As the Senate debates President Barack Obama’s health-care bill, it’s important we not get distracted by the sideshows Senate Majority Leader Harry Reid has planned for us.
While hot button issues like the public option or funding for abortions may attract the most debate, these are issues to which Congresscan return at leisure later on—once government is firmly in charge of everything. Reid wants to keep moderate Democrats on board for the goal he knows is really important: Giving the government a dominant role in health care. Everything else is just details.
Three Major Elements
Three provisions constitute the vicious heart of the Democrats’ health-care overhaul.
The first is “guaranteed issue” and “community rating.” This is the requirement that insurance companies have to offer coverage to people who are already sick, and that they be limited in their ability to charge higher rates for customer who pose a higher risk. The extra expense to the insurance companies of covering people with preexisting conditions will get passed on to existing customers in the form of higher premiums.
But why spend years paying these inflated premiums for insurance you’re not using, when you can get exactly the same benefits by waiting until you actually fall ill? The obvious result is that millions of people, especially healthy young people, will quickly realize there is no reason to buy health insurance until they get sick.
Rather than increasing the number of insured by making health insurance more affordable, all forms of this plan make health insurance more expensive and increases the incentive to drop your insurance until you need someone to pay for your medical bills. It is an attempt to turn health insurance into what the overhaul proponents really want: Another welfare program in which everyone is entitled to free benefits, mandated by the government. This would wreck private health insurance, making the whole industry financially unsustainable.
A Tax on Existing
Following the usual pattern of government intervention, the health care legislation offers another intrusion as the solution for the problem created by the first. The “individual mandate” requires everyone to buy health insurance and subjects us to a tax if we fail to do so. This is an especially onerous new tax, the first tax not tied to any kind of income or activity. It’s not a tax on stock-market profits or on buying cigarettes. It’s just a tax on existing.
Fearing a public backlash, Congress didn’t have the guts to make this new tax very large—just $750 at the start. Yet actual insurance can easily cost more than $3,000 per year, and this legislation goes out of its way to drive up those rates by mandating more lavish coverage.
We end up getting the worst of both worlds. This provision won’t actually drive anyone to buy health insurance and prop up the risk pools for the insured. All it will accomplish is to create a brand-new form of tax.
The biggest power-grab of all is the government takeover of the entire market for health insurance. Both the House and Senate bill require all new policies to be sold on a government-controlled exchange run by a commissioner empowered to dictate what kinds of insurance policies can be offered, what they must cover, and what they can charge.
Right now your best option for reducing the cost of your health insurance is to buy a policy with a high deductible, which leaves you to pay for routine checkups and minor injuries (preferably from savings held in a tax-free Health Savings Account) but covers your needs in catastrophic circumstances—a bad car accident, say, or expensive treatment for cancer. But the health-insurance exchange is intended to eliminate precisely this kind of low-cost catastrophic coverage. Its purpose is to force health-insurance companies to offer comprehensive coverage that pays for all of your routine bills—which in turn comes at a higher price.
So under the guise of making health insurance more affordable, the Democrats’ plan will restrict your menu of choices to include only the most expensive options. It restricts your choice of which insurance to buy and pushes us all into more expensive plans. At the same time it destroys the economic incentive to purchase insurance in the first place and replaces insurance with a free-floating tax on one’s very existence.
When you understand what this bill does, you can see why its proponents would be happy to compromise and drop the public option—for now. This bill so comprehensively wrecks private health insurance that pretty soon a “public option” will seem like the only alternative, and they will already have put into place one of the new taxes needed to pay for it.
If the plan’s proponents’ goal is to impose socialized medicine in America, this bill does it in the most callous and destructive way possible. It smashes private health care, then leaves us stranded in the rubble, at which point we will be expected to come crawling back to the very people who caused the disaster and ask them to save us.
Robert Tracinski ([email protected]) is editor of the Intellectual Activist, where this column first appeared. Reprinted with permission.