The Debate in Healthcare Reform

President Ronald Reagan once said “The most terrifying words in the English language are: I'm from the government and I'm here to help.” Those words come to mind when I think about the proposed healthcare reform bill, HR 3200.

Last night, President Obama once again delivered a beautifully crafted speech but much of what he said, to be generous, I believe is improbable. I’ve detailed my concerns and I’d be happy if someone could allay my fears.

Nationalization of Healthcare
Last night, President Obama proclaimed that the public option would simply be one option among many in a healthcare exchange; that only 5% of the public was expected to enroll. Furthermore, the public option would be subject to the same rules as all Qualified Health Benefits Plans (QHBP) and would have to be self-financed, following an initial startup fund of $2 billion. SEC. 222. PREMIUMS AND FINANCING (1B) requires premiums be set “at a level sufficient to fully finance the costs of” benefits plans and administrative overhead.

Weren’t social security, Freddie Mac, Fannie Mae, Amtrak, and the post office supposed to be self-sufficient? Are politicians really going to allow the government to charge market rates for healthcare? Is there any government sponsored organization that serves a large portion of the public and doesn’t receive subsidies, direct or indirect (i.e. loan guarantees)?

Will it be a true level playing field? The government can dictate reimbursement rates that the private market cannot. The public option has no enforcement mechanism to meet private industry’s accounting standards and obligations. The public option can afford to run at a loss. A private company cannot.

President Obama has admitted he is a “proponent of single-payer universal healthcare coverage,” i.e. nationalization. Won’t he and his congressional allies be sorely tempted to advance the public option by gaming the system? Personally, I would not invest in a health insurance company competing directly against the government.

National Debt
According to the non-partisan Congressional Budget Office, the costs of the proposed legislation will escalate to $200 billion per year by 2019 or about $1,300 per worker plus interest. That’s on top of a projected $9 trillion deficit, or about $60,000 per worker. And that’s assuming that illegal aliens won’t be covered, that the public option plan won’t operate at a debt, and that cutting a consumer’s cost for healthcare won’t increase his demand. How are we going to pay for everything?

These projections are also assuming that we only insure two-thirds of the uninsured. Insuring the last third, another 17 million people, could easily add another $100 billion a year to the deficit.

Quality of Care
President Obama insists that the proposal won’t ration or diminish the level of care we receive. Yet, he projects that by 2019, we’ll save $88 billion a year in Medicare and Medicaid through future “efficiencies”. Given the government’s track record, what if those savings don’t materialize? What if costs are above projections? How are we going to restrain costs without reducing care? Can we take money away from doctors, hospitals, and pharmaceutical companies without diminishing care?

Keeping My Insurance
President Obama claims that I can keep my current plan. I get my insurance through my spouse’s employer. Under HR 3200, that plan would have to be a Qualified Health Benefits Plan (QHBP) whose standards would be set by a Health Choices Commissioner.

My fear is that, in time, those standards would become too burdensome for my wife’s employer and it would stop providing coverage. Even if our coverage plan did qualify, her employer would have a powerful financial incentive to drop us.

Under the current proposal, my wife’s employer could either cover her healthcare or pay 8% of payroll. (SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COVERAGE) 8% of payroll is far less than what her company is currently paying and it would be hard to justify to Wall St. paying millions for healthcare if the employees had an affordable alternative.

Immigration
President Obama claimed the bill would not cover illegal aliens. He was referring to SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED ALIENS, which states “Nothing in this subtitle shall allow Federal payments for affordability credits on behalf of individuals who are not lawfully present in the United States.”

The section is specifically referencing Subtitle C—Individual Affordability Credits. That means illegal aliens would NOT be able to get subsidies, but they WOULD be able to purchase the public option. Since pre-conditions would not be a barrier, it would be a mighty incentive for the ill to seek treatment in the United States.

Notice the clause references “lawfully present” rather than the customary term “U.S. citizens or permanent residents”. Those who are here lawfully, such as students or people on work visas, would be entitled to subsidized care. Unfortunately, the bill does not provide any enforcement mechanism to distinguish between those who are here legally and those who are not. The IRS provides Taxpayer Identification Numbers to aliens both legal and illegal. Since the government will need to use taxpayer ID numbers for aliens “lawfully present”, I’m afraid the government won’t distinguish between those who are present lawfully and unlawfully.

Another concern is that President Obama supports “a system that allows undocumented immigrants who are in good standing to pay a fine, learn English, and go to the back of the line for the opportunity to become citizens.” In other words, he supports changing an illegal alien’s status to “lawfully present”, which would trigger the subsidies.

Another possibility is the courts could simply nullify the clause. If the government can find one federal judge to rule that healthcare is a “right”, then the government could choose to abide by the ruling, not appeal, and provide subsidies to illegal aliens. In Pyler V. Doe, the Supreme Court ruled that the Fourteenth Amendment requires schools to provide the same services to illegal aliens. Surely, there’s one federal judge who would use that as a basis to expand healthcare coverage.

Lastly, nobody is suggesting that illegal aliens would be barred from purchasing the public option. If the public option operates at a deficit (which I believe it will), then that’s a de facto subsidy.

If the illegal aliens presently in the country are covered, now or in the future, cost projections would explode.

Privacy
During the presidential campaign, government workers illegally released damaging information on Joe the Plumber to discredit a private citizen who had unwittingly entered the political arena. SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EXCHANGE.- (d) ACCESS TO DATA – allows the Health Choices Commissioner to access your tax records if you seek “affordable credits”. Why expand access to tax records rather than have the treasury department make the determination?

Abortion
The president declared that the program would not fund abortions. Actually, the bill does not proscribe funding abortions but does require the public option to conform with “individual rights and remedies under State laws”. (SEC. 151. RELATION TO OTHER REQUIREMENTS. (b) COVERAGE OFFERED THROUGH EXCHANGE) So, yes, there will likely be government-funded abortions. Personally, I don’t consider abortion equal to murder but I’m sure that those who do would not want their taxes to cover the procedure.

Other Options
It’s also troubling that a host of simpler, less costly, and less intrusive options are not being considered. Selling insurance across state lines, tort reform, catastrophic-only plans, expanding health savings accounts, and healthcare tax credits for the needy are off the table. Why?

Tennessee tried universal coverage and failed. Massachusetts tried universal coverage and failed. Yet, President Obama says this is change we can believe in. In ancient times, the Romans would test their bridges by forcing the master builders to stand under them while large loads crossed overhead. When our government reaches that level of accountability, I’ll believe. Till then, I’ll heed President Reagan’s warning. I support reforming healthcare but I do not support this bill. >>> Read more!