Obamas Five Flaws

From The Heritage Foundation

September 2, 2009 | By Amanda Reinecker

Obamacare’s five flaws
There is little disagreement among liberals and conservatives that America's current health care system needs serious reform. But the Left's plan is seriously flawed.

Heritage Foundation expert Nina Owcharenko dissects "five major faults with the health care bills" being pushed in the House and Senate.

The public "option." Both proposals would create a government-run insurance plan which proponents claim would foster honest competition among private insurers. But how can there be fair competition when one of the players -- Washington -- is both writing the rules and playing the game? What's more, this scheme could lead millions of Americans to lose their private health insurance.

Centralized regulation. Both the House and Senate bills would result in sweeping and complex federal regulation of health insurance. This would take oversight away from states and concentrate it in Washington -- and this oversight is best left at the state level.

Greater dependency on government. Both bills would expand existing government health care programs and introduce massive new taxpayer-funded subsidies to buy health insurance. This would leave millions of Americans dependent on government for their health care.

Employer mandate. The plans would force employers to provide coverage for all employees or face a massive tax. These "play-or-pay" mandates will raise prices, stifle economic growth and particularly hurt low-wage earners.

Individual mandate. Both bills require that all Americans purchase health insurance. Those without coverage or whose plans don't meet the new federal standards would face tax penalties. Special interests are sure to "lobby intensively to expand the legally mandated health benefits, medical treatments and procedures, and drugs that all Americans must buy under penalty of law."

Taken together or individually, these flaws would inflict serious damage on an industry that represents one-sixth of our nation's economy.

Instead, Owcharenko suggests the government refocus its efforts on incrementally introducing real, cost-effective reform. Such a reform would grant more autonomy to individual states; extend tax relief to everyone who purchases private health insurance, regardless of employment; and rein in runaway spending on programs like Medicare and Medicaid.

"Policymakers need to proceed slowly and deliberately," advises Owcharenko, "making sure that the initial steps they take are not disruptive of what Americans have and want to keep, actually work, and do not result in costly and damaging and unintended consequences." So far, they're on the wrong track.

School choice is a safe choice
The Washington, D.C. public school system is among the most dangerous in the nation, according to a recent Heritage Foundation study.

"Many students living in the District of Columbia attend schools where they are too often exposed to crime and violence," explains the report, coauthored by Heritage's David Muhlhausen and Dan Lips with Don Soifer of the Lexington Institute.

In 2009, 11.3 percent of D.C. high school students reported being "threatened or injured" with a weapon while on school property during the previous year--a rate well above the national average.

One way out is to allow parents to choose safer schools for their children. "All children should have the opportunity to attend school in a safe learning environment," the authors argue. The editors of the Washington Post apparently agree. "No wonder many parents cite school safety when explaining why they want choice in where their child goes to school," they wrote in an editorial citing this Heritage study.

That is why school-choice initiatives like the D.C. Opportunity Scholarship program are so valuable. This program allows 1,700 low-income students to attend private schools in the District. Because of its impact on both academic achievement and school safety, Congress should look into expanding the program. But earlier this summer, Congress put the program on the brink by passing an appropriations bill that would prevent any new students from receiving the scholarships.

The Heritage Foundation has long promoted school choice programs across the country. Our experts provide in-depth analyses of how they give parents the ability to choose safe and effective schools for their children.

» Learn more about school choice programs in your state

> Other Heritage work of note
Proponents of Obamacare repeatedly claim that there are 46 million uninsured individuals in the United States, but few can explain the origin of this number. Heritage health policy analyst Dennis Smith looks at the facts and finds that this number inflated. "The number of Americans who are poor, sick, and uninsured for a lengthy period of time is a relatively small number, about 4 million individuals," he concludes, adding that there the 46 million figure also includes about 12 million illegal aliens.
The $787 billion stimulus isn't working the economic miracle the Left promised. "Unemployment remains high, consumer confidence and spending remains low, and the politicians in Washington are borrowing and printing money at record levels," writes Heritage Senate Relations expert Brian Darling. But instead of adopting truly stimulating economic policies, Washington remains mired in politics as usual.
Heritage national security expert James Carafano warns: "America is returning to the 19th century, a world where it will be incapable of producing the instruments needed to defend itself." Both the House and Senate have passed a defense authorization bill that drastically cuts funding for programs and equipment essential to our national security.
President Obama and Russian President Dmitri Medvedev may soon begin negotiating a replacement for the Strategic Arms Reduction Treaty. But Heritage national security expert Peter Brookes recalls that past arms deals have often involved Russian shirking. Brookes advises the President to hold his Russian counterpart accountable for his country's non-compliance. "If we don't, the Russians will have little if any incentive to correctly implement any new treaty -- and every reason to find clever ways to cheat, as it looks like they're doing now, further jeopardizing our national security."
> In other news
President Obama has decided to ease up on his push to include a public "option" in the health care reform plan. While the Left insists on its inclusion, the President, whose approval ratings have plummeted lately, seems open to its removal.
The AFL-CIO, a powerful union ally of the liberal Congressional leadership, is lobbying for a tax on every stock transaction. Penalizing investment hardly seems like a good way to encourage economic recovery.
Debate on the controversial cap-and-tax climate change legislation has been postponed to the end of September to allow Senators to focus on health care.
Under the government's cash-for-clunkers program, dealers were to offer car buyers the subsidy out-of-pocket and be reimbursed by Washington within ten day. But even though the program has ended, many dealers have yet to receive their promised reimbursement.
Vermont began to recognize same-sex marriages on Tuesday. To celebrate, ice cream chain Ben and Jerry's announced it would temporarily rename its "Chubby Hubby" flavor to "Hubby Hubby."
Canada's Liberals have announced their intention to undermine the Conservative government of Prime Minister Stephen Harper and force an election. Harper's party does not hold a majority of seats in the parliament.