PJ Media

Word to the Wise: Don't Get Sick

Five committees in the House and Senate, a dozen subcommittee chairmen, uncounted individual Democratic legislators running the gamut from loony liberal to squishy moderate, and an army of lawyers, lobbyists, activists, and pundits have all labored to bring forth what they are referring to as “health care reform.”

Predictably, when so many cooks are in the kitchen, what eventually ends up on your plate might be fare fit for a dog, but hardly a meal that is appetizing to other, more discerning species.

Contained in the 1,018 pages of the House health care bill are the seeds of destruction for small business, the most draconian interference in the personal lives of American citizens in history, the near certainty that innovation in the medical field will be severely curtailed, and the self-evident notion that health care will eventually be rationed. That last item might not be too bad. Perhaps the same agency we set up to ration energy can handle health care also.

Other than that, what’s to complain about?

It’s not like there aren’t other means at hand to accomplish most of what these bills propose. If the major purpose of this legislation is to insure the uninsured, there are a half dozen alternatives to what amounts to an eventual government takeover of the entire health care industry. The Republicans actually have a comprehensive alternative of their own that, with a little work, would accomplish almost all of the goals espoused in the Democrats’ legislation. Insurance pools to cover those with pre-existing conditions, generous tax credits for individuals and families to buy insurance, intelligent and market-driven ways to lower costs — all without a “public option” or ruinous new taxes.

But the Republicans are paying the price for not taking their jobs seriously for the decade they were in power by having no one take them seriously now. The GOP alternative was ignored by media and Democrats alike.

What hath Congress wrought? Democrats are dismissing the idea that these bills represent a slippery slope to government-run health care. They are absolutely correct. This is a promenade off of a precipice. Nothing slippery about it. Nor can there be any other outcome eventually than a government takeover of the health care industry.

This will come gradually as the “public plan’s” costs rise higher and higher and the subsidies paid to the beneficiaries also rise. This is what states like Massachusetts and Hawaii have experienced when they implemented statewide health care plans. Since there will be little or no savings the first few years of the plan (if ever), the government will be faced with the prospect of drastically increasing subsidies or dictating treatment choices — in other words, rationing. They will also be forced into the business of dictating how much doctors and hospitals can charge for services in order to get a handle on costs at that end.

Result? A de facto government-run system that will deliver fewer services for more money.

Obama has mentioned several times that “we are out of money.” He should know — he spent it. But what this means is that paying for this gorgon of a plan in the years ahead will depend on the costs not rising faster than has been allowed for. The House plan calls for a 5.4% “surcharge” on people with incomes over a million dollars and smaller tax increases on those making more than $250,000. There is a provision to increase these surcharges in the next few years if needed.

But that accounts for only half the amount necessary to fund this monstrosity. Most of the other half of the cost will come from changes in Medicare. Since states are responsible for some Medicare costs, it stands to reason that state taxes are going to rise to pay for it.

At some point, raising taxes on the wealthy will become untenable and the rest of us will start to shell out. In the end, raising taxes to pay for health insurance will become counterproductive to economic growth and rationing health care will become part of life in America.

There are those already advocating rationing as the only alternative. Peter Singer writes in the New York Times:

Rationing health care means getting value for the billions we are spending by setting limits on which treatments should be paid for from the public purse. If we ration we won’t be writing blank checks to pharmaceutical companies for their patented drugs, nor paying for whatever procedures doctors choose to recommend. When public funds subsidize health care or provide it directly, it is crazy not to try to get value for money. The debate over health care reform in the United States should start from the premise that some form of health care rationing is both inescapable and desirable. Then we can ask, What is the best way to do it?

It is “rational” analysis like this that will eventually give us a government-run health care system.

The Senate bill is not quite complete yet. That’s because the Finance Committee has yet to figure out how to pay for it. In addition to the “soak the rich” provision, senators, as befitting their higher office, are thinking of more creative ways to get the taxpayers to cough up cash. How about a “surcharge” on soft drinks? Or penalizing  pharmaceutical companies for coming up with new drugs by socking them with another kind of tax?

Both the House and Senate versions come with orders from on high: get insurance or get fined. The individual mandate can penalize those who choose not to insure themselves up to 2.5% of their gross income or they must buy insurance, whichever is less expensive. (This will presumably be overseen by those gentle and fair souls at the IRS.)

It’s even worse for small businesses. Severely limited from participation in the public plan the first few years, small businesses with payroll over $250,000 must buy insurance for their employees anyway. If they don’t, they are fined 8% of their payroll. An NFIB study showed that about a million businesses with less than nine employees will be affected and half of them do not currently offer insurance to their employees.

This will not only drive thousands out of business but will put a huge crimp in the creation of small businesses. Since it is the small, independent businessmen who are first to hire coming out of a recession, the chances are pretty good that any recovery we experience will be slow, with unemployment remaining stubbornly high.

Then there’s the problem for around eight million taxpayers who fall into a gap between being eligible for subsidies (your income cannot exceed 400% of the official poverty line) and having to pay out of their own pocket for mandated insurance. Keith Hennessey explains:

But if you’re a single person with income of $44,000 or higher, then you’re above 400% of the poverty line. You would not be subsidized, but would face the punitive tax if you didn’t get health insurance. This bill leaves an important gap between the subsidies and the cost of health insurance. CBO says that for about eight million people, that gap is too big to close, and they would get stuck paying higher taxes and still without health insurance.

In the Wall Street Journal, Dr. Thomas Szasz writes:

Our national conversation about curbing the cost of health care is crippled by the vocabulary in which we conduct it. We must stop talking about “health care” as if it were some kind of collective public service, like fire protection, provided equally to everyone who needs it. No government can provide the same high quality body repair services to everyone. Not all doctors are equally good physicians, and not all sick persons are equally good patients.

If we persevere in our quixotic quest for a fetishized medical equality we will sacrifice personal freedom as its price. We will become the voluntary slaves of a “compassionate” government that will provide the same low quality health care to everyone.

Something to look forward to, what?

So what do we get after spending at least a trillion dollars over 10 years? The CBO says we would still have 17 million legal Americans not insured. We would also almost certainly have some form of rationing. And the chances are good that we would have a system performing much worse for people who are insured today.

Some deal, huh?