The Road To Government Run Healthcare

From Th Heritage Foundation


The Morning Bell


TUESDAY, SEP 1, 2009


The Road To Government-Run Health Care



Illustrating how proponents of Obamacare “lost the month of August,” Politico notes that while Rep. Vic Snyder (D-AR) claimed health care would be transformed “under President Obama’s leadership” in late July, by mid-August he had been humbled, telling a 1,000 person townhall: “I’ve never been a big fan of this public option.” How are Speaker Nancy Pelosi (D-CA) and Majority Whip Jim Clyburn (D-SC) planning on bringing the likes of Rep. Snyder back in line? Again from Politico:
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Leaders say their strategy is to convince members that nothing is set in stone and that they are more than open to negotiations. And they’re engaging in a softer sell, prioritizing health insurance reforms while pitching the public option as something that’s way, way down the road.

The American people have done a tremendous job this August educating their elected leaders on the fact that they have no desire for government-run health care. And they have every right to believe that President Obama’s “public option” will achieve exactly that. Earlier this year, The Lewin Group released a study showing that under the July 15th draft of Obamacare, enrollment in the public option would reach 103.4 million people including about 83.4 million people who would lose their private insurance and be nudged onto the public plan. But also in July, the Congressional Budget Office (CBO) then released their own analysis showing that only 11 million people would enroll in the public plan. How can these numbers be off by a factor of ten? The answer demonstrates just how dangerous the creation of any public plan really is, no matter how small it is initially.

Explaining the gap between the CBO and their own numbers, the Lewin Group’s John Sheils and Randy Haught write: “There are two reasons for the difference in the CBO and Lewin Group estimates for the July 15th draft. The first stems from the fact that the bill does not specify which size companies ultimately would be allowed to enter the exchange and thus the public plan. The bill requires that the exchange be open to individuals and small firms with less than 20 workers by the second year of the program and gives a newly established “Commissioner” the authority to extend eligibility to all employers in subsequent years. … The second area of difference is over premium levels in the public plan.”

Sheils and Haught then detail how by fiddling with eligibility and premium level assumptions (details that under any public plan will be imminently changeable by Congress and the new healthcare “Commissioner”), the CBO and Lewin numbers largely match up. Defending their own assumptions on premium levels, Sheils and Haught then recount Congress’ constant fiddling with Medicare Advantage concluding: “In fact, the Medicare Advantage experience actually demonstrates that private health plans can not compete with the Medicare fee-for-service program, at least not without subsidies or some other type of overpayment rates.” And remember, President Obama wants to cut Medicare Advantage entirely to help pay for the rest of his plan.

The bottom line is that a public plan will grant the federal government unprecedented power to constantly tinker with the healthcare sector in ways that will make one sixth of our entire economy completely dependent on decisions made in Washington, DC. This is not the way free societies operate.

Documenting the rise of central planning in 1944, Friedrich von Hayek wrote in The Road to Serfdom in 1944: “The question was not longer one of making competition work and of supplementing it but of displacing it altogether.” As Hillary Clinton’s Chief Strategist Mark Penn writes in today’s Politico: “The subsidized “public option” was always meant as a transition to single payer, not merely as an aid to competition with private insurers.”