear is that the “public option” cost will be low enough to encourage employers to quit offering insurance (and insurance companies to quit offering individual plans) and thereby force Americans into a public option plan backed by the federal government (where the risk is lower).

“No taxpayer subsidy for the ‘public insurance’ option.”

Here’s the question: if there’s no taxpayer subsidy, isn’t it almost by definition just another private insurance option? For the answer, look to Fannie Mae and Freddie Mac. Both are obstensibly private corporations, backed by "full faith and credit" of the federal government. Now ask yourself “What was the proximate cause of the housing bust?” Answer: government meddling.

PAYING FOR OBAMACARE

Obama: “I will not sign [a plan] if it adds one dime to the deficit, now or in the future, period.”

If true, then Obama can’t sign the bill he outlined in his speech, as it’s already been scored as not deficit-neutral by the Congressional Budget Office.

Obama: “[M]ost of this plan can be paid for by finding savings within the existing health care system, a system that is currently full of waste and abuse.”

Unfortunately, we’re all too aware that the federal government is bloated, inefficient, wasteful, and pork-laden; so there’s little doubt that savings are potentially there. How much? And can Obama produce them? Produce the savings first; then fund the reform.

Obama: “[M]uch of the rest would be paid for with revenues from the very same drug and insurance companies that stand to benefit from tens of millions of new customers. And this reform will charge insurance companies a fee for their most expensive policies, which will encourage them to provide greater value for the money .”

Okaaaaay. I see two realistic possibilities. One, prices for the ‘gold-plated’ policies go up, or two, the gold-plating turns bronze. The latter seems more likely (and is probably the administration’s preferred option).

To summarize my thoughts, essentially there was nothing new in President Obama's address. Despite his assertion to the contrary ("My door is always open ..."), there was no hint of bipartisanship in his address. His use of phrases such as “scare tactics,” “score short-term political points”, and “think it is better politics to kill this plan” were aimed directly at Republicans and intended to exclude them.

The President doesn’t, can't, or won’t understand that there can be principled opposition to his plan. John Hinderaker had this to say: “I’m not sure whether Obama and his handlers understand how this sort of talk grates on those of us who are not liberal Democrats (a large majority of the country). Debating public policy issues is not ‘bickering.’ Disagreeing with a proposal to radically change one of the largest sectors of our economy is not a ‘game.’ This kind of gratuitous insult – something we never heard from President Bush, for example – is one of the reasons why many consider Obama to be mean-spirited.”

The President’s “cost analysis” simply doesn’t hold water. The CBO has already scored the health care reform as budget-busting, and no amount of smooth-talking is going to change that. As I noted above, if there is so much waste and inefficiency in Medicare/Medicaid, why not wring it out and only then use the savings to fund reform? Arnold Kling had the same thought but was more sarcastic: “Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan ... And if we don’t pass this plan, does he intend to keep the waste and inefficiency, out of spite?”

The answer is “of course he will” simply because no administration or Congress has ever been able to reduce it.

And that’s why Obama's "payment plan" doesn't hold water.